Open platforms, where anyone can build anything without asking a central authority (with their own financial incentives) for permission, allow for much more innovation. As an easy example, take a look at the App Store and Apple's 30% tax, banning apps which are too "similar" to others, and compare it to the web, where anyone can try most any new idea and potentially disrupt incumbents. Should be noted that before pmarca was a VC, he was an entrepreneur at Netscape, so he knows the benefits here and has lived through opening and closing of the web.

web3, to steelman it, has the potential to get us back to that permisionless world, and in fact go even further, by allowing data to travel with users. At 10K feet I like to think of web3 as "what if instead of one central Facebook with everyone's data, there was a global shared DB of everyone's social content, people logged in with the keys to their specific rows of the DB" In theory, this could bring about a golden new era of social apps - instead of counting on FB to provide the right API endpoints that you needed for your app, and then not banning or copying you, you could build true first-class clients to people's existing social data, with the exact same DB access that the original platform builders had. This would allow for all sorts of new social apps that users would love but aren't themselves viral or funded enough to re-create the whole social graph from scratch. Incidentally, it would also be very disruptive to the FANG giants and put much more control directly in users' hands.

I think it's important to take this upside case seriously, even though I am actually a big web3 skeptic. I think, in particular:

a) the scalability concerns are inherent to the tech (and PoS etc have their own issues)

b) introducing so much financial speculation on top of the space is discouraging people from doing the hard work of building real useful apps when you have these liquid tokens and can cash out just for hyping up a project, before you have product-market fit.

c) a global shared DB means the data model will advance and iterate at the speed of eg, the HTML standard, not at the speed of a startup; this means ambitious apps will just build their proprietary side data models to give users the features that aren't approved by the core spec, and if they capture enough of the mindshare, those features then become expected by all users, and apps that don't have them become second class - the third party has now taken an open data model and turned it into something proprietary. (this is basically the "embrace, extend, extinguish" strategy we saw Microsoft use against open standards in Web 1.0) You are already seeing signs of this with eg OpenSea adding other metadata on top of NFTs

d) most fundamentally - I think we're kidding ourselves how much the average user likes having a centralized authority to appeal to. Central authorities can ban the person harassing you from the site, reverse a credit card transaction that you authorized under false pretenses, stop supposedly-academic organizations from getting your permission for your data and then giving it to Russian propagandists, even censor ideas you don't like. Crypto early adopters are individualist libertarian types who think of all these features as unnecessary or even outright harmful, but I think a lot of ordinary people would rather be on central platforms with these things.