Will Web 3.0 Secure a Democratic Future?

Technology Policy Web3 and Crypto

Will Web 3.0 Secure a Democratic Future?

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Posted on: 24th March 2022
Greg Johnson
Technology and Public Policy 2021 Fellow

    Techno-optimists believe decentralised technologies can fix today’s internet and reinvigorate democracies around the world. But how can policy leaders prepare for a Web 3.0 future and distinguish hype from reality?

    Democracy is on the brink. From the rise of authoritarian politics to widespread distrust in public institutions, calls for disrupting the status quo are everywhere. While political pundits often use the term “failed states” to describe countries unable to sustain themselves, perhaps a more common phenomenon these days are “stuck states”: countries that remain functional but are so incapable of responding to the big challenges of our time that they put their long-term security at risk. What if new technology could unstick our deadlocked politics and empower societies to build democracy by design? Some say Web 3.0 is our answer.

    What Is Web 3.0 and What Does It Have to Do With Democracy?

    What Is Web 3.0 and What Does It Have to Do With Democracy?

    Web 3.0 is a vision for the next phase of the internet’s development that imagines a decentralised ecosystem based on blockchain technology. It would mark a departure from the centralised megaplatforms and corporations that dominate the ecosystem currently and, proponents claim, fix what’s wrong with the internet of today along with reversing the erosion of democracy.

    What Do Web 3.0’s Proponents Believe Is Wrong With Today’s Online Ecosystem?

    It’s impossible to speak for all Web 3.0 advocates, but the following is a summary of common criticisms of the status quo related to the centralised web.

    A small handful of winners in the technology industry – Meta and Amazon, to name two – dominate the closed and centralised ecosystem of the present. In many ways they serve as gatekeepers or intermediaries to people’s digital lives. Because of the network effects of platforms that accumulate a critical mass of users, competing against them is incredibly challenging, even if someone were to develop a superior product. People who want to participate fully in society feel compelled to join these platforms. Their recommendation systems, product features and community guidelines thus profoundly shape what content people consume in their daily lives, and the actors determined enough to figure out how to use them most effectively possess disproportionate influence.

    A centralised ecosystem also means that these gatekeepers can collect and use vast amounts of people’s data in ways individual users have limited control over. Such an environment is vulnerable to abuse (as seen in cases like the Cambridge Analytica scandal), data leaks and business models dependent on leveraging access to users' data for micro-targeted advertising. Under this model, platforms feel pressure to design their services in ways that maximise user engagement and tracking, and those design choices do not always align with what is best for democratic values or the public good.

    Web 3.0’s proponents also see centralised platforms as inherently vulnerable to government interference. Platforms possess the technical means to remove content or share data about their users. As a result, governments can compel them to remove or restrict the visibility of content they deem illegal and request platforms to send people’s private data without user consent. Meta’s transparency centre shows that in the first half of 2021 alone, governments sought content restrictions on 39,400 Facebook posts and submitted 351,471 requests to access private user data. Regardless of whether each particular government request is well intentioned or nefarious, this is a powerful tool at risk of abuse by bad faith actors. In short, people can only hope that the decision-makers at these platforms will protect them from government abuse. Russia’s recent “fake news law” following its invasion of Ukraine is merely the latest example of a government attempting to use its authority to compel platforms to bend to its will and silence those who dissent.

    Why Do Some Think Web 3.0 Would Fix Any of This?

    Proponents argue that Web 3.0 offers structural changes which render the inherent problems of today’s online ecosystem largely obsolete. Gavin Wood, sometimes described as the father of Web 3.0, explains that “platforms and apps built on Web3 won’t be owned by a central gatekeeper, but rather by users.” This is made possible by its blockchain infrastructure, the same technology that undergirds cryptocurrencies. In Web 3.0, there will no longer be a need for large, privately owned data centres; instead, data is stored securely and distributed across many devices. Anyone with the means and technical knowhow can make their device a node in this system. Such a design also reduces the risks of massive data leaks because data is no longer centrally stored.

    Another key advantage to Web 3.0’s blockchain infrastructure, proponents argue, is the embedded encryption. As Bernard Marr writes, “Data stored on a blockchain can only be accessed by people who have permission to do so.” Rather than placing trust in big tech to treat data with integrity, people control their own data. This eliminates the possibility that platforms or governments could access data without the explicit consent of the owner. Should a government send a Web 3.0 platform a takedown or data access request, it could be technically impossible to comply.

    Web 3.0 could also weaken the network effects of platforms and give that power back to users. Currently, network effects help platforms hold on to a critical mass of users and that makes it challenging for potential rivals to compete against them. Ongoing projects like Peepeth and Bluesky (funded by Twitter) could undo this imbalance. If successful, Bluesky’s protocol would be a decentralised social layer of the internet that empowers users to seamlessly port their data and followers between platforms, “creating an environment where developers can freely build, communities can self-govern, and users can easily switch services”. This new social layer could spark a new era of generativity online. Imagine a social media landscape with thousands of interconnected boutique platforms, each designed with their members' values in mind rather than to maximise their corporate owners’ profits or missions.

    But How Could Web 3.0 Reinvigorate Democracy and Overcome Deadlock?

    Proponents of Web 3.0 believe it could reinvigorate democratic values at both the internet level and the societal level.

    It is argued that the Web 3.0 iteration of the internet will be structurally more democratic and free than what came before. The security and privacy of blockchain technology that undergirds Web 3.0 could serve as an incontrovertible check against government overreach or coercion. Its decentralised architecture will promote the rights of individuals over traditionally powerful actors by giving users more choice over how they interact online. The “one person, one vote” principle of equal representation would supposedly be built into Web 3.0’s very design with a token model used to power its applications.

    Many take it a step further, asserting that Web 3.0 principles can be applied in ways that shape our offline lives, reorganising societies to overcome political deadlock. One such example is known as decentralised autonomous organisations (DAOs). DAOs are described as democratised, member-owned and internet-native organisations without centralised leadership. When members of a DAO are debating an organisational decision, each member can submit proposals and then vote on them using governance tokens (or delegate another member to use their tokens to vote on their behalf). Once a simple majority of the member-held governance tokens calls for a decision to be made, it is automatically executed. There is no need for a hierarchical structure or trusted intermediary at any stage of the process.

    According to proponents of DAOs, this organisational model can ultimately replace deadlocked and corrupt governments. This is because its structure creates what they call “liquid democracy – an optimal blend of representative democracy and direct democracy that can be applied at scale. No longer will citizens need to place trust in a potentially crooked politician to represent their best interests or have to worry about popular legislation being blocked from a vote; instead, the DAO’s code automatically enacts the majority view of its members. DAO advocate Richard Merkle believes this new approach to governance “allows us to design a new form of democracy which is more stable, less prone to erratic behavior, better able to meet the needs of its citizens, and which better uses the expertise of all its citizens to make high-quality decisions”.

    Are There Reasons to Be Sceptical About Web 3.0?

    Are There Reasons to Be Sceptical About Web 3.0?

    Web 3.0 has its fair share of sceptics, especially regarding assertions about society and democracy. Is it the latest example of overhyped and flawed technological determinism?

    Some social scientists see the Web 3.0 movement as the latest iteration of a misguided techno-utopianism, or the belief that technological advancements can determinatively bring about an idealised future that solves some or all perceived social ills. Dr. Nathalie Maréchal asserts that placing this much faith in Web 3.0 reflects a “demand for technical solutions to deep-seated sociopolitical problems”. From this perspective, the bold claims of Web 3.0 advocates are ultimately preying on the hopes of well-intentioned people in search of a simple solution to the complex problems that plague many democracies today.

    It is easy to forget that similar claims were also made by techno-utopians regarding the internet of the 1990s. John Perry Barlow famously asserted in 1996 that the internet would necessarily bring about a libertarian paradise free of government interference. Others around the turn of the century also predicted that the internet’s widespread adoption would reinvigorate democracy. Scholars such as Antje Gimmler wrote that because of the internet’s affordances for interactivity and its equalising effect on access to information, societies could realise deliberative democracy ideals. At that time, buzzwords such as “crowdsourced democracy” were used to describe a vision for a future where governments made decisions via widespread collaborative decision-making online. That discourse is eerily close to conversations around DAOs today. Barlow and others, of course, were eventually left disappointed. Many expect that Web 3.0 will similarly fail to fulfil any idealised vision of decentralisation and democracy by design.

    How Decentralised Will Web 3.0 Ultimately Be?

    While Web 3.0 is designed to be structurally decentralised, by some measurements it is currently quite the opposite. Wealth and influence over some Web 3.0 technologies are in the hands of a very few. For example, the top 0.1 per cent of Bitcoin miners control close to 50 per cent of all mining capacity according to a 2021 study from the National Bureau of Economic Research, and the distribution for Etherum is not much different. The authors of the study also assert that “the majority of the gains from further [Bitcoin] adoption are likely to fall disproportionately to a small set of participants”.

    In another apparent contradiction to the ideal of a decentralised web, centrally owned cloud data storage services provided by big tech players such as Amazon and Microsoft host a large number of blockchain nodes. For example, 25 per cent of all Ethereum workloads run on Amazon Web Services. Moreover, Web 3.0 crypto and NFT ecosystems are already centralising around a few large platforms in ways similar to today’s web. Platforms like OpenSea and Coinbase are achieving extraordinary success mediating much of the Web 3.0 experience for millions of people.

    Is Centralisation as Dangerous as Web 3.0 Advocates Make It Out to Be?

    Web 3.0 advocates make it clear that centralisation has its risks and highlight the negative consequences of the centralisation of today’s internet. But its advantages are overlooked, especially with regard to online safety. One key question: will there be any meaningful checks against spammers, trolls, disinformation actors or criminals on Web 3.0 platforms?

    Centralised platforms can remove harmful accounts without directly impacting others using the service, but this becomes more challenging on decentralised platforms based on the blockchain. There are still no clear answers regarding what content moderation, account removals or trust and safety generally will look like on decentralised platforms. And the more decentralised a platform is, the more likely it is to lack the means to keep people safe online. On a truly Web 3.0 service, to remove one account, you must interfere with the entire blockchain and thus also negatively impact the experience of all other users. This design can act as a protection against potential abuse from powerful actors, but it comes with the price of potentially leaving dangerous content up in perpetuity. Moreover, if you were to share an embarrassing piece of content on a Web 3.0 platform and later regret it, it is unclear what remedies are available to you.

    While platforms such as Facebook and Twitter get a lot of criticism for their content moderation approaches, fraudsters, spammers and harmful content and activity would be even more prevalent without big tech’s efforts to clean up their communities. These platforms have immense financial resources, technical capabilities and in-house expertise to combat abuse and block illegal activities. While some Web 3.0 social platforms share higher-level information about how they might address such abuse challenges, it is uncertain if decentralised services could ever reach parity with big tech’s efforts. Some proponents even exclaim as a point of pride that content may be “not censorable” because of the immutability of data on Web 3.0 services. But to understand the potential consequences of a hands-off approach to content moderation on healthy public discourse and user safety, one need only look at platforms like MeWe or Rumble or the spam-infested platforms of the early 2000s.

    While Web 3.0 may have a decentralised architecture, it is currently on the path of having a small number of individuals with disproportionate influence, a significant presence of big tech, and under-addressed safety challenges. That doesn't sound all that different from the internet of today.

    Web 3.0 Might Become the Norm Either Way

    Web 3.0 Might Become the Norm Either Way

    It is impossible to know yet whether Web 3.0 will unstick our deadlocked politics and meaningfully address the faults of today’s internet ecosystem. What we do know is that Barlow was wrong about the internet creating a libertarian utopia, and many others were wrong about previous phases of the internet reinvigorating democracy. But the internet became dominant in the decades that followed anyway. Powerful and well-resourced organisations are now investing heavily in Web 3.0 technologies. We are already witnessing widespread adoption of such technologies among young people: over half of millennial and Gen Z adults from the US have invested in cryptocurrencies according to a recent market survey, and Web 3.0 companies like Coinbase are valued well into the billions of dollars. So while this all may go bust, the Web 3.0 vision for a new internet may become a reality even if the supposed benefits to democratic societies do not materialise or, worse, ultimately create adverse outcomes.

    How Should Leaders Prepare?

    How Should Leaders Prepare?

    1. Remain hopeful, but sceptical, about Web 3.0. Develop a national strategy around Web 3.0 development and adoption. Encourage robust consumer protection and competition laws to prevent and mitigate the harms that can come with centralisation.

    A truly privacy-preserving, more decentralised digital world is something we want to see in democratic societies. But just because Web 3.0 could be built with these values in mind does not mean it will end up that way. It is wise to be sceptical about new technologies, especially those primarily funded by private interests. Despite all the enthusiasm among Web 3.0 proponents, the risk is high that it will just centralise around a new set of powerful actors. Encourage informed and responsible innovations that avoid replicating today's overly centralised internet or, worse, innovations that lead to undemocratic outcomes.

     

    2. Support research into the risks of Web 3.0 technologies on society and put those findings into action. Require platform owners to conduct independent threat assessments and commit to design their services in ways that are demonstrably robust against abuse from the start.

    Web 3.0 is still in its infancy. Now is our chance to demand that its drivers seriously consider and address its abuse vectors from the start. We can avoid awkwardly patching up egregious errors after it’s already too late, in the way societies are having to do with many big tech platforms today around issues such as fraud, child safety and misinformation.

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