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March 3, 2022

METAVERSE+ | Web 3.0 – Legal Considerations in the Spatial Era

Rapidly evolving technologies such as blockchain and artificial intelligence are heralding ‘Web 3.0’, a.k.a. ‘the next phase of the internet’. It is one which gives rise to exciting new possibilities for humanity, whilst also surfacing some multi-dimensional and fascinating legal and regulatory risks.   


Web 3.0 has been coined as the catchphrase for the next major step-off point in the evolution of the World Wide Web. It refers generally to the coalescence of emerging of technologies like artificial intelligence, blockchain technology and cryptocurrency. Web 3.0 is next phase in the natural progression of the internet, one in which websites and applications will be able to process information in a more advanced way, aided by novel technological developments such as machine learning, decentralised ledgers, and big data.

In this article, part of our METAVERSE+ series, we discuss Web 3.0 and some potential legal and regulatory challenges that may arise in this new era.

What is Web 3.0?

Web 3.0 was first conceptualised way back in 2001 by World Wide Web inventor Tim Berners-Lee, and is aimed at being a more open, intelligent and autonomous version of the internet as we currently know it.

Web 3.0 can be thought of as the next wave after Web 1.0 and Web 2.0. That is:

  • Web 1.0, also known as the Static Web, was the first generation of the internet that became available to users in the late 1980s. This version of the internet focused on increasing accessibility to the general public and forming the basic foundations of the World Wide Web. Web 1.0 equipped users with basic desktop and browser functions, but it lacked complex algorithms that enable users to sort through internet pages. This made it extremely difficult for users to locate information and create their own content.
  • Web 2.0, sometimes called the Social Web, made the internet much more accessible and interactive. It is marked in time as beginning in approximately 2005. By allowing data to be distributed and shared across different applications, Web 2.0 enabled start-ups to create interactive web platforms and social media websites, such as YouTube, Facebook and Wikipedia. This paved the way for social networks, user-generated content and the tech giants that dominate the internet today.
  • Web 3.0 is anticipated as the next stage of evolution. By harnessing artificial intelligence systems, blockchain and smart-programs, Web 3.0 may soon be able to process information with near human-like intelligence and unprecedented speed.


Features of Web 3.0

    1.   General

As shown in the schematic above, without being exhaustive, at time of writing some key trend-lines in Web 3.0 are:

  • Decentralisation – the disintermediation of the gatekeeper including through the blockchain
  • Ubiquity – everyone, everywhere, all the time through mobile connected devices and IOT
  • Anonymisation and Pseudonymisation – de-identification of the individual
  • Hyper-privacy – the right to be de-identified
  • Data control and ownership – the right to commercialise personal data
  • Creator economy – democratisation of content creation as digital tools mainstream
  • Hyper-local experiences & economies – rich vertical communities associated by physical proximity
  • Augmented Reality – the digital enhancement of physical worlds
  • Artificial Intelligence – the continued rise of robots
  • Elevated consciousness around environment, society and governance – social responsibility as core drivers

We pick up a few of these threads below.

    2.   Decentralisation

A key difference between Web 3.0 and previous iterations of the web is that data will be interconnected in a decentralised way. This is a giant leap forward from the current Web 2.0, in which data is generally stored in centralised repositories. Decentralisation is the cornerstone of blockchain and cryptocurrency technology, and it is highly likely that these technologies will converge with other fields, automated through smart contracts.

    3.   Ubiquity

Web 3.0 will make the internet accessible to everyone, anywhere and at any time. Web 2.0 is arguably already ubiquitous, as users can access information at any time via smartphones or portable computers. However, Web 3.0 aims to take this concept further through the use of IoT (Internet of Things) technology, which will make new types of smart devices available for public use. This means that the internet can be seamlessly accessed through a plethora of connected devices, rather than access points concentrated through Web 1.0 and 2.0 computers and smartphones.

    4.   Spatial Web 

Web 3.0 is sometimes referred to as ‘the Spatial Web’ as it blurs the boundaries between the physical world and the digital world. This is done by revolutionising graphics technology and incorporating virtual and augmented reality systems, allowing users to witness three-dimensions virtual spaces. 3D graphics and VR technology opens up new possibilities for immersion in industries such as gaming, real estate, health and social media.

    5.   Data Control and Ownership 

Another feature of Web 3.0 is that users will increasingly own their own data. Web 3.0 will be underpinned by decentralised data networks, which enable individuals to sell, trade or store data without relying on intermediary organisations. This means that users can decide who can access their data and how it can be used without losing ownership or risking their privacy. This is a departure from earlier models, in which consumer data is often stored, used or even sold to other entities without the consent of the user.

We can probably trace the mainstream beginnings of this new approach to personal data in the rules and ideas enshrined in the European GDPR, which are increasingly making their way into developed privacy law systems around the world.

Legal and Regulatory Considerations

In this article we have identified just a few of the many legal and regulatory issues to which Web 3.0 gives rise.

    1.   Censorship and Consumer Protection 

As content is hosted on a decentralised network of platforms, Web 3.0 will be much more resistant to censorship. This is because it would be difficult for any one entity to control all the platforms in a network. Web users will therefore have more freedom to express themselves and create content without fear of retribution, leading to a freer and more open internet.

However, this could also lead to regulatory challenges in protecting vulnerable elements of society, as it makes it more difficult to remove, regulate or sanction illegal content such as online harassment, hate speech and child abuse images. If data is controlled by individuals rather than large and notionally accountable corporations, it may be difficult to pinpoint the source of the illegal content and impose sanctions.

Further, because content can be hosted by anyone and anywhere in the world, traditional regulatory challenges about determining the jurisdiction in which a certain website is regulated may be exacerbated.

    2.   Privacy Concerns and Data Breaches

In Web 2.0, companies often collect and share large amounts of user data for the purpose of enhancing the experience of the user on a particular platform. Unfortunately, this method of data collection carries significant privacy risks. A foremost concern is the risk of data breaches; because companies are often in possession of large amounts of user data, there is a risk that data breaches could occur due to cyberattacks or negligence on the part of the organisation. High profile data breaches have been endemic in Web 2.0; the 2013 Yahoo data breach scandal alone impacted 3 billion user accounts. Another example is the Ashley Madison hack in 2015, which saw millions of users’ private information made public.

Web 3.0 aims to reduce the risk of these data breaches by enabling users to be sovereign over their own data. Blockchain technology allows users to control who has access to their data and what type of access they have, meaning that users can give and rescind access to their data at will. Data will belong to the user, rather than the platform the user is using. By giving users control in how their data is used and stored, Web 3.0 may help limit the risks associated having large corporations store, buy and sell personal data. Overall, this would have a tendency to enhance the security of the internet and make Web 3.0 more private and secure than its predecessors.

    3.   Smart Contracts

Smart contracts are digital contracts stored on a blockchain that are automatically executed when predetermined terms and conditions are met. They have increasingly been used in blockchain technology to facilitate transactions. For example, when two parties agree to an exchange of cryptocurrency, a smart contract is executed and stored on the blockchain ledger.

Smart contracts perform a slightly different role to traditional contracts: they guarantee technical enforceability rather than legal enforceability. However, some legal critics have argued that smart contracts ought to be considered legally binding instruments, and it is possible that the role of smart contracts will expand to encompass functions previously performed by traditional contracts. Given that smart contracts underpin most blockchain technology, increased reliance on these forms of contracts may potentially undermine existing legal frameworks regarding traditional contracts.

There is currently a lack of legal protection for when smart contracts go wrong. Unlike traditional contracts, smart contracts are susceptible to hacking and code exploitation, meaning that challenges could arise with contracts that have been digitally tampered with or hacked.

If smart contracts begin to displace traditional contracts in the digital sphere, this gives rise to questions regarding the enforceability, reliability and flexibility of smart contracts, and how these novel technologies will sit into the current legal and regulatory frameworks.

Concluding Thoughts

The advent of Web 3.0 gives rise to exciting new possibilities, as well as some fascinating legal and regulatory considerations. Regulators, businesses and consumers need to start rethinking how to handle cybersecurity and privacy issues through the lens of Web 3.0 to keep pace with the transforming digital landscape.

For other articles in our METAVERSE+ series, click here.

For advice on Web 3.0 and law in digital environments, please contact us below.


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