As we enter 2023, it is clearer than ever that the decentralized digital revolution is not going away. Businesses and individuals are beginning to see the benefits of this emerging technology and Web3 services are on the rise.
However, with this change comes new and growing security and access concerns, as well as fundamental human rights issues to consider. Realistically, while digital services are only becoming more and more commonplace in everyday life, making them secure to access is more than just a matter of convenience – it’s essential.
Sandy Carter is Senior Vice President and Head of the Unstoppable Domains Chain. 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 serve as both a gateway and a shield for Web3 platforms. Best of all, it’s not an idea for tomorrow – it’s technology available to everyone today.
Securing your identity is just the start
Identity theft is not new, but it is a growing concern year after year. According to PwC’s Global Economic Crime and Fraud Survey 2022, external threats from hackers and organized crime are increasing, with 46% of respondents saying they have experienced some form of fraud in the past 24 months. With the way things are going, that has 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 more, the need to control who you are online has never been greater.
Read more: Hardliners Stymie Online Identity Innovation
Having such an identifier has many advantages for interacting with Web3 services, as it can serve as a wallet address, a reputation tool and much more. It can transmit your credentials across multiple computer platforms, enable encrypted email transfer, and even serve as a digital business card.
Digital identity – especially solutions leveraging zero-knowledge proofs (ZKP) – can also be used to attest to something without having to provide personally identifiable information as proof. For crypto enthusiasts, it could be very exciting to hear that it can meet know-your-customer (KYC) requirements without having to hand over sensitive documentation to third parties.
It’s not just Web3 access either. Wherever you have an existing credential, you have a system that could benefit from verifiable, blockchain-powered, ZK-enabled credentials. These systems ensure that no one but the owner can access their sensitive data and also give service providers confidence that they are dealing with real customers and not imposters.
Web3 digital identities will be both essential and revolutionary in the coming decade, and are already gaining traction in the market today. There are already fast and efficient blockchains that can provide the speed and scalability needed to deliver Web3 services around the world, and digital identity frameworks are being deployed globally.
Take global brands such as Nike and Celebrity Cruises that are launching into Web3. Perhaps most notably, coffee giant Starbucks is reworking its hugely important loyalty program by implementing its Starbucks Odyssey NFTs (non-fungible tokens) to create an accessible and engaging Web3 community.
Read more: Starbucks Launches Beta of Web3 Loyalty Program “Odyssey”
Meanwhile, payments giant PayPal has just teamed up with noncustodial wallet app MetaMask to make it easier for people to get involved with cryptocurrencies and Web3 in general. Blockchain-native identities are important in any case here and have the potential to improve existing web standards.
Much more secure
The world is primed with many ripe use cases for this technology. Everyone will be able to send and receive secure digital payments with just a few clicks. Personal messaging can also be kept completely private while being safe from identity theft or impersonators. Even sensitive documents like medical records can be linked to the ID in an encrypted way.
These apps, along with many others, will make many aspects of life much easier and much safer. Moreover, it rebalances the scales between those who produce the data and those who need it.
In commercial applications, for example, users could get additional rewards for sharing their data. Companies could offer benefits, bonuses and rewards directly to their users based on the assets of their digital identity profiles, providing countless new opportunities for brands and consumers to participate in a vibrant Web3 ecosystem.
The coming year will inevitably see some exciting developments taking place in the Web3 space. There is no question of putting the genie back in the bottle. With so many new companies entering the field, it’s time for people to start preparing for the future.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.