Web 3.0 Seen as New Way Forward for Domain Names but Not Risk-Free

As interest grows in Web 3.0, blockchain domain names are increasingly seen as a key service, experts told us. Blockchain domains have been around for several years (see 1810040002) but the idea of a decentralized system that could fix many of the problems with the current web brought them into sharper focus. Web 3.0 fans say it could, among other benefits, improve domain security and offer additional services the ICANN domain name system (DNS) can't. Skeptics say blockchain domains could hamper law enforcement and intellectual property rights, and they raise interoperability and inefficiency issues.

Web 1.0 began as a centralized system mostly controlled by governments, but once commercialized, it turned into one in which no single party owned or managed all the services that made up its network, emailed BakerHostetler attorney Veronica Reynolds, who handles blockchain and other emerging issues. As the web transitioned to Web 2.0 with the rise of social networks, social and economic power in the form of data collection and algorithm power "became seriously concentrated among large-scale corporate conglomerates and access to this power restricted by gatekeepers," she said. Web 3.0 "is inherently collaborative," letting individual users rather than just companies contribute to the development, management and monetization of the internet's infrastructure.

"Blockchain domains are absolutely a part of Web 3.0," Reynolds noted. Although ICANN is a nonprofit legally obligated to serve the public good, that it manages a substantial majority of the DNS means its power is centralized, making the entire DNS vulnerable to security breaches. Blockchain domains, however, are "stored within a distributed ledger maintained across a network of computers and controlled by the user," Reynolds said: That boosts security, purportedly making such domains less vulnerable to threats, but also making it harder to shut them down in cases where there's a lawful basis to do so.

The Web 3.0 project aims to solve many of the problems centralized systems created, said Danny O'Brien, Filecoin Foundation for the Decentralized Web senior fellow. In the past 10 years, a handful of companies has gotten control of different sectors of the internet, and it's not just Facebook, Twitter and others that dominate users' experience, but also domain name servers and the DNS itself.

The question now is: What's the compelling thing about the DNS, and can we live in a world that's slightly more distributed, with multiple, competing DNSs? O'Brien asked. What Web 3.0 might do is create a system that provides additional answers or services the DNS can't. For example, Filecoin's system is designed to be a decentralized alternative to the web, allowing it to add services like storage websites. Ethereum domains are resolvable in the DNS but offer something more than just a name, such as a crypto-wallet that points to a verifiable identification.

Will Web 3.0 resolve the Whois debate? Its proponents "often promote decentralization of data collection and storage because in theory this grants power to the user over their own data (allowing users to selectively grant access to their data for specified purposes)," Reynolds wrote. In addition, the decentralized storage of personal data means there's no neutral intermediary managing the data. Thus, the infrastructure of Web 3.0 is "inherently aligned with the public policy that underpins more privacy laws in that it limits the commercialization of data by centralized third parties and grants individuals much more control over their data," she said.

"Most of the legal issues around domain names are about trademark and property rights," emailed Kevin Werbach, a University of Pennsylvania Wharton School professor-legal studies and business ethics. "It will be a challenge to recreate those dispute resolution processes effectively for decentralized DNS." The bigger challenge, he said, is law enforcement. There are processes now by which governments can seize domain names of illicit entities, but one goal of blockchain-based domains is to make the domain name system censorship-resistant, which could hamper shutting down illegal sites, he said.

No matter what Web 3.0 does, it will have to have a naming/addressing system, emailed Lili Chen of the Boston Blockchain Association. Most of the blockchain projects are built in different blockchain protocols, so the ecosystem "is facing the cross-chain interoperability problem."

Web 3.0 seems to be based on distributed apps running on top of different blockchains, blogged Mark Datysgeld, a Business Constituency member of ICANN's Generic Names Supporting Organization Council. One potential idea is to create decentralized social media platforms allowing users to carry out censorship-free interactions. The implications of social networks running under such a model should be clear, he said: Combining the anonymity currently afforded by darknets with the permanence of a blockchain would likely deepen the problems of illegal websites.

Blockchains are also inherently inefficient and Web 3.0 by definition pricier, slower and more resource-intensive than the current model, said Datysgeld. Web 3.0 doesn't offer anything to the average user that can't be achieved now by exerting pressure over dominant companies, he said: "There is no need to turn the Internet into an unaccountable mess to make it better."