Lessons from Regulating Internet Commerce in the 90s: Do No Harm First
Hardly a day goes by without at least one story involving the major platforms of the current Web2 Internet era – Facebook, TikTok, Google, etc. – abuse their power, frustrate legislators and offend the very users who fuel their economic engines. Last month, laughable Instagram head tried to argue before the Senate Commerce Committee that Instagram improves the lives of teens, while internal documents leaked by the company show exactly the opposite. Fortunately, just across the Capitol in the House Financial Services Committee, we have tackled the promises and opportunities inherent in the next iteration of the Internet, and we have done so in a surprisingly open-minded, bipartisan, and productive way.
In many ways, the answer to the craziness of today’s digital world comes in the form of the next computer revolution, the web3, more commonly known as the crypto or blockchain revolution. Web3 disrupts the existing power and economic structures of the current era by putting power and control back in the hands of the very users who create value for new projects. This is exactly how the Internet should work in a free society. Rather than relying on an uncontrollable set of tech leaders or government bureaucrats to make decisions about what we see, who we interact with, and how much of our data is sold, the power in the Web3 world is fully distributed to everyone. stakeholders and is secured on the blockchain via governance tokens.
In today’s internet age, the overwhelming majority of business value goes to investors, founders and employees. It is virtually unheard of for major Web2 platforms, such as TikTok, to reward its users with actions in the company. It is even rarer for these companies to cede major decisions to the users of their platforms. On the contrary, for the sake of feeding off harmful content and misinformation, many platforms sell access to you and your family to the highest bidders.
Web3 reverses this model by putting governance and ownership in the hands of user communities who help power the projects themselves. While the incentive in web2 is for companies to extract as much value from their users as possible, in web3 the incentive is for users to provide as much value as possible to the project because the users themselves personally benefit from it. the value they provide.
This is particularly happening through a new governance structure called Decentralized Autonomous Organizations, or DAOs. DAOs are democratic organizations that govern many web3 projects. They provide the most direct way for a community of users to make critical decisions for an organization and participate in the economics of a project via redeemable governance tokens that allow holders to vote on key issues facing the organization. project is facing. This level of transparency and liquidity ensures that organizations cannot make important decisions without the consent of the community, but it also ensures that the community will participate meaningfully in the economy of the business as the value of tokens fluctuates. The magnitude of this shift in the balance of power cannot be overstated and is likely to lead to a series of innovations that we can hardly imagine today.
In other words, rather than organizations controlled by a CEO and board, DAOs will be controlled by their user communities. Rather than receiving nothing for spending time and energy on a new organization’s products, community members will have meaningful holdings in the organizations they support.
Another inherent characteristic of the technology is that web3 cannot really be shut down, no matter how hard the regulators try. The only real question is: which countries will have this future? Given the potentially enormous economic and societal benefits of technology, every lawmaker should want the United States to be home to the Web3. In the 1990s, the Clinton administration helped secure the technological dominance of the United States by adhering to a simple maxim: “Do no harm first.” Looking back, this mindset was a stroke of genius that allowed the internet to flourish and guaranteed American dominance along the way. We have to do it again.
Unfortunately, due to an uncertain regulatory environment and the overzealous comments of some policymakers in Washington Over the past few years, many of the most valued Web3 companies have moved overseas, where they can operate under a clearer legal structure. This would have been unheard of in previous versions of the web. Canada, Singapore and the Cayman Islands are new homes for some of the web3’s most important businesses today, not the United States.
Every day we waste not working to provide an environment for the innovation and risk-taking needed to win the future is another day a new project leaves our shores and fits elsewhere. It robs our economy of an industry growing at the speed of light and robs our next generation of digital pioneers of the opportunity to compete without fear of the global arm of the federal government. We can and must do better. It begins by drawing a critical lesson from our past.
First of all, do no harm.
Congressman Anthony GonzálezAnthony GonzalezGOP’s Rice Says He Regrets Jan. 6 Vote Against Biden Election Members of Congress Not Running for Re-election in 2022 The Clear Present Danger of Jim Jordan & Co. MORE proudly represents the Ohio 16e Piece. He sits on the House Financial Services Committee and the House Science, Space and Technology Committee.