Our Response to “10 Principles for World Leaders Shaping the Future of Web3”
We are excited to share our take on one of the articles from Andreessen Horowitz, a renowned venture capital firm from the United States. On January 7th, 2022 two of their analysts, Tomicah Tillemann and James Rathmell, published a piece titled “How to Build a Better Internet: 10 Principles for World Leaders Shaping the Future of Web3.” These recommendations and our reaction are intended to help continue and further the conversation around these important topics.
We agree with the authors that Web3 has the potential to power more dynamic, transparent and potentially vibrant economies in all corners of the world. The challenge truly lies in how to create a policy framework that can responsibly introduce these technologies in a uniform, consistent and repeatable manner.
“1) Establish a clear vision to foster decentralized digital infrastructure”
Decentralized digital infrastructure has the capacity to enable even the smallest of countries to self host the resilient robust and scalable infrastructure which changes the reliance on patron states. A group of political leaders needs to form and create, document, and disseminate a clear vision for how to control decentralized digital infrastructure without stifling the innovative capabilities of the technology.
The first pieces of this clear vision were articulated by the VFA framework in Malta, the Trust laws from the New York State Department of Financial Services, and the Monetary Authority of Singapore’s Digital Payment Token guidelines. There are stark differences between these regulatory schemes which makes business operations unpredictable.
There needs to be a universal, consistent, and scalable framework that allows for small innovators to be able to experiment while containing the amount of potentially negative outcomes. The framework needs to allow for the adaptation to new conditions and new types of infrastructure.
7) Deploy web3 to further sustainability goals
Web3 has received a bad reputation for being unsustainable and environmentally wasteful, however, blockchains running Proof-of-Work algorithms are truly the only culprit. Proof-of-Stake and Proof-of-Authority consensus algorithms do not suffer from the computational overhead of PoW, and a variety of other Web3 technologies are as sustainable as their Web2 analogues.
Web3 sustainability revolves around how to minimize the collective draw required to power these decentralized technologies. More efficient computers, more efficient networks, more capable batteries, and green power generation will help to make this wave of tech evolution more sustainable, however, at the same time the deployment of sustainable power relied on Web3, like the blockchain command and control of a solar or wind array, and the accounting for the distribution and consumption of power in the system could be hosted on the same blockchain. Further the billing for and payment could also be hosted on the same blockchain. The deployment to support one activity in essence created the infrastructure for the rest.
8) Embrace the role of well-regulated stablecoins in financial inclusion and innovation
Stablecoins, or the concept of money that does not fluctuate in value, can have a significant impact on international finance if they are embraced by the legacy financial institutions. The distribution of aid rewards would be significantly less leaky if every step of the process from donation to aid delivery was transparently recorded and available on a public blockchain.
When the Venezualan government unilaterally de-pegged their currency from the US Dollar and devalued the currency 97% in January 2018, not only did the population lose their life savings, but the Non-Governmental Organizations like the UN’s World Food Program lost 97% of their budgets that had been staged in country for the year. If it had been held in a stablecoin, the fluctuation of the local currency wouldn’t have impacted the aid for the year.
9) Collaborate with other nations to harmonize standards and regulatory frameworks
The understanding of how to legislate around the constantly evolving digital infrastructure to minimize its negative potential impacts and maximize its positive ones has eluded nearly all countries. We are 10 to 15 years behind in controlling Web2, and have to become better at establishing these ceilings, curbs, limits and liabilities prior to the cultural catastrophes we see from social networks and the oversharing economy.
We need to be more intentful while rolling out this new suite of technologies. For example if we had been able to psychologically measure the negative feedback loops born from a constant barrage of photoshopped people we would have caught and prevented the subtle algorithmic manipulations in Instagram, Facebook, TikTok and YouTube. The Gen Z and Gen Alpha self image, financial expectations, and mental health will be vastly different than their parents, and more so their grandparents because of this.
We need to create the framework and get buy-in before the genie is completely out of the bottle.
