This year’s hottest new tech terms are definitely “web3” and “metaverse.” The former refers to a decentralized web, based on the blockchain, while the latter is a combination of the internet and augmented and virtual reality. It is possible that we will see a merging of the concepts at some point. That is, if the concepts ever turn into anything.

Suddenly, out of nowhere in 2021, we began using these terms like they were a given and we were all privy to the change. Like a giant game of social telephone, the blockchain became “web3” and AR and VR morphed into “the metaverse” — and we all went along for the ride.

Yet the blockchain idea has existed for years as a concept, long before bitcoin decided to use it as a ledger for its digital currency idea in 2008.

I began covering the notion of blockchain in the enterprise in 2017 when a colleague pointed out it could be the next big thing, a way to establish trust through an irrefutable record. It was interesting at first, but was often referred to as a solution looking for a problem, and I eventually lost interest.

Here’s what I wrote in a 2018 article about the blockchain in the enterprise:

The blockchain is in the middle of a major hype cycle at the moment, and that makes it hard for many people to take it seriously, but if you look at the core digital ledger technology, there is tremendous potential to change the way we think about trust in business. Yet these are still extremely early days and there are a number of missing pieces that need to be in place for the blockchain to really take off in the enterprise.

At the time, I wrote about a number of promising startups. I talked to people in charge of blockchain at larger companies like IBM and SAP as they dabbled in the idea of bringing blockchain-based solutions for the enterprise. I was actually pretty pumped about it, too, until I realized it was more hype than reality and moved on. Three years later, it’s back, and once again, it’s the next big thing — and it’s got a new name to go with it.

Stephen Diehl, an engineer and blogger from the U.K., sees the web3 moniker as pure repackaging of the same technology with the same issues. “At its core, web3 is a vapid marketing campaign that attempts to reframe the public’s negative associations of crypto assets into a false narrative about disruption of legacy tech company hegemony,” Diehl wrote in a December 4 blog post that pulled no punches.

What he means is that web3 advocates say that decentralization could reduce the power of the biggest internet companies — Amazon, Google, Microsoft and Facebook — and give it back to the users. But will it?

Kevin Werbach, a Wharton professor and author of “The Blockchain and the New Architecture of Trust,” said that the technology might not be as far along as the hype, and the current popularity of digital assets doesn’t yet equate to a threat to Big Tech.

“Web3 is, to some extent, a meme or marketing brand around a variety of blockchain and cryptocurrency activity, which was already happening. Like the enterprise blockchain wave of a few years ago, web3 is being hyped as much farther along in adoption than it truly is. Lots of people are trading crypto and buying NFTs, but that doesn’t necessarily mean they are adopting distributed alternatives to major tech platforms,” he said.

But Hilary Carter, VP of research at the Linux Foundation who spent three years at The Blockchain Research Institute in Toronto, sees a promising set of technologies that could be ready to scale to take on web3 hype.

“Web3 simply could not even exist without the innovation that is blockchain. The road has not been easy, as the technology has been too often dismissed for some early failures. But those failures drove innovation to address issues like scale,” Carter told me.

She said that the problems around scale and sustainability that I saw in my blockchain coverage several years ago have been solved in the ensuing years. “I think today, with those issues having been addressed, we’re seeing the maturity of the blockchain ecosystem, so much so that nation-states are building ‘central bank digital currency,’ which is probably the use case that will demand the most throughput,” she said.

Certainly, financial institutions are embracing the technology. In its annual blockchain survey, Deloitte reported that nearly 80% of the respondents believed that digital assets would be important or somewhat important to their industries within the next two years. There is also a persistent belief that the speeding of digital transformation amid the pandemic is driving a corresponding shift to more widespread acceptance of digital currencies.

While the idea of digital currency in an increasingly digital world certainly makes sense, it’s a bigger leap to say that the blockchain can support a broad set of use cases, including replacing current internet infrastructure, as supporters suggest.

Diehl certainly doesn’t believe so. “On a compute basis, blockchain networks don’t scale except by becoming the very same plutocratic and centralized systems they allegedly were designed to replace,” he wrote.

But Carter sees room for both digital currency and other use cases. “Sure. I do see both digital currency and blockchain implementations advancing significantly,” she said.

Werbach adds that there are some promising examples, but there is reason to be skeptical about web3 as an overall concept.

“New systems built from scratch, such as in DeFi (decentralized finance), don’t have the problem of legacy firms, but they face the challenge of scaling and mass adoption. Many so-called ‘web3’ solutions are not as decentralized as they seem, while others have yet to show they are scalable, secure and accessible enough for the mass market. That may change, but it’s not a given that all these limitations will be overcome,” he said.

And there’s the rub. Whether web3 is a marketing slogan or a true technological trend, there is certainly a lot of money and tech behind it. Yet there are clearly still substantial obstacles and challenges ahead, and only time will tell if web3 can overcome them and live up to the latest hype cycle.