- Decentralization - it's great that you've come to an agreement with a hosting and domain name provider, but imagine that at some point you get information that, for example, their business is going bankrupt or has a failure of the main and emergency power supply at the same time (there are cases when someone does not check the installation surge protectors), a serious hack into the system, etc. Your service ceases to exist (at least for some time).
In Web3 100% on-chain, such a situation does not exist.
This would be true if 100% on chain would be possible, but it's not. First any program to be useful needs to react to inputs from the real world and produce output effecting the real world. For example, if I want to order something online, I need a way to place my order, and as a response to that, some machines or workers in a distribution center needs to start packing my order. It doesn't matter how long your "code" survives if the respective real world infrastructure is missing to make the code do anything, it will just be abandonware like any other software is.
There is not a single online service that would benefit from being on the blockchain, because in the end they require some backend systems to feed in and outputs to the chain. And if you must host a backend service, you don't need to put parts on the blockchain.
Even more so the blockchain itself is not decentralized. Technically it is, but logically the chain acts as one entity, so all the information is centralized. So for example if there is a vulnerability in the chain, everyone globally can exploit it. And this has happend multiple times. Whole chains broke down because through vulnerabilities attackers could completely exfiltrate all the funds stored in these chains.
Even more so, we know that with ETH, the Ethereum Foundation has total control over the chain and can at any point in time do a rollback, which they have done in the past. So by putting your data on the ETH chain, you are completely exposed to them and their decisions. But if you put your app on your own systems, you are in control. Imagine having a buisness and you make a lot of money, then the Foundation decides to make a rollback and you just lost all your transactions for a month. Great prospects right?
- The principle of necessary knowledge - during a coffee break, hosting service providers' technicians read the medical records of the patients of the medical entity stored on the servers. Just kidding! They are so swamped with work that they do not have time. But they can do it.
In Web3 100% on-chain, such a situation does not exist. You and only you regulate the access rights to the data. There are no intermediaries or snoopers! The data is natively encrypted, and the consensus mechanism guards, among other things, the access rights to this data.
All the data on the chain is public knowledge, you can't have access controls on data hosted on the chain. Any form of access control must per definition be performed off chain, e.g. by using end-to-end encrypted data and sharing the keys with other users. You could do the authentication of said users over the chain, but you could also do it using classical PKI or web of trust, or any other mechanism.
There is nothing about blockchain that enhances privacy. To the contrary, the fact that every transaction is open is a huge privacy leak. E.g. you don't need to know my medical records, if you can see on chain that I regularly interact with the wallet of some cancer clinic you can deduce that I or someone I know might be suffering from cancer.
So having transactions open to everyone is a huge privacy risk. Web3 is the absolute nightmare for anyone interested in privacy. This is why pretty much every european data protection supervisory bodies, like the BfDI here in germany advise against blockchain based solutions for personal data.
- Exclusive rights to value - let's assume that you have written a great programming library, a piece of code, etc. If you want to distribute this piece of code, you create a repository, make it public, describe it with a license, or create an API through which there is access to the functionality of your code. A lot of work and guarding the space.
In Web3 100% on-chain, such a situation does not exist. Of course, you can make the code repository public (and it is done), but why not embed this code in a blockchain canister and make its API available to other canisters? If the original Tetris code had been placed in Web3, Alexey Pajitnov could be in a completely different reality today.
And who enforces these rights? If I just take some work thats not mine and put it on the chain, do I gain rights for it? You cannot infer ownership from technical association. You always need some authority that decides which chain, and which data on the chain is authentic. And if you have such an authority you can use different solutions like PKIs and have said auhtority issue certificates and keep a ledger.
Conceptually blockchain does not add any value to any services except maybe financial transactions. And even this only to a very limited degree. Because besides the fact that Blockchain does not solve a single issue, not even the ones you outlined above, it creates a whole bunch of new issues. Inputs to the chain can only happen through transactions, and each transaction costs money. At the time of writing the gas fees for ETH are 24 USD. Meaning any time you interact with a program on the chain you have to pay 24 USD. Made a typo, easy correcting that typo just costs you another 24 USD. Just let me buy a pair of scissors of amazon for 5 USD and add 24 USD transaction costs on top... What a bargain.
Second is the speed. ETH has an average speed of 15 transactions per second right now. With a maximum transaction size of around 1 MB meaning you have a whopping 15MB/s speed, for the whole Ethereum Network. The SSD in my PC can do 3000 MB/s so my PC can process 200x the amount of data locally than the Ethereum network can do globally. And it doesn't take 24 USD per input to do so.
Lastly as I said the chain is logically not decentralized. All transactions need to go through the same chain, and eth gas prices are dependent on the total load of the chain. So transactioncosts here go up globally. Meaning if I want to buy a coffee here in Germany with eth, and there is some event in let's say Australia that causes an unusual load on the network, the transaction costs for my coffee go up even though it has nothing to do with the event in Australia.
Because the chain is a central entity, your business on the chain is suddenly effected by completely unrelated events just because they share the same chain.
On the other hand my hosting costs here in Germany don't go up because some hoster in Australia gets high demand
Web3 does not work. Theres a reason why you can't buy any commodities with crypto currency, and why no major buisness has moved to chain. There are solutions to these problems, but they all include taking data off the chain, processing them by a third party and either having only trust anchors on the chain, or having the information being processed onto the chain. Which yes indeed solves these problems, but makes the whole idea of using the chain completele meaningless.
My favorite term of 2021 was "private block chain" where companies would solve these issues by hosting their own private chain in their own data centers.
For the chain to be useful, you need to not use the chain. So skip the middle man and just don't use the chain to begin with[/list]