Blockchain Limitations

On this page, we will learn current issues & obstacles to overcome for web3.

As a general note, it is important to listen to people who criticize web3. As you may have heard, “wE aRe sO eArLy.” This is cool to say because it makes you feel a little twinge of what Zuckerberg felt like in his dorm when he was building Facebook.

But, this also means that there are a lot of problems to overcome with web3. People who only praise web3 may shift your perspective away from reality and into a uber-optimistic perspective.

It kind-of sucks to hear about web3’s downfalls, especially if you are passionate about it. But, if you want web3 to improve, you have to know where it needs to improved.

And, if you are investing, it is even more important to understand its downsides. Ignorance is bliss....until you get burned. Be educated, not ignorant.

So, we went searching for the biggest problems in web3. Here’s what we found:

1. User Experience

In general, web3 UX & onboarding can be slow, clunky, & complicated. This makes it especially difficult for newcomers to get accustomed to web3.

Granted, these are one of the downfalls of an early industry. It needs designers, effort, & time to mature. If you are a designer, there are web3 jobs for you!

Some even argue that web3’s properties will propel it to be a better UX than web2. Nonetheless, if web3 is going to take over the world, it needs to be simple to use.

2. Education

Non-Technical Education

It’s really hard to learn about web3. Most people learn by jumping from blog to YouTube video to whitepaper & so on. Educating yourself requires a lot of (inefficient) independent research.

In general, there is a lot of fluff information & not many reliable places for newcomers to start learning.

At Illini Blockchain, we are trying to become an entry point for newcomers. But, it will require a collective effort.

If you can explain complex crypto concepts to normal people, there is demand for you in web3!

Technical Education

It’s arguably even harder to learn how to program in web3.

Backend programming for a dApp is entirely different from traditional web applications. So, newcomers need educational resources to learn. Sadly, technical documentation is LACKING a lot, especially for non-Ethereum based dApps.

Because web3 is relatively new & growing fast, innovation often outpaces documentation.

Some orgs (ex: here & here) are working on solving this issue, but there is a lot of work to be done. If you are technical & can explain things, many foundations & protocols will pay you to create documentation for them!

Check out these articles to learn more about lack of technical education:

3. Technical Architecture

Scalability & Sustainability

If blockchains cannot scale to meet global demand, they will not take over the world. Plain & simple.

Right now, it is common to pay over $100 on Ethereum gas fees for simple transactions. Clearly, there is a lot of work to do.

All blockchain platforms are trying to solve this issue. But right now, the scalability is not sustainable.


As with everything, there are tradeoffs. In web3, two common tradeoffs are:

  1. Speed of Innovation vs. Decentralization
  2. Scalability vs. Decentralization

As a result, many parts of web3 are not as decentralized as people think.

Moxie Marlinspike does a great job outlining the lack of decentralization in web3:

Others, like Packy McCormick, argue that the somewhat-centralized nature of individual platforms is okay because users will have choice. To be specifc, he says:

“it’s not about whether any particular platform is centralized, or who owns how much of what. It’s about the fact that the data is open, that builders and users have choice, and that they’ll choose the platforms that extract less and give them more ownership.”

There’s no perfect blockchain; it’s all about making the right trade-offs to serve the target audience and use cases. The future is multi-chain.

4. Misaligned Incentives

VC Money

Jack Dorsey, co-founder of Twitter & Square, ignited a Twitter debate about the true incentives of VC-backed web3 projects.

He does have a good point. Early movers & investors tend to profit the most from new projects.

Check out this article for an in-depth analysis of VC money’s influence on web3:

5. Credibility

With recent bankruptcies from centralized players including FTX and 3AC, and then the debugged chaos of Terra and Luna, it is very hard to know who to trust nowadays. Adoption relies on trust, so in order for the industry to become mainstream it needs to increase its credibility.

On the bright side, the recent crashes do reveal the weaknesses in the industry - something that will be fixed. And, at the end of the day, web3’s ability to stay alive through this all does say something about its resiliency.

6. More Critiques!

We didn’t outline every web3 issue.

These 3 resources outline many of web3’s issues better than we did. So, give ‘em a read:


Web3 is underdeveloped. It isn’t all good or all bad. We happen to believe that it’s net good. Others don’t.

Regardless, it is growing. Thoughtful and honest critiques are important to grow in the right direction. At Illini Blockchain, we learn from people that we trust who will openly criticize the weak-points of web3 (for the sake of its long-term success).

In addition, all of these issues are opportunities for YOU to create value & make money.

Many of these issues are a result of web3 being underdeveloped. This means that there will be a lot of growing pains for the next few years. New debates will be waged. Many projects will fail. Some will win. As more passionate smart people enter the space, many these problems will be solved.

The people who survive the hard times (which will come) & solve the difficult problems will reap the most benefits. However, we believe any internet user will benefit - it is simply a matter of time.

With that being said, let’s brighten the mood and learn about how web3 will impact everyday people!

Blockchain’s Potential

Web3’s Current & Future Impact
Explain It Yourself