Web 3.0 Core Components: Will Identity Management Be the Next 100 Billion Market? (one)
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An Indispensable Core Component of Web 3.0: Will Identity Management Be the Next 100 Billion Market? (two)
In the early days of the Internet, there was a saying that was widely circulated: "On the Internet, nobody knows you're a dog (On the Internet, nobody knows you're a dog)".
Image source: Internet
The phrase itself was the title of a cartoon in The New Yorker on July 5, 1993, showing two dogs, one sitting in a chair in front of a computer, and the other sitting on the floor Said this "classic saying".
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Image source: Internet
Thanks to this sentence, this cartoon has become the most reprinted cartoon in The New Yorker. Some people think that this cartoon reflects an understanding of the Internet, emphasizing that users can use it in a way that does not disclose personal information. The ability to send or receive information in any way.
But the good times didn't last long. Due to the absence of Internet digital identities, behaviors such as cyber violence and human flesh searches began to go crazy. This sentence also became a portrayal of the chaotic situation at that time.
In Bruce Schneier's book "Our Trust: Why Sometimes You Trust, Sometimes You Don't Trust (Liars and Outliers)", the author, as an American cryptography scholar and information security expert, expounds four different social pressures: moral pressure, reputation pressure , institutional pressure and defense mechanisms.
He believes that social pressure is the origin of trust. With these pressures, the behavior of individuals will be restrained and the group will be able to cooperate.
It is not difficult to understand the phenomenon of the barbaric growth of the Internet in the early days. It is precisely because the identity in the digital world is out of touch with the real society that the pressure in reality cannot be translated to the Internet, so that it has become a wilderness where trust needs to be reshaped and rebuilt.
As we all know, the term "identity" covers a range of dimensions including society, culture, geography, psychology, politics, beliefs, etc. It is a "set of attributes related to an entity". or device.
In order to solve the above problems, the network real name system was proposed. After all, since ancient times, the trust system based on identity recognition has accompanied the development of human society.
The combination of photos, documents, and credit created the modern identity system, which is still in use today, and has become a tool for citizens to enter the economic system and recognize their contributions to society.
As of March 31, 2021, nearly two-thirds (65.6%) of Internet users in the world, a variety of rich Internet applications and services integrate digital life with real life through computer equipment, and tens of thousands of users , enterprises and institutions interact at all times.
In this interaction, two digital identity models emerged, one is the traditional account model on the Internet, and the other is one-click login.
In the traditional account mode, when we use different websites and applications, they all have their own independent set of identity registration and login systems.
In fact, we provide identity information to service providers, service providers create IDs, and then lend us IDs, and the data we generate is stored on their servers. The disadvantage of this model is that each application needs to create an account. The more accounts, the more chaotic the management.
As a result, the second one-key login mode came into being. To put it simply, we upload the data to the central system of a login service provider, and it provides the personal data to a third party with the authorization of the individual.
For example, we currently generally accept services for one-click login to various applications through account IDs provided by major platforms such as WeChat, Alipay, Facebook, and Twitter.
Although it is more convenient to use, entrusting personal data to large platforms is extremely dangerous for both enterprises and users, and two acute problems arise from this.
First of all, users lack ownership of data, and the platform monopolizes most of the revenue. For the whole of 2021, Facebook achieved a profit of US$39.4 billion, a year-on-year increase of 35%, while Google’s advertising revenue in Q4 last year exceeded US$60 billion. Compared with this, the income of creators who produce content for these platforms appears meager .
Even MrBeast (Jimmy Donaldson), the highest-paid Youtube influencer in 2021, is only $54 million, and this is his joint income with the team.
Our digital identities are owned and utilized by these big platforms. Thousands of data constitute accurate user portraits. Under the analysis of big data, our behaviors and preferences become the targets of platform predictions and advertisers. Most people not only produce data for free, but also pay for platform services and advertisements.
Secondly, the centralized architecture means that once a privacy leak occurs, it is an unavoidable event. In one of the most notorious cases, the British company Cambridge Analytica was not authorized to collect information on 50 million Facebook users to run political campaign ads.
Whether it is a traditional account model or one-click login, the control of personal data has never belonged to the user himself. As the pain points of data leakage and abuse become increasingly prominent, identity recognition under Web 2.0 is coming to an inflection point.
Man versus Machine: The Lost Identity in Web 3.0
The emergence of Web 3.0 is seen as an opportunity to create a strong identity system. A flexible, shared, and resilient decentralized identity layer will unleash greater innovation through a wider design space.
The distributed architecture of the blockchain, which cannot be tampered with and hashed, can establish a credible and decentralized identity system to ensure that applications are fully interoperable across multiple industries and ecosystems. At the same time, individuals can manage their identities independently without relying on A platform that provides applications. Although blockchain is not strongly bound to decentralized identity, it can be said that blockchain technology and protocols are the optimal solution for building a decentralized identity system.
Similar to the early days of the Internet, there is a lack of identity in the current encrypted world. Compared with DeFi, NFT, DAO, etc., decentralized identity (DID) is still a neglected topic.
Many blockchain projects try to create a more effective environment than the current world. After all, if this goal is realized, in addition to capturing the value of the original encryption ecosystem, it can also expand externally and realize the connection between encryption and the real world.
Amentum Capital attributed the absence of such transformative products to the fact that the blockchain ecosystem is difficult to govern. The reason is the lack of a sufficiently secure identity layer, that is, the lack of a decentralized unique identity protocol.
Here we need to introduce an interesting experiment. If you are placed in a fully enclosed room, and you can only communicate with another room through a small hole, using text as a carrier, you can write down any questions and stuff them into the small hole, and the other party will write down the answer. Return the note. So how to use paper and pen to judge whether the other party is a real person or a computer?
The above experiment is a simplified version of the "Turing Test". Turing believes that if the machine can make the participants make false judgments, then the machine has passed the test and is considered to have human intelligence.
Although artificial intelligence such as "Iron Man" Jarvis is still far away from us, in fact, AI has already had a lot of applications in fields such as games and finance. The IOSG team pointed out that what converges with the new business model is the rapid development of hardware and machine learning theory, and in the Crypto world, the intelligence of AI will further grow exponentially and brutally.
In real life, we have a series of identity certificates such as ID cards and bank cards as a moat, which can prevent unofficial AI from participating in economic activities too much, but in Crypto, due to the absence of identity, machines are rapidly Siege cities and land.
Taking the P2E model as an example, P2E is essentially a business strategy that subsidizes the funds originally used for marketing and operations to reduce the cost of customer acquisition, and expects to increase user stickiness by motivating users into commercial value.
But now, with the prevalence of the wool party, P2E has begun to be occupied by machines, and robots will not pay for the experience, and even the value of communication is zero. It is reported that about 30% of the SLPs in Axie Infinity were stolen and sold by robots. To a certain extent, this also made it more difficult for the project party to update the economic model and manage the market value.
Some time ago, there was a picture floating around in the encryption world, illustrating the changes from Web 1.0 to Web 2.0 and then to Web 3.0.
Image source: Internet
If Web 1.0 is a login method with username and password, Web 2.0 is a one-click login mode using accounts such as Google, Facebook, and WeChat. When it comes to Web 3.0, it is to use a wallet to log in.
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Image source: Internet
Is "using a wallet to log in" the so-called DID? What does DID mean to us?
DID (Decentralized Identifier, decentralized identity system), refers to de-intermediation, allowing individuals or organizations to fully own the ownership, management and control of their own digital identity data, rather than having multiple centralized providers manage multiple digital identity.
From this point of view, "logging in with a wallet" is an application of DID. This transformation means that our data and information are no longer stored on the servers of large companies, and there is no need to risk data and assets being controlled by centralized entities. , can freely enjoy the right to use data.
Of course, on the existing basis, although easier-to-use tools including privacy and private key management have not yet been developed, the prototype of DID has come out.
Some people in the market have divided the DID architecture from bottom to top into four major components, namely identifier standards, infrastructure, credentials, applications (wallets, products), and of course beyond any single layer, at multiple levels Projects that make an impact.
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Image credit: Amber
At the layer of identifier standards, the DID standard of W3C (World Wide Web Consortium) and the DID standard of DIF (Decentralized Identity Foundation) play a key role.
The W3C DID standard is used to identify people, organizations and things, and to achieve many security and privacy protection guarantees. It is mainly composed of basic layer DID specifications and application layer verifiable claims.
The role of DIF is to enable users to have full ownership. Users can develop any identity registration or resolution system through the interface to resolve any type of distributed identifier through a unified interface, so that an open and decentralized identity ecosystem can be established. , and ensure interoperability among all participants. DIF alliance members include Microsoft, IBM, Accenture and other well-known enterprises.
The data abuse caused by centralization, platform fragmentation and the loss of users' data sovereignty are the realistic soil for DID. Blockchain decentralization, distributed database without permission, and data integrity audit and identity authentication, etc. Cryptography technology is equivalent to adding a general identity layer under the existing Internet application layer, and then using the identity layer to help users regain their data sovereignty from the giants.
