Web 3.0 and the underlying distributed ledger technology has the potential to fundamentally change every aspect of how we engage with the digital world. Anna Grafton-Green, Regulatory Head of Legal at Blockchain.com, talks us through the world of Web 3.0 and what it means for lawyers.
The internet has had two distinct phases, pre and post social media. The initial phase, known as Web 1.0, was a digital playground where creativity and imagination reigned. Monetizing users was uncommon, and most web pages didn't even allow advertising.
Social media was the tipping point which saw economies move from human to data capital. Every man, woman and child could become a content creator and tap into this new revenue stream. Data was the new gold, and the internet was leveraged to extract as much of it as humanly, or digitally, possible. Web 1.0 became Web 2.0. And now Web 3.0 is making its presence felt.
At the center of Web 3.0 is Blockchain, described by Investopedia as, "A distributed database that is shared among the nodes of a computer network. As a database, a blockchain stores information electronically in digital format. The innovation with a blockchain is that it guarantees the fidelity and security of a record of data and generates trust without the need for a trusted third party."
One of the best-known applications of blockchain technology is Bitcoin, which since 2009 has gone from $0 in value and relative anonymity, to a peak of $64,000 USD and the centerpiece of a $3.1 trillion cryptocurrency market.
A new era of technological evolution is undoubtedly underway as Web 2.0 makes way for Web 3.0. Given the degree of technical expertise and the relatively sparse regulatory environment, this shift necessitates the involvement of audacious counsel who are not afraid to grapple with the consequent avalanche of new information.
Blockchain.com is a financial services firm that caters to both retail and institutional users in the crypto asset space. Anna Grafton-Green's role is to “look holistically at the business across both the retail and institutional space and ensure that the business is supported in navigating an increasingly complex regulatory environment”.
Grafton-Green believes increasing regulatory and legal certainty is a positive sign for lawyers interested in this space. “If you think about the underlying technological concepts in distributed ledger technology, we’re going to see increasingly more use cases for it. We will definitely need more involved expertise on how some of the legal issues surrounding that technology get resolved.”
She says certain skills are essential. “We are always hungry for people with transferable skills. It's about building an interest and an understanding of what’s going on in the legal and regulatory space and articulating well what transferable skills you can bring across.”
According to Grafton-Green, one of the most captivating challenges is how to map virtual activity around real world rights. “One of the really interesting questions we’re working through, is how we create and what kind of rights we can create in the digital universe," she says. "There is a question to be answered conceptually about how you map those into the real world, how you ensure they’re properly enforced, and how you ensure they operate well.”
Web 3.0 provides the opportunity to forge fit-for-purpose regulation as well. "It is a terrific opportunity to help contribute to the legislative and regulatory agenda. There are regulators who really want the industry at the forefront helping and educating them," says Grafton-Green. “It’s one of those rare opportunities where you get to be less reactive as a lawyer, and a little more focused on working through interesting and innovative solutions.”
The advent of Web 3.0 is providing an abundance of opportunities for counsel looking to shift gears and move into a field that is as challenging as it is diverse.