Web 3.0 and the Promise of a Privacy-First Future

07/21/2021 Reading Time: 2 Minutes

It is safe to say that the internet will be one of the greatest inventions in our lifetime. It has connected the world in previously unimaginable ways and changed our lives to the point where it is difficult to recall a time without it. Since its inception, it has left an unquantifiable amount of positive impacts on our lives, but like any technology, has its flaws as well. One major design flaw is the ease in privacy exploitation. Our personal data is being collected as easily as it is to complete an arduous task with a single click, but new technologies are on the horizon that have the potential to fix this problem. Coined web 3.0, areas like cryptocurrency, blockchain, NFTs and DAOs are advancing the internet in a privacy-first manner.

Blockhains & Pseudonymous Identification

How these technologies are doing it is with a widely adopted method of record keeping on blockchains that involve pseudonymous identification. Rather than using personal information to transact or exchange assets, pseudonymous values attached to digital wallets in a cryptographic hash form like, 0x531ae2f8963f0d3fb382407be42e30a7fdd7e536e3763e407f555562907f70e6, are used to identify individuals. This use of cryptography, instead of personal identity like our email or SSN, not only helps us to better conceal our identities, but also makes it difficult for corporations to track and use our data. With larger adoption, this form of identity poses a major blow to the likes of Facebook and Google and a major win for our privacy.

Pseudonymous ≠ Anonymous

While it sounds like web 3.0 will succeed in privacy where previous iterations of the internet have failed, pseudonymous doesn’t mean anonymous. There is no better example of this than the CIA being quoted that they would love to have criminals use cryptocurrencies like Bitcoin. The reason why our privacy is not completely secure is because blockchain technologies use publicly viewable ledgers that make every transaction since inception accessible. This means that while your wallets are encrypted with a pattern that is hard to decipher, anyone has the ability to look at your transactions on the blockchain, leaving a forensic footprint that can be exploited only if someone has private keys attached to your wallet to identify who you are. Not an easy task to do and something more difficult than hacking a password protected email account.

Anonymous Web 3.0

If the idea of not being completely anonymous scares you, don’t fret, because while most blockchains use pseudonymous identity, completely anonymous solutions are also available. From privacy coins like Monero and Zcash, which obscure wallet addresses to make transactions completely anonymous (via zero-knowledge proofs) to services that tumble coins by circulating and exchanging them through various wallets, there are a lot of developments focused on making web 3.0 completely anonymous.

Regaining Our Privacy

Whether or not you believe that this is a good thing is not what I’m here to debate, but what is apparent is that web 3.0 is putting user privacy and the democratization of services at the forefront of the next iteration of the internet. Gone are the days of the internet's walled gardens. Monopolies that previously won battles to determine how we surf the web are losing their advantage to new technologies shifting the power and privacy back to the user. It might not be apparent today with the volatility in interest in web 3.0, but the same can be said about the introduction of the internet.

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