As we enter 2023, it’s more clear than ever that the decentralized digital revolution isn’t going away. Businesses and individuals alike are starting to see the benefits of this nascent technology and Web3 services are on the rise.
However, with this change come new and growing concerns over security and access, as well as fundamental human-rights issues to consider. Realistically, if digital services are only going to become more and more common in regular life, making safe access to them is about more than just convenience – it’s essential.
Sandy Carter is senior vice president and channel chief of Unstoppable Domains. This article is part of Crypto 2023.
Fortunately, the industry is ready to address these issues in the form of sovereign digital identities that can act as both a gateway and shield for Web3 platforms. Best of all, this isn’t an idea for tomorrow – it’s a technology available to all today.
Securing your identity is only the beginning
Identity theft isn’t new, but it is a growing concern with every passing year. According to PwC's "Global Economic Crime and Fraud Survey 2022," external threats from hackers and organized crime are rising, with 46% of respondents claiming they have suffered some form of fraud in the past 24 months. With the way things are going, this needs to change.
The big issue is how much control and security people have with their digital identities. Digital systems already play a big role in our lives. With Web3 looking to digitize our lives even further, the need to be in charge of who you are online has never been more important.
Read more: Hardliners Stymie Online Identity Innovation
Having such an ID comes with a whole host of benefits for interacting with Web3 services because it can act as a wallet address, a reputational tool and much more. It can covey your credentials across multiple computer platforms, enable encrypted email forwarding and even serve as a digital business card.
Digital identity – specifically solutions leveraging zero-knowledge proofs (ZKP) – can also be used to attest to something without having to provide personally identifying information as proof. For crypto enthusiasts, it might be most exciting to hear it can complete know-your-customer (KYC) requirements without having to hand over sensitive documentation to third parties.
This isn’t just about Web3 access either. Anywhere you have an existing legacy identification system you have a system that could benefit from blockchain-powered, ZK-enabled, verifiable credentials. These systems ensure nobody except the owner can access their sensitive data and also give service providers the assurance they are dealing with real customers, not imposters.
Web3 digital identities stand to be both essential and revolutionary in the coming decade, and is already gaining traction in the market today. Fast and efficient blockchains already exist that can provide the speed and scaling capacity to offer Web3 services to the whole globe, and digital identity frameworks are being rolled out on a global scale.
Meanwhile, payments giant PayPal has just teamed up with non-custodial wallet app MetaMask to make it easier for people to get involved with cryptocurrencies and Web3 in general. Blockchain-native identities matter in each and every case here, and have potential to improve existing Web standards.
Significantly more secure
The world is primed with many use cases ripe for this technology to address. Anybody will be able to send and receive safe digital payments in just a few clicks. Personal messaging can also be kept completely private while being secure from spoofing or impersonators. Even sensitive material like medical records can be linked to the ID in an encrypted manner.
These and numerous other applications stand to make many aspects of life much easier and significantly more secure. Further, it rebalances the scales between those that produce data and those who need it.
In commercial applications, for instance, people could get additional rewards for sharing their data. Companies could offer perks, bonuses and rewards directly to their users based on assets within their digital identity profiles, enabling countless new opportunities for brands and consumers to participate in a vibrant Web3 ecosystem.
The coming year is bound to see some exciting developments unfold in the Web3 space. There’s no putting the genie back into the bottle. With so many new businesses entering the field, it’s time for people to begin future-proofing themselves.