Digital identity will be web3’s eureka use case | Opinion

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As a seasoned investor with a background in finance and technology, I can confidently say that we are on the brink of another technological revolution. Just as text messaging transformed the way we communicate, digital identity services have the potential to reshape our online existence.

On December 3, 1992, an ordinary day turned extraordinary. A young test engineer named Neil Papworth, aged 22, sent the very first text message. It was simply “Merry Christmas,” crafted on a PC, but this seemingly trivial act would revolutionize global communication.

At that point, cellphones were relatively new and exciting inventions. They were useful and intriguing, but not essential. The reason being, both parties had to be reachable simultaneously for any communication to take place.

If not for text messaging, they would have remained as they were. However, with this novel application of mobile devices, their popularity spread everywhere, and soon enough, text messaging emerged as the most commonly used data service globally.

It seems as though a breakthrough similar to the ‘eureka’ moment with blockchain technology is on the horizon for another innovative field. While blockchains are frequently perceived by some as nothing more than a novelty, a fleeting trend, or an unrealistic concept without practical application, Web3 technology enjoys popularity but is far from commonplace.

To change that, we need a text message. Digital identity is just that.

The digital dilemma

From the latest U.S. election period, we can infer that influence through online presence could potentially be the most potent political power globally. Podcasts function as extended forums for debate, social media rapidly magnifies every statement into a blaze, and vice presidential candidates engage in live-streamed gaming sessions.

In today’s digital era, it’s essential to verify one’s identity online due to the increasing complexities and challenges. However, the advancements in deepfakes and AI-generated content have blurred the lines between reality and deception. This poses a significant threat not only to our personal identities but also to financial institutions that are grappling with highly sophisticated fraud techniques. Moreover, governments are becoming aware that conventional identification methods may no longer be reliable or trustworthy enough in this evolving digital landscape.

Across the globe, digital identity solutions are being created or put into use. However, many of these solutions are simply mobile apps that require traditional physical ID cards for authentication, a method that has been in place for several decades.

Just like how the original cellphones were just portable versions of the one you had at home.

The concept should go beyond simple portability. It’s not simply a mobile version of your identity card. Instead, it needs to be indisputable, distinct, and inherently connected to your very essence as a human being. These ‘personhood credentials,’ as recently coined by a team of researchers, can only be realized through web3 technology. I firmly believe that this application will be the key to seamlessly incorporating web3 into our daily lives.

The honeypot

Because it’s more secure to link a digital ID service with physical IDs instead of having them separately, isn’t it? A single, centralized database of information can be easily targeted and compromised.

Regardless of the safety measures we put in place, such as barriers against individual hackers, foreign entities, political groups, or companies, there’s always a way to overcome them – it’s like having a 10-foot wall and finding an 11-foot ladder. In other words, no system is entirely immune to external threats.

Picture this: A secure safe filled with detailed records about each and every one of us, providing enough information for someone to mimic, plunder, or obliterate an individual’s identity. This could be considered the ultimate bank robbery in terms of global value.

A decentralized approach holds the key! A blockchain incorporating an identity structure, such as what Concordium has developed, serves as a foundation, yet we require further inventiveness and groundbreaking ideas to safeguard our human essence continuously.

The modern wallet

Since time immemorial, an ID has essentially been a simple document bearing your name. Over the years, enhancements such as photographs and scan-able barcodes have been incorporated. However, fundamentally, an ID remains a document carrying your name.

Today introduces an innovative approach to tasks. According to JP Morgan, the foundation of digital identity consists of four key components. The initial three are straightforward:

●  Identifiers: Things like your name, email address, or account number.

●  Identity attributes: Data points like where you went to school or where you work.

●  Reputation: Things you’ve participated in, your social followings, or content you’ve created.

Previously, having a Twitter account with the correct username, a blue verification badge, and 3 million followers would often establish someone’s identity beyond doubt. However, times have changed, and each of these three elements can now be separated or decentralized. One technology currently being used to validate reputation is Proof of Attendance Protocol (P.O.A.P.), which is employed for issuing certifications.

A crucial aspect shaping contemporary self-concept is the ownership of digital possessions. Your identity can be authenticated through the things you digitally possess. Through blockchain technology, your identity will be securely recorded and verified, ensuring it remains unchanged and accurately represented.

Rather than employing a Bored Ape to verify your human identity (although it’s technically possible), we’ll generate unique, non-transferable, and uncopyable identity tokens. These tokens will serve as the essential component in the contemporary digital wallet system.

The need for caution

However, similar to how early text messaging systems were frequently subjected to fraud, we can anticipate facing challenges. Although the “Wild West” era of cryptocurrency may have passed, there are still many individuals peddling dubious products in this field.

The responsibility of shaping digital identity should not be delegated solely to those seeking quick and easy implementation. Instead, it’s crucial for both government authorities and pioneering blockchain experts to collaborate. Their shared focus should be on establishing regulations, prioritizing privacy, and ensuring security. Moreover, individual ownership of data should be upheld, rather than having it centralized.

When we do that, web3 will have its eureka moment. It will find its Neil Papworth.

Boris Bohrer-Bilowitzki

Boris Bohrer-Bilowitzki currently serves as the CEO of Concordium, a significant blockchain and technology company based in London. Prior to this role, he held positions such as Chief Commercial Officer at Copper.co and Senior Relationship Manager at Newscape Capital Group. His educational background includes studies at the University of St. Gallen, and he also earned an MBA from IMADEC University.

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2024-11-19 15:08