Brave represents web 3.0: a disintermediated, decentralized, interoperable, customized, secured, and innovation-fueled version of internet, giving power back to creators and users. It is an upgrade over existing web 2.0, wherein large intermediaries and platforms took control, offered services for a premium and at the cost of privacy.
In addition to advertising, web 3.0 is directly connecting service providers and consumers across domains, including finance, cloud, computing, gaming, entertainment, art, knowledge, among others, thereby fostering a metaverse for diverse experiences. It leverages blockchain technology to ensure security and open infrastructure to enable innovation, transparency, and collaboration.
India has one of the world’s largest communities of content creators, start-ups, innovators, and developers. We are also of one the fastest growing internet consumer markets in the world. It is thus essential that we stand up and take notice of the potential of web 3.0 in democratizing benefits of digital technologies, and making India a truly inclusive digital society.
Chingari, a desi TikTok-like social media platform, is showcasing India’s potential by directly connecting creators with users, and enabling them to transact with each other through GARI tokens, another cryptocurrency. Using GARI, creators can directly monetize their content and also participate in vital platform-level decisions that impact their existence on the platform. These decisions are otherwise taken by the platforms behind closed doors placing millions of content creators and users at their mercy. Chingari recently raised close to USD 40 million by selling the GARI tokens, something unheard of previously.
Given that web 3.0 is emerging as an alternative to web 2.0, it intends to address a lot of inefficiencies of the latter, while preserving and democratizing its benefits. It does so by removing the large intermediaries and enabling a direct feedback loop between creators and users, and thereby providing in-built, transparent, governance and moderation mechanisms, on the back of blockchain’s immutability, wherein users can vote through their feet. The platforms are owned by users and are driven by communities, so the incentives are aligned for the communities to operate in the users’ interest.
Such mechanisms have capability to balance seemingly conflicting interests of free speech and public interest, by providing necessary resistance to censorship while offering adequate incentives to moderate problematic content. On the top of this, users get seamless portability and interoperability options, enabling them to explore other avenues if they disagree with the decisions, approach, or level of transparency. A vibrant example of this is to do with the most popular cryptocurrency, Bitcoin. Even Bitcoin users have in the past disagreed on the way forward, resulting in multiple ‘forks’ or splitting up of the Bitcoin network into two, each governed by a different set of rules.
Governments across the world are exploring diverse mechanisms to rein in the adverse impacts of web 2.0. These include ex-ante tools like stringent laws and regulations as well as ex-post ones like enforcement actions. While in right direction, these moves may prove inadequate on account of capacity constraints of regulators implementing them, and possibility of unintended consequences.
Governments are yet to recognize web 3.0 as an ally in this pursuit. Limited awareness about web 3.0, their inherent nature of designing regulations in a top-down manner, and distrust of anyone other than themselves to provide adequate governance, may have been acting as roadblocks in this regard. The mere thought of giving away power of governance to users and communities could obviously be problematic for governments. It is, however, necessary to cede control for greater good.
However, all is not lost for regulators. Web 3.0 is neither likely to be perfect nor an all-encompassing solution to all the challenges posed by digital society. Risks such as capture of communities by specific groups, inadequate grievance redressal, misuse for illegal activities, and entry of fraudulent actors may come at the forefront. It is, therefore, necessary for the governments to act sooner than later.
They must embrace web 3.0 with open arms and eyes. This implies acknowledging the potential of web 3.0 in empowering startups, small digital businesses, and consumers, and creating enabling environment to help realize such potential. It also means reaching out, listening, and genuinely engaging with stakeholders to understand the potential, risks and challenges of web 3.0.
To begin with, MeitY can lay down overarching principles for governing 3.0, with a focus on self and co-regulation, given that any rigid law is likely to be outdated soon. Knee-jerk reactions such as outright bans should be avoided, and nuanced risk-based regulations will be essential.
Through such principle-based governance, the government can aim to make India a hub for development of web 3.0 ecosystem by providing safe space for development, and take a first mover advantage for leveraging its potential.
*Rastogi is Founding Partner, Ikigai Law, and Kulkarni is Research Director, CUTS International.
