I spent several months in 2021 actually building with Web3 technologies: deploying smart contracts on Ethereum testnets, connecting frontends to wallets, integrating with DeFi protocols, building an NFT minting contract. This is not a view from the sidelines.
The technical foundation is genuinely interesting. Ethereum's ability to run code on a distributed virtual machine, with results that are verifiable by anyone and cannot be tampered with by any single party, is a real and novel capability. Smart contracts that execute automatically when conditions are met, without needing to trust a counterparty, solve real coordination problems.
The reality of building with this technology in 2021 was more complicated.
Gas fees were the dominant practical limitation. Every operation on the Ethereum mainnet costs gas, and in 2021 that gas was often expensive. Interacting with a smart contract could cost $50 to $200 in fees. This made many use cases economically unviable. The technology could do interesting things but not cheaply enough for real applications.
The developer experience was years behind other ecosystems. Debugging smart contracts was primitive compared to debugging normal code. Testing tooling was improving but still immature. The toolchain for Solidity development was complex to set up. Deploying to production required careful key management that was genuinely difficult to get right.
The security requirements were unforgiving. A bug in a smart contract that controls money can be exploited immediately and irreversibly. The level of security review required for production contracts was beyond what most teams were prepared for. The graveyard of hacked protocols was large and instructive.
What I concluded after building things: the technology works but the use cases that genuinely require a trustless, permissionless, decentralised system are narrower than the proponents suggested. For many applications that were presented as requiring blockchain, a database with good access controls and auditing would have been faster, cheaper, more reliable, and easier to build.
The NFT market of 2021 was driven by speculation and social signalling rather than utility. The DeFi protocols were interesting financial engineering experiments that mostly served existing crypto holders rather than expanding access to finance as claimed. The genuine use cases, cross-border payments, digital ownership for digital goods, coordination mechanisms for communities, were real but smaller than the hype implied.