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Web3: A Tool to Enhance Democracy, Equity, or Neither?

Proponents of Web3 claim that it is inherently democratic. But this proclamation seems hasty. Web3 looks a lot like previously developed tools that, while heralded as silver bullets to improve democracy, come up short of this goal in practice. Instead, tools like Web3 tend to merely decrease equity in our society.

First, what is Web3? Web3 is a new version of the internet built using decentralized blockchains.  The term “Web3” isn’t new—it’s actually been around for years—but it was recently popularized by the explosive growth of blockchain technology.

As the name indicates, Web3 is often considered the third era of the internet, following Web1 and Web2. Web1 represents the early days of the internet. In this phase, using the internet was a largely individual experience: the space was primarily populated by web users and web builders. This was before corporations turned to websites for meaningful growth, drawing websites to develop a strong corporate presence. Enter Web2—the phase of the internet we’re in now. Web2 is a corporation-dominated, centralized model where companies have enhanced the functionality of the internet by running centralized services. In Web2, most of the value is owned by just a few companies like Google, Amazon, Facebook, and Twitter.  Advocates of Web3 hail it as the next step of the Internet, one that is more secure than Web2 and will help users break free from centralized control.

The idea behind Web3 is to create an internet with platforms that aren’t dependent upon traditional companies and Web2 business models.  Instead, Web3 is more like a web of data where users themselves get to vote for software protocols, putting power in the hands of the users instead of corporations. The Web3 internet is supposed to be operated, owned, and improved by community users.

Supporters of Web3 claim it advances democracy. They view Web3 as an opportunity for users to own their own data and have the option to operate quasi-anonymously online.  Advocates      claim that Web3 is more secure because it is decentralized, which means there is no central database to hack. Additionally, they attest that Web3 shifts power back to users because (1) it makes it harder for governments to interfere with user activity, protecting private life from government control, and (2) it curtails China’s growing data dominance.  Supporters of Web3 argue that these factors, together, make it a more democratic version of the internet.

While Web3 may well achieve the three goals its supporters present—enable data ownership by users, make the internet more secure, and shift power to the hands of certain users—these features do not necessarily make it a more democratic version of the internet. Instead, they will likely lead to less equity on the internet.

First, Web3’s data monetization model will shift concentrated power away from companies, but it does not promise equal distribution of that power among users. In fact, it will likely increase concentration of power in the hands of a small minority of individuals who are already coin-wealthy participants in the structures that Web3’s decentralized infrastructure is based on.      Even if structures are proactively designed to increase equitability on Web3, a system that assigns a dollar value to everything—from a person’s data to the size of their vote regarding software protocols with which they interface—inherently creates outsized opportunity for the wealthy.

Second, Web3 will likely be more secure than Web2—because it is a decentralized system on a unified blockchain—but security is not democratic in and of itself. Further, surveillance-oriented security tends to decrease equity. Part of why blockchain technology is so secure is that it is an open-source technology. While blockchain-based financial systems assign a pseudonym to each user, when Web3 expands the blockchain to new realms—like social media—it will likely become easier to track a user’s identity and activity through the Web3 blockchain. This is specifically bad for equity on the internet since surveillance tends to be disproportionately directed at, and felt by, historically marginalized communities.

Third, shifting power to certain users does not guarantee a more democratic environment, but it is inherently unequitable. Web3, which some have called “the Wild West of speech and power,” would greatly enhance the individual freedom of users at the cost of increasing the circulation of      disinformation on the internet and reducing the government’s capacity to police hate speech. This could decrease a citizen’s ability to make informed decisions when voting and otherwise participating in democracy. Additionally, if Web3 only shifts power to certain users, it is an omen for equity on the web because it widens power gaps between individuals who hold power on Web3 platforms and those who do not. Web3’s propensity to shift power into the hands of certain users is likely bad for democracy and certainly bad for equity.

It is not shocking that Web3 seems like an exciting new step for the internet. America’s social and legal structure places a high value on property rights and ownership, state protection of citizens, and meritocratic development of personal wealth and success. So, it makes sense that technology enthusiasts welcome a version of the internet that taps into these values by increasing data ownership and security in the information age and rewards users who joined the trend early.

But while data ownership, security, and meritocratic gains are concepts worth advancing, they are not best advanced through Web3 in its current construction. Web3 will strengthen silos rather than build bridges. It threatens to widen the gap between the “haves” and the “have-nots.” Web3 is exciting, but the features it currently promises are not inherently democratic. They are more likely to increase inequity in our country than they are to improve democracy.

Alyssa Domino

Technology Law & Policy Scholar, Georgetown University Law Center, Expected 2023. Wesleyan University, B.A. 2017. © 2022, Alyssa Domino.