Last year, OODA CTO Bob Gourley spoke with MITRE Futurist Charles Clancy on our Quantum Enabled Future. During that conversation, Clancy also shared some MITRE research efforts on Web3 and the Future of the Internet, which dovetailed into our Digital Self-sovereignty thematic research efforts.  Following is another valuable contribution from the MITRE reseach team germaine to the theme.   

Call to Action: Developing a National Strategy for Web3

 Summary

“A national strategy for Web3 is essential to the U.S. building on its early lead in the technology and to mitigate potential detrimental outcomes.”

The internet is on the verge of the next fundamental change. The third generation of the World Wide Web, known as Web3, is bringing an entirely new technology stack built on blockchain. This new epoch of social interconnectivity blurs the lines between telecommunications and finance, compounding an already complex regulatory ecosystem.

While Web3 is creating tremendous new opportunities, it is also at the center of major social, economic, and national security issues. A national strategy for Web3 is essential to the U.S. building on its early lead in the technology and to mitigate potential detrimental outcomes.

In this paper, MITRE’s Charles Clancy, Ph.D., describes the generational arc of web technologies and the new, unique features of Web3, as well as policy objectives and specific recommendations for a national strategy.

Executive Summary

The internet is on the verge of the next fundamental change. The third generation of the World Wide Web, known as Web3, is bringing an entirely new technology stack built on blockchain. Web3 leverages a decentralized and distributed architecture to increase privacy, security, and transparency.

Section 1 describes the generational arc of web technologies and the new, unique features of Web3. This new epoch of social interconnectivity blurs the lines between telecommunications and finance, compounding an already complex regulatory ecosystem. While Web3 is creating tremendous new opportunities, it is also at the center of major social, economic, and national security issues. A national strategy for Web3 is essential to the U.S. building on its early lead in the technology and to mitigate potential detrimental outcomes. The White House Executive Order on “Ensuring the Responsible Development of Digital Assets” brings into focus this need across the larger national security, global economic and geopolitical ramification of Web3.

Section 2 proposes policy objectives of a national strategy that encompasses the continuum of Web3 digital assets as follows: Foster a regulatory environment and investment ecosystem that enables development, deployment, and adoption of U.S.-based Web3 technologies at home and abroad. Promote policies that incentivize decentralized implementations of Web3 technologies to maximize security and democratization of governance. Establish and advocate internationally for technology and economic policies that promote Web3 technologies built upon core tenants of transparency and democratization and minimize adopting technologies are being developed and operated under the outsized influence of autocratic regimes. Combat use of Web3 infrastructure for fraud and illicit finance. Promote social equity in adoption and the opportunity created by Web3 technologies.

What Next?

Clancy and his collaborators provide recommendations:

To support integration of interagency initiatives specified in the EO we propose coordination of activities around 3 major anchor points; Governance and the Regulatory Ecosystem, Economic Social and National Security Concerns and Creating American Opportunity.

The following are specific recommendations aligned to these anchors that are described further in Section 3:

Governance and the Regulatory Ecosystem

1. The White House should launch an initiative to develop an integrated regulatory framework for Web3, which engages both regulatory stakeholders and market participants.

2. The U.S. Government should conduct a review and analysis of the current U.S. legal landscape and international treaties on key issues associated with Web3.

3. A multistakeholder group, organized through a non-profit organization, is necessary to support Web3 governance and self-regulation.

4. The U.S. government should engage internationally, and through allies, to homogenize emerging regulatory frameworks and open-source software and standards.

5. The U.S. government should establish a comprehensive program working with market participants for combatting fraud and illicit finance on Web3 technologies.

Economic Social and National Security Concerns

6. The White House should lead an interagency initiative to develop a national security strategy for Web3.

7. The U.S. government should build on the working groups established by the Federal Reserve to address broader cryptocurrency and FinTech developments, developing a regulatory sandbox and other mechanisms that encourage innovation, private sector input into the process, and foreign partner collaboration to help build broad public support and inform the legislative process.

8. Existing social equity and access initiatives being undertaken by the U.S. government should reflect and seek to address the emerging challenges and opportunities with Web3.

9. The U.S. government should continue to monitor developments in Web3 and the implications to federal and international taxation, ability to detect and counter financial crimes, and levy effective sanctions.

10. The U.S. government should actively promote global adoption of Web3 technologies based on proof-of-stake or other energy efficient approaches.

Creating American Opportunity

11. The White House should develop a strategy for transforming electronic government functions using Web3 technologies.

12. Federal science agencies should include Web3 under the broader umbrella of “advanced communications” as they plan their larger applied research agendas envisioned under legislation such as the Endless Frontiers Act.

13. The U.S. government should adopt policies that emphasize the role of the private sector and open-source communities in leading Web3 innovation, development, deployment, and operation. 

Additional OODA Loop Resources

MITRE Futurist Charles Clancy on our Quantum Enabled Future:  Charles Clancy has successfully led technology efforts in government, industry, academia and continues to lead and innovate in his current position as Senior Vice President and GM of MITRE Labs. He is MITRE’s Chief Futurist. His role in technology leadership and his tracking of tech across multiple domains made for an incredibly insightful OODAcast.

The Future of the Internet, Trust and Web3: Data and Digital Sovereignty Versus Digital Self-Sovereignty: Charles Clancy, Chief Futurist at MITRE, and his co-authors of a recent report –  “Democratizing Technology: Web3 and the Future of the Internet” – provide the best framing of a “robust and decentralized, democratized alternative to the existing technology stack” and “the establishment and advancement of alternative technological paradigms to protect the public interest by making authoritarian misuse difficult or impossible.” 

Bitcoin’s Momentum: Bitcoin seems unstoppable due to solid mathematical foundations and widespread societal acceptance. Other cryptocurrencies like Ethereum also gain prominence. The Metaverse’s rise is closely tied to Ethereum’s universal trust layer. See: Guide to Crypto Revolution

Geopolitical-Cyber Risk Nexus: The interconnectivity brought by the Internet has made regional issues affect global cyberspace. Now, every significant event has cyber implications, making it imperative for leaders to recognize and act upon the symbiosis between geopolitical and cyber risks. See The Cyber Threat

Track Technology Driven Disruption: Businesses should examine technological drivers and future customer demands. A multi-disciplinary knowledge of tech domains is essential for effective foresight. See: Disruptive and Exponential Technologies.

Networked Extremism: The digital era enables extremists worldwide to collaborate, share strategies, and self-radicalize. Meanwhile, advanced technologies empower criminals, making corruption and crime interwoven challenges for global societies. See: Converging Insurgency, Crime and Corruption