Web3, Europe, and the role of technology in democracy’s future

, by Hugo de Choisy

Web3, Europe, and the role of technology in democracy's future
Credit: DeltaWorks, Pixabay

We all know that the democratisation of the European Union system is a bit of the elephant in the room for Eurocrats, even for Europhiles. As Antoine Vauchez, a French political researcher, puts it, the EU may have an assembly, members of parliament, and electoral meetings, but it is still going through a deep democratic crisis. For decades, the gap between Europe and its citizens has been widening. The national leaders have ended up abandoning some of their room for manoeuvre to independent and unelected institutions: the Commission, the Court of Justice, or the European Central Bank. Even if this system shows benefits through strong stability and continuity by being composed of expert bureaucrats, it nonetheless goes with a certain lack of democratic representation within the EU. This issue is a crucial one to tackle for the Europeans, as it explains the very poor turnout rate for the European elections (only 50% of Europeans cast a ballot in 2019), especially among young people in Europe.

Now that this has been said, what can we do? What tools do we have in our hands to make things better, more engaging, more tangible: in a word, more democratic? It appears that the big thing currently hitting the tech and the economic market could bring an interesting answer to our frozen European democratic system. To understand why, we must go for a quick trip back in time.

Web3 and the libertarian dream

It is in 1989 at the CERN, a European research organisation that the now-called Web1 was born (the Web as we know is a European invention!). It was read-only, with links that took you to other pages. Web2, as it was called in 1999, introduced interactivity and content production such as social media, online banking and video streaming services. While being easy to use, its users are the ones who created value with their data, as were creators, but the companies that dominate the Internet are the ones that take the lion’s share economically, the ones that monetise it.

That is why some people (initiated by the mysterious Satoshi Nakamoto and its Bitcoin) decided to counter this big tech company monopoly by developing a new version of the Web. The idea behind Web3 is to give full freedom back to Web users instead of big tech companies. This ideology implies the decentralisation of data and the reappropriation by Internet users of their digital identity. This explains why many observers call the emergence of Web3 the ‘libertarian dream’. With Web 3.0, data is no longer centralised on servers belonging to companies. It is stocked on decentralised networks called blockchains and held by a community to which the user belongs. In simple terms, the computers in the community are all servers and, thanks to this, the users control their data and the services on which they navigate.

Europeanising Web3

From there, you can understand where we could go. We all know how much the emergence of the Web2 tools fundamentally changed the political landscape: Facebook, Twitter, and all the other platforms of social interactions became a privileged scene for all the political actors, voters, and media to share their views, communicate, and to spread their ideas. Everybody acknowledged the huge democratic benefits of such progress, from easing public gatherings (as we saw during the Arab Spring in 2011), to making debate between citizens more reachable. But time (and Russia) showed us how much these tools could backfire on democratic countries and spread fake news. We must understand now how Web3 could help revitalise tired European democracies.

Well, for a simple reason, and a crucial one: transparency. Web3 and blockchains can host permanent, unalterable records that can increase transparency and accountability between government, citizens, and civil society, which as we mentioned earlier, the EU lacks greatly as an administrative entity. While laudable caution in the public sector over the novelty of blockchain technology has limited widespread use to date, the pieces are now in place for blockchain-based technology to play a useful role in reimagining government and civil society.

Web3 and blockchain technology could offer the EU the means to work towards recognising, respecting and addressing human rights challenges. In early 2022, the European Commission proposed a Regulation on harmonised rules on fair access to and use of data (Data Act). The Data Act is a key pillar of the European strategy for data. Its main objective is to make Europe a leader in the data economy by harnessing the potential of the ever-increasing amount of industrial data, to benefit the European economy and society. Using Web3 could align with this European strategy by helping the democratisation process of data in Europe: No better technology than blockchain has the same game-changing potential as blockchain on this front. Blockchains can offer alternative solutions for data management, as they allow data to be shared in a transparent and decentralised way. Above all, blockchain technology can give Europeans more control over the sharing of their data while ensuring the portability of this data.

Managing digital identities

Web3 could then help the European authorities and governments to regain stronger sovereignty over the digital identities of its citizens. In the virtual world, ‘trusted third parties’ have the power to define the methods of identification of a person, to assign an ‘identifier’ to that person and to secure their identification using credentials (e.g. email, passwords, code, various information). Often these identification services are offered by large technology companies (e.g. Apple, Google, Facebook) that can provide reliable and secure identification services. However, the use of these ‘trusted third parties’ raises a lot of issues for European public authorities, as it makes users dependent on large private platforms that control accounts and can arbitrarily cut off their access to online services. In addition, users are required to share a large amount of personal information, without always knowing what use their data will be put to.

In this context, Web3 technologies could allow European citizens to escape the control of the GAFAM in the tech sector. Decentralised structures allow for the development of new models of digital identity management in which users retain control over their identity, known as ’Self-Sovereign Identity’ (SSI). It is sometimes said that SSI could even compete with the current monopoly of state-assigned identities. While this may seem like an exaggeration, an SSI system can compensate for the absence of state-issued identity documents, either because they have been lost or destroyed, or simply because the state in question has not provided them. It could also be useful in cases where the identity document is not recognised by a State, for example in the case of diplomatic disputes. If it is unlikely that decentralised identity systems will make it possible to dispense entirely with the role of States in certifying the identity of individuals, the use of blockchain-based digital identity solutions can help all those who do not have official documents, either because they have never had them, or because they have been provided with false documents (as is often the case for migrants), or because their official documents have been destroyed or lost.

Revitalising democracy

The most obvious case of Web3 and its accompanying software tools helping to improve democracy (and also the one that creates the most fantasy in visions for the future) is the electoral one. Indeed, Web3 could provide European states with the functionality to conduct elections more securely and transparently, guaranteeing the authenticity of every vote cast and ensuring that the vote count is accurate. Moving to a blockchain-based voting system could help prevent electoral fraud, as blockchains are encrypted, decentralised and incorruptible. Such a system could not be corrupted by an external entity, as the registry would not exist in one place. Furthermore, on a blockchain, signatures could be collected and recorded digitally in an immutable way, further reducing the possibility of fraud. This is welcome at a time where across Europe, satisfaction with democracy is mixed. Progressively introducing a new way to apprehend the democratic process and the popular vote could revitalise a tiring system. Indeed, according to a study led by the Pew Research Center, a think tank and poll centre, if some European countries like Sweden, the Netherlands, Poland and Germany are satisfied with the state of democracy in their country (72%, 68%, 66% and 65%, respectively), many others are by contrast dissatisfied with how their democracy is functioning. It is the case for Greece, the UK, Italy, Spain, and France, where people are also more dissatisfied with democracy in their country than satisfied.

But we could even go further. Such decentralised tools would not only enable voting for political parties but also greater participation in the legislative process. We know that most European citizens feel a distance between them and the legislative processes, either European or national. We could think of an official blockchain-based application, based on a unique identification number that each voter and taxpayer receives from the state, that would allow citizens to officially express their support for bills and proposals. Web3 could thus help meet the strong demand for more effective participation of citizens in public life. A similar concept flourished in Brazil in 2016: the Institute for Technology and Society in Rio de Janeiro (ITS Rio) developed a similar application called Mudamos. Two months after its launch, 600,000 people had downloaded Mudamos, and 7,000 legislative proposals have been received to date.

Rearming European digital sovereignty (and democracy)

Many questions remain about the lack of regulation, few established use cases, high computational energy demands to maintain a blockchain network, and limited technical talent – particularly familiar with utilising the tool in the civic space. We also know that over these past few years, the EU aimed to champion its market rivals (especially the US) regarding tech regulations. This must continue. As with any new technology, there are risks with Web3 that must be managed. Any hastily implemented technology can erode democratic institutions in unexpected ways. When considering it, European policymakers need to understand where and under what conditions blockchain could be considered in democratic processes to avoid unforeseen negative repercussions and to protect human rights and civil liberties. Blockchain is an emerging technology and the field is changing rapidly; we encourage readers to conduct their research and move thoughtfully as they pursue blockchain-powered solutions.

However, the potential of Web3 must be encouraged before being overwhelmed by EU regulations. Web3 can be fully aligned with current European goals: this form of technology could empower Europe by gaining more technological sovereignty, its ability to develop and retain critical homegrown technologies, a prerequisite to meet the bloc’s other strategic goals such as its climate change targets and defence needs. This became a vocal wish from most of the European policymakers: “There is no longer any political sovereignty without technological sovereignty,” French economy minister Bruno Le Maire said in 2022, calling for “a European technological awakening”. Web3 tools could provide Europeans with tools to strengthen their data, technological, and cyber sovereignty, which would in fine strengthen their democratic systems.

The European authorities are not immune to Web3 and decentralisation: a digital euro project has been launched in 2021 by the European Central Bank, in the form of a Central Bank Digital Currency (CBDC). Such a project would aim to transform the euro as we know it into a digital asset on the blockchain, strengthen the monetary sovereignty of the eurozone (to the detriment of the banks) and make it more accessible to all sections of the population, including those who do not have banks. The work has started and the time is now for the European authorities and governments not only to acknowledge the potential of Web3 (most of the developed world already did that years ago) but to actively build over it to use its full potential. It happens that our democracies could benefit from it.

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