What Are the Policy Goals and Objectives of Web3?

Web3 is a set of technologies that aim to make the Internet more democratic, secure, private, and transparent. These technologies include blockchain, cryptocurrencies, decentralized applications (dApps), decentralized autonomous organizations (DAO), decentralized finance (DeFi), and non-fungible tokens (NFT).

All these technologies have the potential to change the way we interact with the Internet. However, they are still in their early stages of development. We need good regulation to help set rules for how Web3 can benefit society while managing any risks that could harm people.

With a well-established regulatory framework, Web3 can achieve three important policy objectives:

1. Give people more control over their data.

Web2 has allowed big tech companies to collect data about our activities. Because these companies own the data, they can use it for targeted advertising and other purposes.

Web3 would let people own their data. People could choose which data to share with companies and be paid for doing so. This would create a more fair and transparent system.

2. Reduce censorship and government control.

In a Web3 world, there would be no central authority controlling the Internet. This would make the Internet much more resistant to censorship and government control. It would also make it a more open and democratic space for everyone around the world.

3. Prevent mass Internet outages.

Web3 applications are decentralized, meaning that they are spread out across a network of different computers. If one computer on the network goes offline, other computers can keep the application running. This is different from Web2 technologies, which are centralized and run on a single network. As a result, Web3 would drastically reduce the likelihood of an outage happening.

What Are the Policy and Regulatory Challenges with Web3?

A new era of the Internet is emerging, with blockchain technology and cryptocurrencies leading the charge. As policymakers and regulators decide how to manage a rapidly evolving Web3 ecosystem, they face three big challenges:

1. Protecting user privacy and security.

The features that make Web3 applications attractive to users also create privacy and security risks. Scammers are beginning to take advantage of the anonymity that blockchain technology offers, and it can be difficult for law enforcement agencies to track them down.

In addition, blockchains are a permanent way of recording information. This means that once a transaction is complete, it cannot be changed. So if you send cryptocurrency to the wrong person, you will not be able to get your money back.

As Web3 grows, scammers and hackers are likely to become more attracted to the increased privacy and security that blockchain technology offers. This will make it more difficult to protect people who use Web3 applications.

2. Performing oversight without a centralized authority.

It will be difficult for governments to enforce Web3 regulations. This is because Web3 is decentralized, and many entities around the world must work together. Existing regulatory frameworks for cryptocurrencies and tokens are still new and evolving, and it is unknown how effectively governments can perform oversight functions.

In addition, it is still unclear how Web3 platforms will address issues such as content moderation and fraud. With centrally owned and managed platforms like Facebook and Twitter, it is possible to perform oversight and ensure compliance. However, this is not the case with decentralized Web3 platforms.

3. Minimizing energy consumption.

Blockchain technology is very energy-intensive. The largest networks consume as much energy as some countries. For example, Bitcoin consumes enough energy to power Ireland. This high level of energy consumption is a cause for concern. As Web3 platforms become more popular, their environmental impacts could be devastating.

Web3 Policy Recommendations

We recommend that policymakers and regulators take the following actions to help develop and advance Web3:

1. Consider whether existing privacy and consumer protection laws are enough to protect people from the risks of Web3.

If not, they should make laws that address the risks of Web3 and can help keep people safe. They should also decide whether and how to provide recourse for people who suffer damages as a result of privacy and security breaches. By taking these steps, policymakers can help ensure that people use Web3 safely and responsibly.

2. Determine which agencies should be responsible for Web3 oversight.

Web3 has the potential to improve the Internet in many ways. However, a regulatory framework is needed to keep it safe and secure. This is because criminals and hackers could use Web3 for stealing data, laundering money, and other illegal activities without proper oversight.

3. Monitor the environmental impacts of Web3 and find ways to reduce energy consumption.

Most blockchains need a lot of computing power to verify transactions. If more people start using Web3, the energy consumption of blockchains will likely increase. Policymakers must work with Web3 companies to minimize the potential environmental impacts.

Final Thoughts

While policymakers and regulators face several challenges, they have an opportunity to shape Web3. By working together, they can create an environment where innovation can thrive and Web3 businesses can grow.

We hope our recommendations provide some guidance on how to overcome the key policy and regulatory challenges and ensure that everyone benefits from Web3.

What do you think policymakers and regulators should focus on most when it comes to Web3 oversight? Let us know in the comments below!