Opinion: Decentralized identity is expected to solve the everlasting dilemma of data privacy and data utility
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In 2021, the global decentralized identity market’s size reached 178.8 Million USD. The market size forecast of this industry sector will grow to over 8.9 billion USD in 2028. Recently, Ethereum creator Vitalik Buterin proposed a Soulbound token standard where ‘identity objects’ is attached to users to represent who they are.
Why are so many Web3 projects and efforts devoted to identity services? To debunk the myth and understand this trend, we first need to understand one thing: how identity is useful.
Data rights invasion is ubiquitous on Web2 internet.
In Web2 internet, identity information has already been extensively exploited. In the Precision Marketing industry, personal identity information increases advertisement ROI. Large data companies such as Google and Facebook centrally exploits users’ identity data to provide paid advertisement service. A mismatch rises here. The owner of identity data are the users, but the identity data beneficiaries are data companies.
Legislative efforts have been made to reduce data rights invasions.
In the effort to protect users’ data privacy and data ownership rights, data laws such as CCPA and GDPR have been established. The data laws restrict data companies from over-exploiting users’ identities. As individual users, you may have already experienced that the internet advertisement streamed to you in the past two years has become less interesting.
One thing worth noting is that a good recommendation system isn’t the problem here. The problem is the invasion of users’ data rights. The goal of data law is to protect data privacy. The goal isn’t to reduce recommendation quality. We all want goods and services that suit our standards. A recommendation system is a service that helps us get what we want and saves time in locating them. This creates real monetary value.
In the Web2 world, data utility and data privacy do not co-exist.
Before data law establishment, we sacrifice data privacy to get data utility. After data law establishment, we sacrifice data utility to get data privacy.
In Web3, we see a solution to preserve both utility and privacy.
Most DID projects today utilize the blockchain to decentrally store users’ Web3 identity data to prevent central data access mismanagement.
On Aug 25, MetaMirror onboarded OKC (OKX Chain) as the first DID provider in the ecosystem. MetaMirror’s MBuddy Identity solution, unlike most DID projects, adopts a user-based decentralized data storage method. Instead of distributing all users’ data onto a decentralized network where each storage node is a component of the decentralized network, MetaMirror distributes individual users’ data to the user’s hand. That is, each user is a component of the decentralized identity system.
The advantage of user-based data allocation fundamentally solves the mismatch problem we mentioned earlier. In this model, the user controls their identity data and decides the data usage based on their needs. As a result of data contribution, users will receive the monetary reward derived from the value of their identity data. In this model, the user is both the data owner and the data utility beneficiary. The privacy invasion problem thus no longer exists.
With the privacy issue being resolved, MetaMirror’s Web3+ identity solution allows any data to be brought into use.
This may include sensitive genetic data, health data, and more. In the past, such sensitive information is siloed due to privacy concerns, causing data inaccessibility problems for researchers in various fields. MetaMirror’s vision is to unleash the massive data value that lies in sensitive data using blockchain technology and lay the foundation for all data-based industries.
MetaMirror’s MBuddy Identity currently supports data sources from Web2 platforms and Web3 blockchains. Their first use case is Web3 campaigns.
Web3 projects often post campaigns on centralized platforms such as Twitter and Discord. After completing campaign tasks on Web2 platforms, users can claim rewards with their Web2 data using MBuddy Identity. You can find the latest campaigns on the MBuddy Portal website.
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