Web3 is set to revolutionize how we interact online by having the potential to reshape the basis of social interactions. It essentially challenges the traditional, centralized models of the internet we’re familiar with by enabling decentralized platforms where users own their digital environments. It puts power in the hands of individuals by allowing a permissionless and trustless internet that no one monopolizes.

In the current infrastructure of the internet, the centralization of digital interactions through Web 2.0 has given a dominant space to tech giants. These include Facebook, Instagram, Twitter, etc. who control the data and decide the limitations of users online. Users have been given a limited say in the usage of their data as these big tech companies control the policies, and have access to endless people’s data.

The concept of Web 3 diminishes that control and gives it back to users. The future of digital interactions can be changed, powered by Web 3 technologies. These technologies promote shared ownership, incentivized participation, and enforceable rules. The idea of Web 3 is an all-encompassing concept to improve the internet through cryptocurrency, bitcoin, and NFTs. Users will have far more control over their online presence without any reliance on third parties.

This article explores the technical angles of decentralized interactions’ protocols, tiers of decentralization, and will aim to establish an evaluation criteria for a sufficient and acceptable level of it.

Understanding Web3 and Decentralized Social Interactions

So far, we’ve established that Web 3 is the face of evolution on the internet and will lead the transition from Web 2.0 to decentralized interactions. It will use blockchain technology to create systems where data is distributed across a network of computers. The interactions in Web 3 will be secured by the following features:

• Blockchain - a decentralized ledger that records interactions or transactions in a way that doesn't allow others to tamper with it.

• Peer-to-Peer Networking - There are no governing intermediaries between users, and they can instead interact directly with one another.

• Cryptographic Proof - Verifications that a message hasn't been tampered with, hence ensuring the authenticity of interactions.

• Smart Contracts - these are scripts that automate the interactions between two parties. Once specific conditions are met, these contracts will execute actions without needing any intermediaries.

Difference From Web 2.0

The most fundamental difference is user autonomy and ownership. Web 2.0 comprises centralized servers that are owned by large corporations that set the rules and policies of a vast amount of user data.

In Web 3, this gatekeeping no longer exists, and consumers are active participants who own a stake in the platform they use. A greater amount of transparency and privacy will be allowed in Web 3.

This user governance model is controlled through token-based governance models. Platforms like Mastodon and SocialFi give users a direct stake in the platform’s operations.

Core Pillars of Decentralized Interactions

Here are some of the critical layers and components of the Web 3 technology stack that play fundamental characters.

1. Shared Ownership

As mentioned above, a token-based system of governance will allow each individual to control and dictate their online presence, This is the concept of shared ownership rather than third-party governance. To enable this system, the backbone of Web 3, blockchain is used.

In blockchain technology, all the transactions are recorded in a shared ledger which isn’t controlled by any central authority.

They’re crucial to Web 3 because they provide secure environments that allow for the distribution, creation, and trading of cryptocurrencies. Blockchains are the ‘settlement layer’ of Web 3, by allowing the development of smart contracts.

2. Incentivised Participation

An incentive for participation given to users is a digital token-based system. This reward mechanism encourages users to actively participate and receive compensation for it. These are digital units of value, and they serve more than just as a medium of exchange. These rewards can be earned through content creation, curation, and participation in governance decisions.

3. Contract Enforceable Rules

The concept of smart contracts mentioned above allows for tamper-free contracts that ensure security and transparency. These programmable contracts allow the creation of decentralized apps that are powered by the decentralized infrastructure of blockchain networks.

Evaluating Decentralized Interactions

It’s important to understand whether an interaction is sufficiently decentralized, and this requires setting specific criteria.

1. Degree of Control

It has to be understood what level of control an individual user has. Are there still central authorities directing decisions, or are people involved in governance? Complete decentralization can only be achieved if governance is managed by the community through token-based voting or decentralized autonomous organizations.

2. Ownership of Data

Staying true to the idea of Web 3, in decentralized interactions, the ownership of a user’s data should stay confined to that specific user. Their private information should not be up for grabs in the market, and they would have complete direction over what it can be used for.

3. Trust Mechanisms

In decentralized interactions, trust isn’t dependent upon the credibility of third parties. Instead, it is characterized by the technology itself. Through blockchains and smart contracts, a trustless system ensures absolute reliability.

Tiers of Decentralization

Decentralization exists on a spectrum with varying extents of user control and system autonomy. These tiers include:

• Tier 1/ Partial Decentralization - In this model, users own most of their data and make some decisions but the platform retains central authority over governance. This would mean platforms use decentralized data storage while maintaining centralized decision-making.

• Tier 2/ Mixed Models - This is a blend of centralized and decentralized elements. The platform would operate on decentralized governance while the infrastructure is controlled by a central authority. It’s done to balance efficiency and autonomy.

• Tier 3/ Fully Decentralized - This is apt to what we have been discussing; a completely distributed network where participants actively engage in the platform’s governance and decision-making.

Boundaries and Limitations

There are a lot of real-world platforms that demonstrate decentralization at varying levels. Some of these platforms operate based on decentralized finance models where users can buy or lend cryptocurrencies through smart contracts.

Whereas others operate similarly to a social media model, but users have full control over their data. The degree to which platforms and the internet can be decentralized is affected by some hurdles and technical obstacles.

Technical Barriers

While the advent of Web 3 comes with various different advantages, there are certain technical barriers that can limit its implementation. These technical barriers include:

• Scalability - Many decentralized platforms face the problem of growing and scaling to handle millions of users, as blockchain transactions can be slower compared to centralized platforms. Centralized platforms can process transactions much faster, enabling real-time responses.

• Governance Issues - The platform’s progress could be slowed down because of decision-making inefficiencies caused by disagreements between users. If a consensus can’t be easily achieved, the inefficiencies in Web 3 will increase significantly, since decisions are made by DAOs or the community.

• User Adoption - The concept of blockchain technology and its principles are still very new to several users. Its complexity can act as a potential barrier to user adoption. For instance, managing private keys and understanding smart contracts could be challenging for several users, making them resistant to Web 3’s usage.

Legal Boundaries

The surge of decentralized platforms in Web 3 introduces a new variety of legal and regulatory challenges that have to be sufficiently addressed. These challenges exist because the current laws are made to complement centralized systems.

• Data Privacy Regulations - These regulations in different countries such as GDPR in Europe or CCPA in California state that companies need to ensure the protection and control of users’ personal data. Of course, that isn’t applicable to decentralized platforms in web3 because its entire basis is that data is distributed across various networks. Therefore, compliance with such laws isn’t possible while maintaining the vision of Web 3.

• Jurisdictional Complexities - Blockchain networks are global and do not rely on a certain country or area’s central authority. This makes the applicability of laws difficult to determine. Since different countries could impose conflicting regulations, the enforceability of laws on a decentralized system is a big hurdle. Financial regulations that are easily applied in centralized systems through a single point of contact can’t be easily complied with by blockchain networks. These regulations include Anti Money Laundering (AML) or Know your Customer (KYC) requirements.

• Intellectual Property Rights - Since ownership is so widely distributed when it comes to content creation in Web 3, the problem of rights and control over certain content poses itself as a serious challenge. As legal frameworks catch up with decentralized needs, regulatory bodies ask for more oversight, which limits the potential growth of decentralized systems in its essence.

• Accountability - If ownership isn’t clear, then assigning accountability in a decentralized system can be very challenging. The traditional regulatory methods aren’t applicable in this case, and holding decentralized organizations accountable for their actions could be a challenge.

The precedents set by legal cases regarding decentralization have begun to shape the future of behaviors and rules that will govern Web 3. This situation begs the question of whether precedents may become too stringent and controlling over time, leading to clashes with Web 3’s vision.

What’s the Way Forward?

The greatest question posed from the discussion above is if regulations were to be imposed, to what degree should they be imposed? How stringent do they need to be? Will interactions still be decentralized and meet the above criteria?

This begs for an open dialogue among major stakeholders that considers all aspects of the discussion. Early regulations may better assist in understanding the balance that needs to be struck between over-regulation and under-regulation. Moreover, task forces could be made to educate regulators in accordance with the requirements of Web 3. Another solution to begin this is the designing of interaction protocols.

This protocol will dictate how users should interact with one another on a decentralized platform. This would comprise smart contracts, token economies, and governance frameworks. An interaction tree could also be used to map the relationship between users, decisions, and rules. A focus on how smart contracts govern social interactions should be done in order to understand this better.

Conclusion

In conclusion, the decentralized system of Web 3 holds the power to re-direct control into the hands of the users. However, this control needs to stay within the limits of best industry practices, which will take time to build in this case. No matter how decentralized interactions become, organizations and networks still owe users and the wider community a responsibility of protection, accountability, and good governance practices.

A proactive approach to understanding and complying with laws is still a necessity, and until each factor is thoroughly reviewed, this can’t be achieved. In some cases, a balance between decentralization and centralization may be necessary. While decentralization introduces new technical challenges and boundaries, it holds the potential to reshape digital interactions in ways that produce more equitable and transparent systems.