Decentralized Web3 platforms are evolving at a lightning speed introducing new business opportunities. Web3 platforms have made a mark amongst various industries.
Just to know, crypto activities based on Web3 witnessed a growth of approximately 800% in Asia. Asia received $572 Billion USD in the financial year 2021. To add a feather, decentralized platforms and blockchain games witnessed a rocket push of 2000% in 2021-22.
However, with advanced automation tech comes wide room for legal complications. No matter how interestingly Web3 platforms and its services are growing, they’ll surely introduce certain challenges in the near future.
For a better understanding of Web3 platforms and its challenges to the legal industry, let’s dive in deep.
#1. Regulatory Compliance
Earlier when platforms were centralized it was easy for legal regulatory bodies to keep an eye on every action. But Web3 has introduced the world to decentralized platforms where there’s no single point of control.
This creates a wall for the regulatory bodies to enforce laws on Web3 decentralized platforms. The US Securities and Exchange Commision (SEC) keeps a constant eye on the Initial Coin Offering (ICO), which are used to raise funds for the decentralized platforms.
#2. Intellectual Property Rights
Web3 platforms breathe in open grounds making it difficult for legal authorities to protect intellectual rights. Imagine buying property in a city with no government regulations. Now someone comes and poses his ownership on your property. Who will you reach out to!
This scenario can come to life when considering decentralized apps and Web 3 platforms. Web3 platforms introduce great opportunities, however, with that it also allows a person with knowledge to play evil.
#3. Smart Contracts & Web3 Decentralized Platforms
Decentralized platforms work extensively on smart contracts. Smart Contracts are basic agreements with predefined rules, and once the conditions are met, the agreement marks complete. If smart contracts can automate and streamline transactions, they surely have a space for legal challenges.
Once a smart contract is defined nothing can make a change to it. Now think, while defining the terms some mishap takes place. What blunder it can do, financially and legally.
#4. Data Protection
What was the last scam you know that happened in the crypto market, blockchain, or metaverse? These terms may sound obsolete for lawyers but it can create havoc in the legal world. Or I must say major disruptions in the legal world. This certainly creates a space complying with data protection regulations.
#5. Cross-Border Jurisdiction
Web3 is accessible from anywhere in the world. This creates a huge gap for professionals in the legal industry in cross-border jurisdictions. Say, a case happens between users in two different countries, it gets difficult to understand what legal regulations will be carried out. Also, this makes it challenging for government regulatory bodies to hold the bad actors in the case.
Can Web3 Platforms Offer Starry Opportunities to the Legal World?
Web3 tech and decentralized platforms are capable enough to generate opportunities and legal challenges at the same time. Embracing Web3 platforms and services is fine until it gets tricky for the legal professionals to keep an eye on it. Who knows, a few years down the line, Web3 can offer legal professionals a space to create opportunities worth millions.