Author name: @nobumei (https://twitter.com/nobu_mei)
<aside> 💡 This page describes the challenges that stand in the way of the transition to Web 3.0.
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This is finally the last chapter. I hope that the previous contents have given you at least a rough understanding of the world and philosophy of Web 3.0. I think that I have conveyed only the good parts of Web 3.0, but please note that I myself am a Web 3.0 enthusiast, so my explanations may be a bit positional.
Since it is impossible to make an accurate judgment if I tell you only the positive aspects, I will conclude this chapter by describing some of the problems, risks, and common criticisms that the transition to Web 3.0 will cause.
The Web 3.0 market has just been born and is riddled with challenges.
Let's look at these issues one by one.
Web 3.0 is a decentralized revolution that starts from the bottom up, trying to overthrow centralized power. The largest threat to Web 3.0 will be the power of government to block its spread. While UI/UX and user literacy issues are problems that time will solve, issues related to regulations and laws cannot be solved with time.
For example, China issued a Bitcoin ban in June 2021. China had been the world's largest Bitcoin mining power until then, but this regulation wiped out all domestic operators in China, causing a bear market in mid-2021.
China's "blockchain is OK, but cryptocurrency is prohibited" stance makes it difficult for Web 3.0 projects to move forward due to government regulations. Since regulations vary from country to country, this section introduces regulations that have a significant impact on the Web 3.0 industry.
The FATF travel rule is a regulation regarding the transfer of cryptocurrency.
The FATF is an international organization established in 1989 to establish rules for money laundering and counter-terrorism funds. The regulatory recommendations issued by the FATF are called the Travel Rules, and countries will be forced to comply with them.
Cryptocurrencies are characterized by the ability to transfer money "anonymously," but when trying to make payments in the real world, they must be converted to legal tender somewhere. The FATF's strategy aims to prevent major crimes by obtaining personal information at cryptocurrency exchanges when converting to legal tender and revealing the "exit" of who withdrew how much money.
If a Japanese person were to send money from a Japanese exchange to an overseas exchange and convert it to dollars, the exchanges have established a mechanism to share and identify personal information among themselves if there is a problem with this transaction. This is why cryptocurrency exchanges have strict KYC (personal identification) mechanisms, and since the FATF regularly evaluates each country's ability to perform them, they must be performed by the entire nation.