Tag Archives: metaverse

Web3 for Lawyers

In this article, we have a look at Web 3 for lawyers. We answer questions like “What is Web3?” and “What are the promised benefits of Web3?”. We look at the concerns about Web3 and at how Web3 and the Metaverse relate to each other. We also pay attention at the relevance of Web3 for lawyers.

What is Web3?

Web 3 (web3, web 3.0) is the name used for what could be the next version of the Internet. Proponents claim it will be based on concepts like decentralization and blockchain technologies. The Wikipedia also includes the concept of token-based economics as a third pillar of web 3. (Think of non-fungible tokens (NFTs) as an example of token-based economics. A future article will be dedicated to token-based economics. In the past, we have already published articles on blockchain and on how it is relevant for lawyers).

But why call it web3? To understand the name, we need to look at the history of the Internet. Before the Internet was accessible to the public in the form of the World Wide Web, there was ARPANET (sometimes referred to as DARPANET). Military strategists had come to the conclusion that centralizing strategic information on just one or some computer servers could leave one vulnerable. So, instead, they built a network of computers that were connected and that replicated crucial information. The information became decentralized. As long as one server remained up and running, essential information would remain accessible.

From this came the first incarnation of the public Internet, the world wide web, which was later also referred to as Web 1.0. It was the Internet of mainly static pages, where the users were in charge of the information they put online. In this setup, the information remained decentralized, where websites were on specific web servers. Then, slowly, we saw the rise of ‘Big Tech’. When social media arrived, they dramatically changed the Internet. Facebook, e.g., became like a privately owned Internet. In this new Internet, which people started referring to as Web 2.0, the information became centralized again in the hands of the Big Tech companies. Microsoft, Google (including YouTube), Meta (Facebook, Instagram, Whatsapp), and Amazon, e.g., are responsible for most of the traffic on the Internet. These companies have tremendous amounts of information on their users, and that information is centralized on their servers. More importantly, users no longer exclusively own what they put on these social media. The Big Tech companies are in control and can use that information. One of the things they do, is monetize this information about their users for marketing purposes, where these users typically do not share in the profits.

With the arrival of cryptocurrencies, the idea of Web 3.0 was born. The purpose of cryptocurrencies was mainly to break away from the power of centralized financial institutions. Similarly, the idea for web3 was to decentralize information and to put users in charge again of their own information, while maintaining their privacy. This would be done by cutting out the Big Tech middlemen and by using the same blockchain technology that had made cryptocurrencies possible. The idea appealed and led to the creation of the Web3 Foundation.

What are the promised benefits of Web3?

By now, billions have already been invested in Web 3 and the underlying technologies. People are enthusiastic because the promises and benefits it holds. Let us have a look at those.

Web 3 will give control back to the users and let the users monetize their information instead of Big Tech. In the article in Livewire, Jeremy Laukkonen writes, “It will represent a transition from big companies controlling and monetizing content on the internet to individual creators and consumers sharing content and interacting through decentralized networks.” NFTs are an example of this, where the creator of a digital artwork is able to sell some rights to his digital artwork. This is done by assigning a unique digital token to the piece of artwork, and all transactions with regard to this token are registered in a Blockchain ledger.

Web 3 will offer increased privacy-protection

If the information is no longer shared with Big Tech companies, users are back in control over their personal data. If you make digital artwork and sell it as NFTs, e.g., the buyer does not need to know anything about you. They just need to know that the token that refers to it is authentic.


With decentralization, the information gets distributed over the Internet again, instead of being in the hands of a handful of Big Tech companies. Dion Hinchcliffe, in ZD Net, describes decentralization as, “the notion that instead of large sections of the Internet being owned and controlled by centralized entities, ownership is instead distributed among its builders and users.”

Technological innovation

The technologies that form the basis for Web 3 already have changed the landscape of Internet technologies. Blockchain is a prime example of that. Web 3 comes with its own set of challenges (see below), and for some of those innovative technological solutions are being proposed. These include solutions to make the Internet more environmentally friendly and sustainable energy-wise. The link between web 3 and the Metaverse also is responsible for the innovations in visual communications, network speed, etc.

Opportunities for enterprises

Commentators identify seven key areas in which Web 3 creates new opportunities for enterprises:

  1. The Metaverse is often cited as an implementation of Web3 technologies, where all its virtual marketplaces rely on them.
  2. Distributed (or Decentralized) Autonomous Organizations (DAOs). “The concept of a DAO is embodied in a smart contract, with the rules posted for all to see. Tokens are issued, and stakeholders have a well-defined decision-making process. Essentially a new type of digital corporation, DAOs can be used in an enterprise context for everything from open innovation and investment to IP-based professional services or industry-scale consortiums.” (Dion Hinchcliffe).
  3. Web3 Apps
  4. Creator Economy for Web3
  5. Crypto & Digital Assets
  6. Blockchain and Distributed Ledger (DLT)
  7. Decentralization

(For more information on this, see the article on ZD Net listed below in the sources, on how decentralization and Web3 will impact the enterprise).

Other benefits

Some advocates of Web 3 also claim it will bring increased data security (because of encryption by default) and increased scalability.

Concerns about Web3

While many people are enthusiastic about the idea of Web 3, there also are some concerns that still must be addressed. A short overview:


As most countries by now have Internet-related legislation, the current Internet is largely regulated. That is not the case with web 3, which makes it extremely attractive to cybercriminals. In an environment that is not regulated, the risks of getting exposed to hacking, fraud, theft, harassment and bullying, the dissemination of harmful content like child abuse, unfair business practices, etc., are substantial. An unregulated Web3 is a paradise for criminals.

Environmental Impact

One of the biggest concerns about blockchain technology is its impact on the environment. Blockchain technology requires constant complex calculations that require an exorbitant amount of computing power, which in turn requires a lot of energy. An entire Internet running on Blockchain technology would have a detrimental impact on the environment. Thankfully, new technologies are already being developed that still use the idea of distributed, encrypted ledgers but that require far less computer power. Etherium, e.g., has just moved to such a new technology.


One of the advantages of a centralized network is that typically more attention is being paid to security. (That is why cloud-based solutions typically are safer than technologies that are run on site). In a decentralized Internet, the users become responsible again for security. And that can be problematic. Experience has taught that users still are the most fallible factor in any security solution. (At the moment of writing this article, a hacker made headlines after successfully hacking the Uber network. All he had to was to make one authorized user believe that he was a colleague who needed access).

In a decentralized setup, all the information is in the hands of the users again. Identity theft and identity fraud will be as rampant as it is today, and probably with worse effects for the users whose identities were compromised. In fact, a recent report confirmed that social engineering attacks are already dominating the Metaverse and Web 3.

And there is more. The Pentagon also investigated blockchain technology to see if it could be useful for them. Instead, their investigation found some concerning vulnerabilities on blockchain. Their report revealed that blockchain is neither decentralized nor updated. The market that uses blockchain registered transactions only has a handful of players and it is through them that most transactions take place. On top of that, the report found that it can take a long time for certain transactions to register. That leaves the possibility open for a cybercriminal to, e.g., make a blockchain purchase and then keep on selling the same item several times to different people for as long as the transactions aren’t registered.

Negative impact on innovation

Technological innovation is being touted as one of the benefits of Web 3. But there is another side to the coin. Research has shown that decentralization tends to slow down innovation and progress because it hampers technological standardization. It’s the traditional ‘too many cooks in the kitchen’ problem. E-mail is a classic example of decentralization. After 3 decades of the world wide web, there still are no standards for e-mail encryption. If you look at something like WhatsApp or Teams, which are centralized technologies, they had secure encryption by default, shortly after they were launched.

This slowing down of innovation is one of the main reasons many Big Tech companies are revising their position on working from home.

Other controversies

Several high-profile people within Big Tech are warning that Web 3 is more of a hype or marketing buzz than reality. More importantly, they point out that there won’t be much decentralization, as at present the investments in Web 3 start-ups are all being made by a small group of investment bankers. Instead of control over the Internet being centralized in the hands of just a few Big Tech companies, control over Web 3 would be in the hands of a small group of investors and venture capitalists.

Web 3 and the Metaverse

Web3 and the Metaverse are often mentioned in the same breath. Yet, they are not the same thing. The Metaverse has to do with immersive digital worlds that are typically experienced as a virtual or enhanced reality. Web3 has to do with new technologies and concepts like decentralization and token-based economics. There is a considerable overlap, of course: virtual marketplaces that are part of the Metaverse rely heavily on web3 technologies. But one of the main differences is who the proponents of each are. The Metaverse is being promoted by Big Tech companies who see it as a way of maintaining their control, while Web3 is being promoted by investors and venture capitalists who want to cash in on our digital lives.

The relevance of web3 for lawyers

A recent conference in Austin, Texas, concluded there are nine areas where web 3 and web 3 technologies are already relevant for lawyers.

  1. Copyright laws regarding non-fungible tokens, or NFTs
  2. virtual real estate – lease or buy
  3. virtual event planning
  4. cryptocurrency theft
  5. NFT due diligence
  6. prosecuting crimes in the metaverse
  7. starting or ending a business in the metaverse
  8. metaverse marriage and divorce
  9. web3 skip-tracing / due diligence

It is worth pointing out that there already is a need for blockchain and cryptocurrency lawyers, where the demand outweighs the offer. It should also be clear that having knowledge about Web3 and the Metaverse gives lawyers a competitive advantage.



What lawyers need to know about the metaverse

In the last few weeks, the metaverse has been in the news headlines on a nearly daily basis. Companies are investing billions in it and are looking to hire thousands of people to build it. In this article, we look at what lawyers need to know about the metaverse. It addresses the following questions: what is the metaverse, what can the metaverse be used for, what concerns have been raised about the metaverse, and how is the metaverse relevant for lawyers?

What is the metaverse?

Rather than starting off with an attempt at definition, it may be useful to first quickly go over the history of the idea or concept. The idea for the metaverse is the result of several technological evolutions that are converging. On the one hand, you have computer games that have created entire virtual online worlds that are becoming more and more life-like, and where people have avatars representing them to interact with others and the virtual environment. Another aspect is the increasing use of virtual reality and augmented reality tools in real life for different purposes like training, education, etc. Think, e.g., of a surgeon or medical students practicing a medical procedure. The pandemic has also created new needs for virtual meetings and conferences and has sped up the process of courts going online. All of these tools rely on the Internet. So, the vision rose to enhance the internet in a way that all these technologies could be combined in one parallel virtual / augmented online world where we can live, work, learn, relax, play, socialize, etc.

There is no commonly accepted definition for the metaverse yet. (There even are alternative names for it like, e.g., the omniverse). The Wikipedia, e.g., gives the following definition: “The metaverse (a portmanteau of “meta-” and “universe” or “Universe” and “Meta”) is the hypothesized next iteration of the internet, supporting decentralized, persistent online 3-D virtual environments.” This Wikipedia definition, however, is limited in its scope. These are some of the other aspects that leaders in the field are using to describe it: “a virtual world connecting all sorts of digital environments”, with “social human interaction at its core”; “a vision for a new place to interact with other humans and bots to play games, conduct business, socialize and shop”; “a fully immersive, partially real life, partially digital experience that runs in parallel with the physical world”; “a vast and immersive digital world that is inexorably enmeshed with our physical world”.

This new online world would, just like the Internet, always be on and accessible. At present, accessing such world requires the usage of virtual reality sets or augmented reality glasses, as well as smartphones, PCs, or game consoles. For the metaverse to become a success, investors and developers realise that they must make it more easily accessible, and that interoperability between metaverse applications is essential.

What can the metaverse be used for? Examples of current and future applications.

The early stages of the metaverse already exist. There are, e.g., well-defined use cases within the video game, business, education, retail, and real-estate sectors.

We already gave the examples of games that are being played in entire online worlds, and where millions of players can simultaneously interact with each other and the environment.

Anybody who worked from home during the pandemic undoubtedly is familiar with virtual business meetings. Many also became familiar with online training.

The same goes for education where classes were suddenly taught online instead of in class rooms or auditoria. In some cases, students can use virtual reality headset to learn to manipulate 3D virtual objects, etc.

There are virtual shops that you can walk around in to choose what you want to buy. Similarly, people looking to buy a house can take a virtual tour to determine whether it is worth visiting the actual house. Developers use 3D models of the projects they want to build and put them online for potential buyers and investors.

There already are early metaverse applications for sports and entertainment and for healthcare. During the pandemic there were live concerts that could be attended virtually, where the musicians physically were in different locations, all playing together.

All of this already exists and would be enhanced further. In the future metaverse, people and companies would have their virtual offices. The online shopping experience would dramatically change, too, where virtual shops become far more lifelike. You could have your avatar customised to match the way you look at present and, e.g., try on clothes in the virtual shop before ordering them.

Movies could become 3D environments where you can look around and have a 360-degree view of what is going on. Family reunions and gatherings could take place in virtual environments so those who cannot physically be present, can still attend.

The possibilities look endless.

What concerns have been raised about the metaverse?

While many of these evolutions are thing people can get excited about, there also are plenty of reasons for concerns. Here are a few.

Privacy: big tech companies like Google and Facebook already have a bad reputation when it comes to all the data they gather. Many privacy advocates rightfully point out that the situation could get far worse in the metaverse, especially if it is being run by the same or just a few companies.

There is a cluster of interlinked concerns that has to do with the spread of misinformation, alienation from real life through confirmation bias, and the resulting polarization of society. What are we talking about? In recent years, we have witnessed how social media have been abused to spread misinformation, either intentionally or unintentionally. There already is a problem where the algorithms used in social media are designed to provide you with the information you are interested in, which strengthens the phenomenon of confirmation bias. The algorithm does not care whether what it shows you is true; it is interested in showing you want you want to read. If you hold beliefs that are not true, the algorithms will show you information that confirms those beliefs. In other words, the metaverse may further distort users’ perceptions of reality with biased content to keep them engaged. This can lead to an alienation from what is real, and further contributes to an ongoing polarization of society.

Another problem has to do with online addiction. There have been many well-documented cases where people develop online addictions. With a metaverse that becomes more lifelike and more all-encompassing, an increase in addictions is anticipated.

Another set of concerns has legal implications. Who is in control of the metaverse? Who makes the rules and what rules apply? How are laws applied in virtual worlds? Can insults or threats in a virtual environment have real life repercussions? What if the threats are about the avatars, like somebody threatening to disfigure or destroy your avatar, or somebody replacing your avatar with a less desirable one? There also are concerns about monopolies or oligarchies where some tech companies rule and control everything. Many lawmakers already have expressed concerns about the power big tech companies currently have. In the metaverse, that could get worse. What we are witnessing now are the early stages of a battle over who will control the metaverse.

There are criticisms that the metaverse companies are trying to lure in investors with what is at present merely a purely speculative, and over-hyped concept based on existing technology. They are accused of misrepresenting the largest limitation for wide-scale adoption of the metaverse, which comes from technological limitations with current devices and sensors needed to interact with real-time virtual environments.

And undoubtedly, the metaverse will introduce whole new sets of problems, which will raise new ethical and legal questions. There already is a company that sells tailor-made human digital servants. What about digital slavery and prostitution? What about virtual affairs? One problem that is often mentioned is that of currencies: will you be able to use existing ones, or will new ones be created? Will these virtual currencies be usable in the real world (as in, have purchasing power) or will those be limited to specific environments and providers? Many new solutions will have to be found.

How is the metaverse relevant for lawyers?

In a previous article, we talked about the two sides of legal innovation: one side has to do with adopting new technologies for better legal service delivery; the other side has to do with coming up with new legal solutions for new situations. Both aspects apply to the metaverse.

We already mentioned above that there are multiple concerns about the legal aspects of the metaverse. What existing rules can be applied and what new rules are needed? What new solutions do we have to come up with to deal with the abovementioned concerns? Will the metaverse create a whole series of new crimes? All of these are new problems that will need new legal solutions. And hopefully, we will learn from the mistakes that were made with the Internet, where legislation and jurisprudence were lagging far behind in addressing the new problems that arose. If not, the gap between new problems and the needed legal solutions to address them will be even bigger for metaverse.

The other side of the relevance for lawyers is how it will affect the daily operation of law firms. The metaverse with its new technologies will change the way lawyers work. We can expect an increase in and enhancement of virtual offices, where receptionists and paralegals could be bots or avatars of real people. We will see new virtual courtrooms, virtual arbitration, etc. During litigation, experts and lawyers could provide 3D recreations and presentations of their arguments and findings…

In short, the metaverse is expected to open up a whole new world of possibilities, concerns, and issues.