Web 3.0 will change the internet as we know it. Learn about the future of identity, soulbound tokens, and Web 3.0 in this article.
IT specialists and internet conglomerates all over the world are actively developing Web 3.0 technology. One of the prominent advocates of the new internet is Vitalik Buterin, the co-founder of Ethereum, who’s now working on decentralized, easily-verifiable forms of identity—read on to learn more about “Soulbound Tokens”— in the quest to bring us closer to Web 3.0. Buterin, however, is by no means alone, as countless IT companies are now striving to develop their own visions of the new, decentralized internet.
But what exactly is Web 3.0? And what does it really mean for the future of the internet? We at Sumsub decided to explain what Web 3.0 is, how the idea came to life, and its importance for the future of digital identity.
The first stage of the internet came in the form of Web 1.0. This was a free, decentralized system, full of independent websites, which were based on a variety of protocols, such as HTTP, FTP, and RRS. At that time, regulators still didn’t have fixed laws regarding the technology, which allowed users to experiment.
Web 1.0 roughly refers to the period from the 1990s to early 2000s. It was an online haven for those who knew how to work with HTTP, FTP, and RRS, but decentralization also led to a spread of online fraud, and oftentimes the protocols themselves didn’t work. In short, the Web 1.0 system wasn’t particularly user-friendly, and was more of a fit for IT specialists and enthusiasts.
Web 2.0 was the next logical step in the evolution of the internet, focusing on centralized platforms that could gather users in more convenient web spaces. Today’s internet is Web 2.0, where everyone uses a handful of centralized platforms. These include social networks, banking services, video streaming platforms, etc.
The main concern of regulators and IT specialists over Web 2.0 is the amount of power that centralized platforms have. Companies now own and collect user’s personal data, and can potentially wield it in their own interests. So the worry is how this information gets used, as well as the possibility of leakage.
Web 3.0 is a logical evolution and, to an extent, combination of Webs 1.0 and 2.0. Its goal is to enable users to control their data, money, and identities through a decentralized system. The IT specialists building this call it a “peer-to-peer” approach, which removes the common traditional centralized databases of the internet, and instead stores information across multiple devices that equally participate in the network.
At the moment, there’s no clear definition of what Web 3.0 is. However, more and more companies are working towards developing their own forms of Web 3.0 based on blockchain technology. Still, nobody really knows what it will look like and when we’ll start using it. The only certainty is that Web 3.0 will distance itself from centralized systems, such as banks, social networks, and other big companies collecting our information. Instead, it will allow companies and individuals to work with each other based on mutual trust.
One of the most important things that Web 3.0 could bring to the world is a new form of digital identity. Unlike Web 2.0, personal data will be controlled not by centralized entities (such as companies, banks, etc.), but by users themselves. This will give us more control over our data, promising to create a form of digital identity structured around the principles of privacy, security, and freedom.
Web 3.0 can also bring many benefits to identification, verification, and authentication. First, the technology makes it possible for users to skip repeat verification all the time, since their data will be stored on their personal devices. Second, users will be able to verify their identity without revealing personal information. So, if these principles hold true in practice, Web 3.0 identity should become the most secure yet simple form of digital identity we’ve known.
Identity in Web 3.0 centers on the concept of Self-Sovereign Identity (SSI), where individuals are the sole owners of their personal data and accounts. In practice, SSI means:
To implement SSI safely, we suggest following the ‘triangle of trust’ principle, where SSI data is mediated by a provider, such as Sumsub. This means that users grant certain parts of their data to companies. The mediator then ensures that this data is secure and verified.
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There are many ways that Web 3.0 could change the ways we manage identity. The one we’ll discuss today is soulbound tokens.
Another new form of digital identity is the so-called Soulbound Tokens (SBTs) proposed by Vitalik Buterin.
SBTs use Non-Fungible Tokens (NFTs) that are tied to an individual or company, rather than the digital artworks they’re usually meant for. SBTs will be non-transferable and non-tradeable, unlike the current version of NFTs. These SBTs will essentially be a form of digital certificates that prove one’s abilities, credentials, commitments, and so on. For example, if a person graduated from a university, the diploma could be an SBT proving this. These credentials will be publicly visible, and nobody will be able to transfer or change them.
SBTs could create a sense of security in a decentralized web, allowing everyone to access and verify one’s “soul”. This may finally resolve the issue of unverifiable reputation, a problem we discussed in our previous article.
Web 3.0 has a variety of benefits for both companies and individuals.
Web 3.0 will allow companies to store less information on their servers since they will be able to store encrypted information on decentralized systems. Such technology will also make the authentication process faster, while the costs for storing data will be reduced.
Web 3.0 identity holders won’t need to pass Know Your Customer (KYC) checks every time they register at a new platform. Instead, companies can simply request access to data from the user, while the users themselves manage the access levels.
Companies will be able to encrypt stored data, so even if sensitive data gets leaked, nobody will be able to use it. Besides that, decentralized systems will allow companies to collect less information from their customers, making them feel more secure.
Individuals also get a number of benefits from using Web 3.0 identity management systems. This includes quicker access to personal information (through a wallet app, for instance) and more secure data storage. Plus, people will be empowered to share their personal data only with those who they explicitly permit to access it, giving them more control.