Background

“Cryptocurrency and Web3 are a counterculture, hacker, open- source response to the hyper-scalers and the centralization of compute and data ownership.”

Central to our ongoing research on The Future of Digital Self-Sovereignty is a need to understand the growing tension between the individual and the nation-state in the digital domain, especially autocratic surveillance states, and the potential value propositions of Web3 architectures that enable new business models and governance frameworks. 

Before the Web3 ecosystem emerges and evolves into a fledged marketplace with winners and losers, aligned economic incentives and regulatory oversight, however, societal trust remains fragile and will impact the ability to build trust into these new systems. While we always strive to drill down to the What Next? of it all  – and to prioritize actionable business strategy insights – digital self-sovereignty only becomes a mature marketplace  – with recognizable market dynamics, platforms, ecosystems, and business strategy implications  – after we puzzle through the more socio-technological implications. 

Edge cases, crypto creative destruction, community building, collective intelligence, partipatory culture – essentially, bottom-up dynamics – all figure prominently in our an analysis to date.  In the end, our working hypothesis is that a Web3 ecosystem with digital-self sovereignty for the individual as a central design element  – prioritized over nation-state data and digital self sovereignty – holds great promise to correct some of the unintended consequences of the legacy Web 2.0 system.  As with everything else, AI/ML will also figure prominently. 

In a conversation with OODA CTO Bob Gourley in a recent OODAcast,  MITRE’s Charles Clancy provided a far-sighted analysis of the state of play and the potential of it all:   

“Cryptocurrency and Web3 are a counterculture, hacker, open- source response to the hyper-scalers and the centralization of compute and data ownership.  Web3 has started to separate itself from crypto – with crypto as only one application of Web3.  Of course, in the pandemic, we saw crypto prices start to sort of skyrocket, then collapse, mostly due to discovering some of the insecure and fraudulent underpinnings of certain major pieces of the crypto economy.  But my hope is that we have gone through the whole hype cycle now, and we can actually start building Web3 out of all the building blocks that have kind of been thrown off by this ecosystem in the last ten years – that really are decentralized.  

And what I really like about Web3 and this whole notion of decentralization is, from a U.S. perspective, it could be a really good technical offset strategy to China’s Belt and Road Initiative. So, China is very interested in exporting its very verttically integrated, cloud, 5G, surveillance technology tech stack to other countries through Belt and Road. I think that as we shift towards these decentralized technologies,  it is inherently anti-authoritarian in the way that the technology works and works together.  You have this whole notion of democratic control of services under the hood.

No one entity controls any of these different things.  I think there is a real opportunity to invest in Web3.  One, because it is a cool set of new technologies.  The decentralization is really interesting from a technology perspective.  But I think from a policy perspective, it is the natural answer to authoritarian tech stacks that we are seeing in other parts of the world.  We have a paper we published on the topic.” 

Democratizing Technology: Web3 and the Future of the Internet

“Web3 promises a future World Wide Web far different from the centralized, hyperscaled, and structurally authoritarian era of web2. MITRE offers policy recommendations that complement government, industry, and academic efforts to advance web3 and increase user adoption.”

From the Report: 

The architecture of today’s World Wide Web is, in many ways, an authoritarian one—built around a business model and technology stack that rewards vertical integration, massive aggregation of user data, and hyperscale centralized management. This architecture has provided benefits in terms of society-wide connectivity and scalable use cases, but comes at the cost of user privacy and autonomy, and domination of this crucial facet of modern life by a few enormous firms.  Worse, this architecture facilitates surveillance not simply by profit-maximizing hyperscaler service providers, but also—in authoritarian regimes—by the repressive state entities to which such providers are answerable.  China, for instance, is harnessing data to manage and control the lives of its people by requiring them to use software that defines a new precedent for forms of automated social control. 

The authoritarian cost of today’s web2 architecture developments call for a response, but it is not enough to denounce the impact of the web2 technology stack on human rights, privacy, and democratic norms.  We also need a better answer: the establishment and advancement of alternative technological paradigms to protect the public interest by making authoritarian misuse difficult or impossible. 

Web3 technology can help provide an offset strategy to counter the rise of authoritarian and surveillance-facilitating regimes. This paper expands on previous MITRE publications discussing web3 by describing how earlier web-related technology stacks and economic modes have led to data centralization, and how much of this centralization within web2 can be unwound by web3; it also presents use cases where an alternative paradigm is already starting to take hold. Most visibly, this is already happening with decentralized finance and cryptocurrency, but web3 can decentralize any digital service.

What Next?

“…there is much to do to make web3 a reality, make it safe and reliable, and equip it to fulfill its potential.”

Clancy and his co-authors offered the following strategic insights in the report: 

As new protocols are considered for web3, this paper offers the following specific policy recommendations that complement government, industry, and academic efforts to advance this technology and increase user adoption: 

1. Develop a combined national security/economic security strategy that can maximize the benefits of a new decentralized payment system while mitigating illicit financial activities;
2. Advance global decentralized digital identity and digital data technologies to protect citizen privacy;
3. Promote accessibility standards to reduce burden of technology adoption;
4. Address the needs of the underbanked/unbanked by maturing prototype digital asset solutions; and
5. Convene international partners and advance an inclusive vision to strengthen democratic values, and protect citizens from threat actors, and develop and promote a decentralized, web3-facilitated response to the global growth of the authoritarian technology stack. 

Web3 promises a future World Wide Web far different from the centralized, hyperscaled, and structurally authoritarian era of web2. It could form a robust and decentralized, democratized alternative to the existing technology stack, but there is much to do to make web3 a reality, make it safe and reliable, and equip it to fulfill its potential. 

For the full MITRE report, go to Democratizing Technology: Web3 and the Future of the Internet