Expert Take; Blockchain Specialist Philip Ingram on Web3 and the Challenges of Decentralization

Q&A wtih Philip Ingram on DAOs, Web3 standardization (or the lack thereof), and exactly how much FUD there is in the Web3 conversation.

• By John K. Waters, Gladys Rama
• 07/11/2022

Journalist, author and strategic planner Philip Ingram, MBE (Member of the Most Excellent Order of the British Empire), is a former British military intelligence, counterintelligence and security officer.

During his long career in the private sector, he has been responsible for security risk management at 42 organizations in more than 20 locations across Europe. He's the founder of U.K.-based Grey Hare Media, which develops content with journalists who are also former intelligence officers and security specialists. Ingram is a sought-after speaker, consultant, and business planner. We recently got the opportunity to ask him the following quetions:

ESJ: How are you characterizing this third generation of the World Wide Web?
Ingram: It's been billed as a revolution as far as where the Internet is going and how we're going to live. However, I'm slightly skeptical about it right now. At the moment. I'd say there's a lot of hype around Web3, and there's a relatively small number of people who have to get prepared for it. However, there are a lot of technologies that will come out and influence where we are with Web2-plus -- that bit between where the Internet is now and Web3. We're seeing that with cryptocurrencies, NFT's, and that sort of thing.

How do DAOs -- decentralized autonomous organizations -- fit into the emerging Web3 picture?
The DAOs are taking the central content coordination piece that organizations currently provide, and through which they own or share ownership of that content, and delivering it so that the content is being properly owned by the original creators. From a theoretical perspective, it's brilliant. And we see that with NFTs, the non-fungible tokens, or more appropriately non-fungible assets, which are a unique pieces of code held indelibly on a blockchain ledger, and which can be tracked and traced all the way through, so you know who owns it.

Are there risks with this kind of decentralization?
Are there risks involved? God, yes! The technology underpinning Web3 is expanding faster than a lot of the organizations that should be regulating it and the legal entities that should be providing oversight to ensure that there's a confidence in it can keep up. Criminals understand that and they are working their way into that gray space between the two and using that for their own nefarious purposes. Also, if you throw in an element of unregulated technology -- technology that's there to deliberately manipulate and steal the capability -- the threats and risks are extremely high.

Nonfungible tokens, better known as NFTs, and similar virtual properties are paid for largely with cryptocurrencies, which just experienced a significant crash or reversal. What's your view of that development and its impact on Web3?
I can't believe I'm about to say this with Bitcoin having just gone through the floor, but they're relatively stable, if not on a growth pattern, if you look at them from a longer-term perspective. Their value is significantly higher right now than it was two years ago. And in two years, it's going to be significantly higher than where it is today. These kinds of tokens -- and it seems like a new one comes out every day -- are built on elements that are part of Web3.

What is the current legal status of this type of property?
The legal status of a lot of this is only just starting to be defined. For example, a legal precedent has just been set in the U.K. courts that says [NFTs] should be treated as property. That means all of the property laws can come in, including property taxes. And similar legal precedents are likely to expand out across the rest of the globe. The organizations behind Web3 are going to have more knowledge about the people in there than ever before, and they'll have a tremendous amount of influence over those people. It's really quite concerning. There's not solid legal basis for what goes on inside the metaverse right now.

Are you optimistic that there's a universal standard for Web3 on the horizon?
If you look at how we've tried to regulate Web2 and cyberspace as-is at the moment, there is no regulation whatsoever. Countries tried to get together and come up with a series of rules to try and stop what we describe as cyber war, with virtually no success. But it is coming, and I think the U.K. is leading the way, where they are about to debate a new piece of legislation called the Online Harms Bill. I don't think it's been published yet in draft form, so I don't know exactly where the bill is going to go in terms of the metaverse, social media and Web3, but it's coming. And I believe it will have an influence and we'll see other countries considering how they might need to police online content.

And remember, every activity in this new Web3 environment is content. It has been created by humans, whether it's your avatar, whether it's a piece of property that you've coded, whether it's something else, it's been created by humans, so it's a content platform. And the companies [that own] the platforms are going to have to enforce a set of standards to keep from being prosecuted. So, it's coming, but we're not really keeping up with where technology is taking us at the moment.

Should companies be looking into hiring now for Web3?
I do think it's important that people start looking into that at the moment, because, as with any new technology -- especially when there's no big plan in place that everyone is working on -- it's always in the talents of those doing the coding. And there's going to be an enormous benefit in the spinoff technologies that come out as a result of this evolution. Using blockchain for authenticated trust, for example.

Should developers be ramping up their skills with Web3 in mind?
Definitely. They don't have to be in a panic, but they shouldn't be complacent. Demand for security skills is going to be high as we all migrate to this environment.

It seems like there's a fair amount of FUD -- fear, uncertainty, and doubt spread typically through media about a competitor -- when the topic is cryptocurrency. How much of the current discourse around Web3 is FUD? Oh, there is an awful lot of FUD around it, a lot of misinformation and disinformation deliberately going around, because people are trying to manipulate the markets, even though the markets haven't quite been created yet. And you can expect it to be around for a while.

So how do companies prepare for the coming of Web3 in such an environment?
There's an awful lot that still needs to happen, and the potential corporate risks of moving too early, especially reputational risks if you get something wrong, are huge. First and foremost, you need to get your brand presence in the virtual world right. If it's not aligned with your in real-world commercial values, you can do yourself a huge amount of harm. If I were advising a corporation right now, I'd say, prepare for it, focus on where it might be able to help your organization, but don't jump into it until you actually need it.