How will Web3 Change digital identity?

What is Web3?

As the digital landscape expands, privacy and user trust have become increasingly important concerns. Centralized platforms, such as Facebook, have demonstrated the potential for breaches of user trust and privacy, as evidenced by the Cambridge Analytica scandal. In this incident, personal information of millions of Facebook users was harvested without their consent, leading to widespread outrage and highlighting the vulnerabilities inherent in centralized digital identity systems.

Events like this served as a wake-up call, and internet users have become increasingly cognisant of just how much of their data is being used. Of course, this cognisance isn’t worth much without an alternative.

So, enter Web3.

Web3, as its name suggests, is the third iteration of the internet. Web2, the version we know and use today, is more dynamic and robust than its predecessor, but the means to access it is controlled by very few large and powerful entities. In the blockchain space, we refer to this as “centralization”. Essentially, if someone owns a disproportionate amount of something, they get to make the rules. This may come in the form of unfair pricing for goods and services, and in the case of accessing different parts of the internet, at the cost of user-privacy.

Web3, by contrast, is an Internet built on blockchains that is decentralized and peer-to-peer. What this looks like for users on a day-to-day level is using an internet for the same things they already use it for, but under a system that puts users first, giving them the power to choose which information to share and with whom. This user-centric approach allows individuals to manage their online presence according to their personal preferences, fostering greater trust and transparency in the digital world.

Lol, wait, then what was Web1?

Web1, also known as the first generation of the World Wide Web, refers to the initial phase of the internet from its inception in the late 1980s to the early 2000s. During this time, the web was primarily a static and one-way medium of communication, where users could only consume content and not interact with it.

Web1 websites were simple and text-based, with basic HTML markup and limited graphics. There was no concept of dynamic content or multimedia, and the focus was on providing information and access to resources such as email and newsgroups.

The web was also largely decentralized during this time, with no dominant tech companies or platforms controlling the flow of information or user data. However, this also meant that there was no standardization in terms of protocols, security, or user authentication.

Overall, Web1 was a foundational era for the internet, laying the groundwork for the more interactive and dynamic Web2 that followed. Of course, as mentioned above, what came with Web2 was decentralization and the mass collecting of user data.

What does digital identity look like in the age of Web3?

One way that digital identity is being managed in Web3 is through the use of wallets. In Web3, a wallet is a digital container that stores and manages user data, including cryptocurrencies, digital assets, and personal information. The user has complete control over the wallet, and can choose what information to share and with whom.

A user’s identity is verified through a process called self-sovereign identity (SSI), which allows the user to create and manage their own digital identity using a decentralized, blockchain-based system. This eliminates the need for a centralized authority to manage and verify identity, providing greater privacy and security for users.

Interoperability

Web3 wallets are also designed to be interoperable, allowing users to seamlessly switch between different dApps and blockchain networks, while maintaining control over their data and digital assets. For example, a user could use their Web3 wallet to participate in a decentralized finance (DeFi) application, or to buy and sell digital art on an NFT marketplace. Why might this be attractive to users? To think about this, we should consider the way things are in Web2.

Currently, one’s credentials and identity have to be set up and re-setup… and re-re-set up every time a user signs up for a new account on a new website or app. Get logged out? You’d have to log back in and make sure to remember your password. This is tiresome but for the time being, necessary.

This phenomenon is due to a lack of interoperability. One can consider email, phone carriers, even roads as examples of why interoperability is so important. Another oft-cited example for why interoperability is the internet itself. With different programs and protocols interacting with each other, the Internet is a place where users can interact no matter who they are or what network they’re on. The Internet wouldn’t be inter-connected without interoperability. However, this only goes so far. There is no one thing you can use to access multiple services online. With a wallet, a user has a central identity with which to interact with companies and individuals. With your digital identity, you can connect to any service via a simple click in the form of a digital signature.

Privacy

More than this, Web3 tech offers solutions to privacy, like the employment of zero-knowledge proofs whereby users can prove certain attributes about themselves without revealing the underlying data. This enables users to interact with service providers while preserving their privacy, avoiding unnecessary data exposure, and minimizing the risk of data breaches.

Verification

Something that is also emerging out of the Web3 space is verifiable credentials in the way of Soulbound tokens. Soulbound tokens are non-transferrable and can represent things like diplomas or certifications/ WIth solutions like this, one’s identity and achievements can be issued, stored, and presented digitally, reducing the risk of fraud and streamlining the process of verifying credentials across different platforms.

Some final thoughts

The evolution of digital identity in the Web3 ecosystem presents a groundbreaking shift towards a more secure, user-centric, and privacy-preserving online experience. By leveraging the power of decentralization and blockchain technology, Web3 digital identity solutions can offer individuals unprecedented control over their personal data, while fostering trust and transparency in the digital realm.