For most of the history of the internet, a user’s identity was secured simply with a username and password combination, with all data being held on the provider’s—often centralized—systems. As the web has evolved, some new forms of identity verification have emerged, but these largely still put third parties in control.
However, with the rise of Web3 comes the opportunity for users to take control of their data. Thanks to the benefits of blockchain technology, users will have access to digital self-sovereign identities (SSIs) that enable them to confirm who they are while still retaining complete control over their data. These IDs come in many forms, including non-fungible tokens (NFTs) that live in an individual wallet and can follow a user across all platforms, allowing only them to decide exactly what is shown and to whom.
This is a major boon for users and a massive stride toward true data ownership. Users not only retain their rights to personal information, but they also have verifiable profiles that can follow them wherever they go in both the real world and the metaverse.
The potential of portable reputation
Web3 technology makes it possible for all of an individual’s history and credentials to be held within a single digital ID. This can include social, financial, medical, and professional data, as well as shopping history, contacts, and much more. While this may sound like an intimidating amount of information to be stored in a single ID, most of us already rely on Big Tech to store this information on our behalf; the difference is, with SSIs, all of that information belongs solely to the user to do with as they wish.
When set up, personal information and previous actions can be linked to this digital identity, enabling a genuinely sovereign profile that can follow an individual across multiple platforms. As it stands, a profile only stores a user’s standing on its own siloed service. A LinkedIn user starts from scratch on Instagram, for example, regardless of the number of existing followers they have. However, with an NFT-powered identity, it becomes effortless to prove your reputation and carry it with you as you traverse the web. It is even possible to use various metrics to ensure that an SSI is held by a real human being, not a bot, enabling a more transparent and fair internet.
The question of who controls user data is hardly a trivial one, and it’s not just about security and privacy; it’s about money. Major tech companies in the U.S. have combined advertising revenue that exceeds over $100 billion a year, more than half of global digital advertising revenue. This data has real value, but right now, it’s owned by companies and not individuals.
By taking this information out of the hands of these companies and placing it firmly back under the control of the people who own it, there could be significant benefits for businesses, as well. Currently, retailers rely on purchasing consumer data from these big tech firms as a basis for advertising to customers. However, fraud remains a significant problem with this data, and around 40% of businesses say that this problem is holding them back from expanding in the digital arena.
Now, imagine if customers provided their own data using an SSI. For one, the business could be confident that 100% of the info they receive is accurate. Also, they wouldn’t be buying this info from third parties—consumers themselves would provide it. This would save massive overhead for these businesses, which they could then pass on to customers. It’s a win-win and would stimulate local and national economies by putting more money into the hands of both spenders and businesses.
There are multiple benefits across many other industries as well. In the medical field, a substantial number of misdiagnoses come from professionals having incomplete records. This is caused by a patient’s history usually being spread across many institutions that don’t always share data. SSIs would hold all medical records in their entirety and also enable individuals, or designated family members, to determine what data could be accessed and when.
The same basic idea can apply to educational records, business credentials, work history, online interactions, and so much more. Bearing similar importance is the seamless access and security that comes from having a single, unfalsifiable profile that can represent an individual across any centralized or decentralized service.
On the ground
Fortunately, solutions are on the way. While it isn’t clear if there will be one globally adopted system for the rollout of SSIs or if an array of interoperable services will emerge, it is likely just a matter of time before they become normalized. Individuals are waking up to the fact that they have the same human rights in cyberspace that they do in the physical world, and they’re demanding solutions. Fortunately, multiple projects already exist that are attempting to tackle this problem, and all of them allow users to stay in control of their data.
With the rise of Web3 platforms, a digital ID as a fundamental human right—as well as a practical necessity—needs to be addressed. Users can’t afford to allow even more control over their data to fall deeper into the hands of businesses and governments, and fortunately, they don’t have to do that. To truly offer people a metaverse that respects their autonomy and creates a platform-independent, cohesive experience, we must give power back to individuals, and it all starts today with this technology.
Sandy Carter is senior vice president and channel chief at Unstoppable Domains. Unstoppable Domains is a partner of Fortune’s Most Powerful Women summit.
