The Web3 stands for the decentralization of digital identity. Existing structures, which are primarily characterized by big tech and are primarily characterized by centralization, are being broken up by this development. The focus is on solutions based on blockchain technology, which initially give users back control over their data and are also designed as open systems. Self-sovereign identity (SSI) is a central element of this change, which is exciting not only investors but also government institutions.
Key Points
- Web 2.0 collects data and stores it centrally
- Web3 gives control of the data back to the user
- The wallet as a component of SSI enables the deposit of personal data
- The development of Web3 has been picking up speed for several years and has quadrupled in the last 3 years
The development of the Web3
Web3 is not simply a further development of its predecessor. It is a direct response to the specific problems of Web 2.0. Every time users register, they are forced to enter their personal data. Companies thus collect a great deal of information about their users in central databases. What happens to this data in the following cannot be traced by those affected. This is not without problems for data protection reasons and has already made negative headlines in recent years.
For companies, personal data is a lucrative business. It can be used to analyze purchasing behavior, create personality profiles and personalize advertising. In the worst case, this data can be sold – as has already happened in the past – or misappropriated by criminals. Personal information has thus become a central source of revenue for large technology companies. Furthermore, centrally stored identities are not open ecosystems. Each new registration leads to a new identity. As a result, more and more data is slipping away from the user.
SSI as part of the Web3
Giving data sovereignty back to the user is a central component of the current development on the web. The focus is on self-sovereign identity, which consists of two elements. First, sensitive information is stored in a private digital wallet. This could be an ID card, driver’s license, monthly ticket or credit card information. The wallet is an app that remains in the possession of the user and to which no one else has access.
The blockchain is the second important element of SSI. Verified certificates (which are linked to the wallet) are stored in encrypted form in the blockchain. These then serve as identifiers for the user. Instead of proving his identity with his ID card, this is done with a certificate stored in the blockchain. It is up to the user to decide to whom this certificate is made available. He thus regains control over his digital identity and prevents the misuse of his personal data.
Further benefits of SSI in the Web3
However, sovereignty over one’s own data is only one advantage of self-sovereign identity. SSI is interoperable, making identities generated for each service and stored centrally a thing of the past. By using SSI, credentials are transmitted. These are then verifiable according to W3C specifications. Instead of a multitude of credentials, the user merely uses his wallet and the certificates stored in the blockchain in a tamper-proof manner. The process is therefore more user-friendly than existing systems, which makes it easier for users to access new services.
This reduces the workload for companies. Users bring their own identity with them, which enables doubtless identification. Sensitive data no longer needs to be stored on local servers, which reduces the risk of a data breach. In addition, the interoperable system can also be easily used in the analog world for services or access authorizations.
How far is the Web3?
The development of Web3 has been picking up speed for several years. Young start-ups specializing in blockchain technology made a start. In the meantime, these have grown strongly and have been able to convince numerous investors. The investment volume in 2021 alone was 17.9 billion US dollars and has more than quadrupled within three years. In particular, last year’s ongoing discussion about metaverse worlds as well as NFTs have given the idea of Web3 a boost. Platform-independent identity solutions are already being used very successfully here. But government institutions have also gratefully embraced the discussion about decentralized identity. With the European digital identity, the self-sovereign identity is being pushed and promoted by the highest political authorities.