Today, every transaction, interaction and verification is simply a tap away. Daily activities are creating an ever-growing digital trail of our identities. Even wallets have evolved from well-worn physical receipt stuffers to uniform digital twins, with 3.4 billion people opting to use a digital wallet like Apple Pay in 2022. At the same time, identity theft is rising fast. The UK alone recorded a 23% rise in identity fraud cases from 2021 to 2022; and with the acceleration of AI set to escalate the ease of virtual mimicry, we’re all going to need better armour in this digital arena. 

Thankfully, in a rare case of regulation leading a technical transformation, the European Parliament approved the proposal for a new European digital identity framework under the eIDAS v2.0 regulation on February 29th. The framework includes an EU Digital Identity (EUDI) Wallet which will allow any European citizen to access public and private digital services simply using identity credentials on their phone. The EUDI wallet will securely store and manage all types of digital identity credentials, from driving licences, to health cards, to educational accreditations. In the words of the Commissioner for Internal Market, “It will empower citizens, give them control over their data and strengthen our technological sovereignty”. A strong statement, but in fact one that aptly describes the underlying purpose of the technology. 

The EUDI wallet architecture employs a self-sovereign identity (SSI) approach. This goes beyond user-centric design to user-ownership, where we individually own and manage the distribution of our personal data. A method called ‘selective disclosure’ enables us, as the user, to control the information we share online, whether that’s with websites, digital services or applications. It is an approach to individual privacy that will allow us all to use the internet as we do today but without all the unconsented 3rd-party data-sharing. A common example of selective disclosure is the ability to prove your age without disclosing all of the personal information in your driving licence or passport. You share a verifiable proof that you’re over 18 without giving away your home address, nationality or even exact birth date. This process significantly reduces the risks from uploading an image with your licence or passport to a website.

eIDAS v2.0 dictates that every EU citizen will be able to receive unique, verifiable credentials that are stored and accessed digitally in their EUDI-certified wallet. Verifiable credentials contain claims made by an issuer (e.g. government) about a credential holder (e.g. you) that can be cryptographically verified. The relying party (e.g. retailer) can then trust the data proof (e.g. 18+) that the individual presents, provided that they trust the ‘issuer’ of the credential used (i.e. gov ID yes, fake ID no). 

The term “self-sovereign” can sometimes elicit a perception of ungoverned chaos because of its relation to “decentralisation”, but the approach of the EU Digital Identity Framework sits on the controlled end of this spectrum. The EUDI wallet will be underpinned by a government-issued PID (Personal Identification Data) which is conceptually similar to a national ID card. The most commonly used and accepted credentials will be issued by centralised bodies such as governments, universities, banks and medical institutions just as they are today. The key differences simply lie in your ability to own and control access to your data, and your ability to use your data more easily across borders. 

The Estonian government introduced electronic IDs (eIDs) 22 years ago and approximately 1.4 million citizens use them today. Not only are the eIDs integrated into critical infrastructure like the Estonian health system for electronic health records and e-prescriptions, but the country saves 1 working week a year, ~2% of their GDP, by using the digital signatures enabled by this system. They remain outliers however, with only 14% of key public service providers across all Member States allowing cross-border authentication with an e-Identity system. The EUDI wallet aims to change this by indexing on the interoperability of the system and setting standards at the EU level.This means that data-heavy processes like opening a bank account or applying to university will not only be easier and more secure in your own country, but they will also be as easy and secure in other member states. Seamless cross border identification will become a reality; and in a world where the physical borders seem to keep getting higher, there’s at least hope in the digital ones coming down. 

Global consistency in the use of open standards has a significant impact on the adoption and accessibility of digital identity systems and there are positive signs that Canada, Singapore and other countries are adopting similar standards to the EU. That being said, open standards mean open to all. This includes the mighty powers that be. Apple and Google wallets are already the most adopted globally and as history has shown us, we’re often all too happy to give them our data in return for convenience. Today, the single-sign-on behemoths like Google and Facebook have the majority control over your digital identity and the data trail associated with it. Regulations like eIDAS v2.0 intend to loosen this grip and give control back to the individual, but with the potential that big tech’s digital payment wallets will also become our identity wallets, the FAANG’s could be sinking deeper. 

The road to digital self-sovereignty is a winding one. There will be roadblocks, conflicting signposts and some potential U turns, but overall the outlook is positive. If we can find the right balance of speed and safety then digital self-sovereign identity systems might play a significant part in the digital shield we’ve been looking for.

I had a meeting with a dog in a crown the other day. I’ve had meetings with food items, animals and many other hybrids that feel akin to the early MSN names or buzzfeed quizzes that would give you a rapper name based on your star sign and favourite colour. I would guess that the majority of people reading this are quite comfortable with this level of pseudonymity. I’d even ask if you noticed the last time someone took a meeting using their ENS name. Whereas if a regal dog had turned up to a meeting while I was working at AWS, I would have dismissed them immediately as a joke or a scam. In web3, however, I find myself being less aware of appearance, of the gender, background or ethnicity of the people I’m interacting with. These differentiators don’t feel as salient when someone can turn up to a meeting as a penguin.

I think that’s one of the greatest powers of web3 identity. Personally I’m not interested in the trading value of the name or the avatar, for me the value is in the ability for web3 identities to remove the conscious and unconscious biases that we inflict upon ourselves and upon others every day.

Pseudonymity, the act of concealing degrees of information about ones identity, is no new thing when it comes to reducing bias. The Bronte Sisters became the Bell Brothers and Mary Evans became George Eliot. We see many artists using pseudonyms, avatars or masks like The Gorillaz, DaftPunk, Sia, in fact Childish Gambino did famously use a rap name generator. Pseudonyms often enable an alter ego that can take actions that ones ‘core’ self cannot; perhaps out of fear of public conflict or even inner constraint. Benjamin Franklin for example, used female pseudonyms when writing satire or more feminist pieces, and then there are artists like Banksy who we may never know the full identity of.

Pseudonymity is a continuum, covering degrees from totally anonymous to thoroughly named. The public narrative has taught us to fear and mistrust those who hide parts of their identity online. But while there is merit to the arguments against pseudonymity, with the direction that the algorithm-led internet is heading, pseudonymous practices in the right contexts could have significant benefits for us all.

Our world systems and everyday actions have turned chronically online, and the constraints of the existing internet structures have collapsed the complexity and multiplicity of our identities. Our experiences, our opinions and history have been forcefully linked together by the ‘real-name web’, and we continue to proliferate the effects forsake of single sign on and access to social tools…dare I mention the data permissions for Threads.

There are positives to this convenience and ease, there are also contexts where it’s imperative to require legal names, but I fear the aggregation of all parts of our lives into a single digital profile is narrowing our exposure to diverse thought and limiting our sense of self and self-expression. I believe it is driving the growing trend towards a binary world view. This tendency to see things in terms of absolutes. If a person is X then they can’t be Y. If they worked at this company, or came from that background, they don’t have the ‘right’ to hold that opinion.

The ‘optimising’ nature of our digital feeds is tunneling our vision and moulding us into the single predictable ‘data type’ we’ve been assigned. You may not even realise it’s happening, but have you ever looked over someone’s shoulder whilst they’ve been scrolling and realised their feed is feeding them a different algorithm. That the view from their window doesn’t look like yours.

Identity is not meant to be one thing, it is many. It shifts within the contextual bounds we find ourselves in. But online the contextual boundedness of identity construction is often collapsed.  We have to present ourselves to our whole network all at once. Often having to simplify and remove nuance from our opinions to appeal to the masses. I know I’ve chosen not to voice opinions at all before because my view sits in the middle of the extremes and I fear being misunderstood and attacked on both sides. These biases exist because of how we are socialised and they differ for everyone. You only have to look at the countless studies of self-fulfilling prophecy and stereotype threat to realise how powerful the effects are.

The more nuances and diversity of thought are diminished, the more binary oppositions can take over. The effects of this are far reaching, from rises in cancel culture to political extremists appealing to polarised tribes. But for me, and for many of us in this space, I believe the greatest risks are in us building tools that multiply these effects rather than help to diminish them. There are so many negative biases we can’t escape in our real-world and we will continue to build practices to reduce these; but I do have to question, why bring these into the virtual world if we don’t have to?

The AI hysteria of today continues to strengthen the argument that technology is meant to broaden our possibilities and extend our capabilities. It is not meant to control, constrict, or narrow our humanity.

So where Web2 collapses our identity, Web3 brings the potential for identity dispersion. A term originating from Peter Burke’s Identity theory, it has been expanded in a web3 context to describe the ability for individuals to control the creation, separation, and unification of their multiple online selves.

In web3, you can have full ownership over your digital assets and digital identity. You get to determine what information is shared, with whom, and under what circumstances. It empowers users to shape their digital representation in each context, protect their privacy, and safeguard their personal data from unauthorised access or misuse. For example, if I want to put myself forwards as a delegate for governance decisions, then I would want you to know about my job experiences and certifications that prove I have expertise in the given voting area. Whereas my asian heritage may be irrelevant and not something I need to share. This doesn’t make me any less proud of my heritage, it is simply acknowledging the parts of my identity that could hold prejudices for some people and choosing not to bring that into the discussion. Pseudonymity is not just about concealing information; it’s also about selectively disclosing the information that is relevant to the context.

Web3 identities have the power to remove the biases we are exposed to and the blockers to expression that we face when we engage from a singular all-exposing identity. Mounting evidence in psychotherapy has demonstrated that avatars and embodied virtual reality give individuals a greater freedom to experiment and can serve as a kind of R&D for our core identities. One study, for example, found that female participants were less sensitive to the effects of stereotype threat when embodying a male compared to a female avatar. I even heard someone at EthCC say that they use a 'burner twitter' to discuss field-related topics online so as not to influence the discussion with their place of work.

Now imagine taking that concept further in a web3 context, where you can have multiple identities from which you experience the world, and each is served different algorithms and can explore different ideas and test different opinions, but all the while maintaining fine grained control over your data and being able to securely prove the baselines needed for a good user experience, like proof that you’re human.

To me, this capacity for identity dispersion and contextual pseudonymity, matters not just for the sake of privacy and reducing cancel culture, but because it has the power to enable genuine diversity of thought – both in what we are exposed to and what we produce. Diversity of thought in this context refers simply to the reality that there is a multitude of ways to think about something. Which sounds obvious but many of our systems and biases prevent it.

You need to involve people from all walks of life to get a genuinely deep understanding of the problem you’re trying to solve. And those closest to the problem should also be those closest to the solution. We need to stop designing top down technology. When everyone holds different biases, we cannot assume to understand the lived experience of everyone and therefore we cannot assume to know what personal data everyone is comfortable sharing about themselves in a given context. It is very difficult to give everyone this type of identity flexibility in both the real world and the real-name web. But in Web3 we have the tools to do so. We can enable people to remove the internal and external biases that are irrelevant to a given interaction or discussion.

Much of the promise of Web3 is that it will create a ‘fairer internet’. But without diversity of thought we will continue to see our applications built in ways that prolong the existing biased and constrictive systems. We need to use tools that support self-sovereign identity and DIDs, such as SIWE, ENS, Spruce, with verifiable credentials from Disco and CyberConnect. Or governance tools, like Snapshot, which can let people vote based on their contribution to the community, not because of where they came from or how old they are. We are so early in building this internet. We have so much opportunity to create alternative systems that bring diversity of thought into the actual structures that future applications will be built upon.

I know you may be thinking you’ve heard this before. Web2 held a similar promise. The internet already dissolves physical borders and lets us access global opinions, so why is this any different? I argue that the timing to rebuild the internet in a way that better serves everyone as humans has never been more important or more possible.

If we look to the realm of privacy, the digital order is becoming ever more powerful. The mass of data tied to single individual combined with advancements in AI and quantum computing, gives unprecedented power to the technology companies. And the AI models are being trained on binary, polarised data sets, stripped of real world human complexity. Feel free to contest, but the echo chambers of Twitter sound nothing like any town square I’ve ever been in.

If we look to the world economy, more business is now taking place online than offline. The pandemic accelerated a movement to virtual working and the tools to make this possible. So if more economic activity and interactions are happening virtually, why not choose to remove the biases that we cannot remove in the real world?

I do not mean all interactions should take place online. I am the first person to encourage real-world experiences; but, if so much is already online then perhaps we have an opportunity to build alternative systems that do not necessarily go against our existing systems but go around them. Alternative systems that bring greater diversity of thought by abstracting away the biases from these interactions altogether.

We need more public representation of diversity but we also need to give people the ability to express their individual thought without self-inflicted or external biases. It is never one or the other. Real names, pseudonyms and anonymity all have their time and place. The strength as I see it, is in building an internet that gives everyone the opportunity to choose how they show up and participate in each given context.

Creating this type of environment is hard. Where do you draw the line for the level of anonymity you permit your users? What information do you actually need to make your product usable? And how can you design your platform in a way that empower your users with the greatest ownership of their identity?

There are advantages and disadvantages at all parts of the spectrum. And so it is so important to contextualise discussions of identity. For some, the baseline may just be a proof of humanity. They don’t need to know which country you were born in or what gender you were born as, simply that you hold the rights of a human. Others may need privacy preserving KYC or KYB through tools like Quadrata. Still others may just need to know you hold a membership token.

As a first step, I believe we need to rebuild the basic tools that underpin the majority of web apps in a way that enables these levels of flexibility. Tools for authentication, transactions, and communication. Tools we use every day that enable the digital economy. With email for example, our inboxes read like a diary; where we’ve been, what we’ve bought, who we’re working with, so we need to be able to own that data and own the communication for all the identities we choose to use across the internet without publicly linking those identities together. If we login with wallet we don’t want to lose the functionality that an email identifier provides in web2. We want to login with wallet and still receive communication to that identity privately and in context.

When we talk of democratising opportunity and designing a fairer internet, I think we should consider how we can bring the complexity of humanity and diversity of thought into our systems. Because a lack of diversity anywhere creates weakness. Look at monocropping; the decline of biodiversity in natural ecosystems lowers the entire ecosystems productivity, quality and ability to defend itself.

And yes it’s messier. You can’t fit everyone into neat grids, but we as humans are messy. We are complex. And it’s about time we let that complexity into our digital lives and interactions. Let diversity of thought fill the gaps between the polarisations.

So as builders and advocates of the new internet, I believe it’s not our place to dictate who or how people show up and contribute, but it is our responsibility to give them the choice.

We are used to the real-name web. We have learned to tie all of our data together.

But I would like to leave you with one question, who does that serve?

Resources and Further Reading

https://li.substack.com

A Theory of Justice for Web3

Web3 Is Our Chance to Make a Better Internet

https://sarahguo.com

When we design our identities from scratch

how avatars might help us all use the internet better

https://nftnow.com

The Problem with Anonymity in Web3 and NFTs

We spoke to a group of both doxxed and anonymous NFT community members to hear their thoughts on one of the most relevant and much-needed debates in the space.

https://www.voguebusiness.com

Shaping online avatars: Why our digital identities differ

A new research report from the Institute of Digital Fashion suggests people want more choices for diverse representation in online spaces.

Elif Shafak: The Revolutionary Power of Diverse Thought [video]

Balaji: Pseudonymous Economy [video]

Ian Bremmer: The Next Global Superpower Isn't Who You Think [video]

p.s. I have more recommendations for further reading on this topic so please feel free to reach out to me if it's of interest. And if you have any suggestions please comment them below!

We want to have our cake and eat it too. We want Web2 applications without the ever-increasing privacy issues, monopolies, and extractive-nature of them. To achieve this, we had to rebuild the underlying infrastructure and foundations of the Web. Now that we have new foundations, we can rebuild the application layer in a way that takes advantage of the functionality this infrastructure provides. Only then will we see the next critical wave of web3 applications developed and overall user adoption increase.

The case for interoperability

“Our collective capacity for sharing information and knowledge is at an all-time high. Even though in some ways it seems we have never been more divided, it also has never been more possible for individuals and organisations to work together across boundaries and create change” – David Ehrlichman, Impact Networks.

We’re here for the promise of Web3. The promise is a fairer, distributed web, made possible by blockchain technology [1]. It is a Web that supports all of the applications we need today but rebuilt with foundations that can protect user privacy, distribute appropriate value to contributors and enable digital ownership.

In less than 4 years we have seen rapid development of the foundational blockchain layers and developer tools. We have formalised new standards to increase the composability of the Web. We have built and battle-tested new primitives for governance and decentralised contribution to networks. The potential for the promise to come true is growing.

But now we have hit an adoption roadblock. The discourse has turned to ‘onboard’, and onboard in the billions.

It feels like a case of chicken and egg. End-users are attracted to the applications with the best user experience, and application-developers build where their business can access the greatest number of users. Both of these groups are absent in Web3. Why?

Web3 is composed of silos.

We found solutions to the data privacy problem, but applications can’t access data across different blockchain networks. We found solutions for users to have multiple digital identities, but the identities aren’t portable across protocols. Data silos. User silos. Network silos.

This is, in part, an interoperability problem: An inability for different blockchain systems to interact and communicate with each other. It’s a natural side effect of rapid innovation and experimentation. But it needs to be solved.

Imagine if an application developer who built on AWS was restricted to users with an Amazon account, or to Google accounts if they built on Google Cloud. Would we expect them to sacrifice one audience for another? To settle for the technical limitations of a single provider? Or build two versions? Would one cloud provider end up being the adopted technology for everyone?

Developers in Web3 should not be restricted to a subset of users or features of a single blockchain network.

1/ The number of active users in Web3 is already much lower than in Web2 and we make the pools even smaller when applications on different blockchains can’t communicate. As Marieke Flament, CEO of Near, stated, “Competing with other Web3 projects for a small pool of users is short-sighted: we need to grow the total Web3 user base” [2].

2/ The majority of Internet users do not care where their applications are hosted. We cannot expect them to adopt a more fragmented experience on the basis of a promise.

Until we fix the interoperability problem, everyone will remain separate, silo-ed, tribal, picking a blockchain, or a side. Does the future of the Web not deserve better?

Those crazy enough to build on a promise are already here. And now we need to build together.

The next layer is a common layer

My hypothesis is that the application developers will come to Web3 when they can access the market without navigating the depths of the network layers. To get there, we need an accessible common layer that any developer can easily plug into.

For those familiar with the TCP/IP model, we could say we have reached the transport layer (or in OSI terms, the session layer). The common layer we need to build would span the blockchain layer and application layer. The critical difference to TCP/IP or OSI models is the power of the blockchain layer in the Web3 stack and what it can enable at the application layer. To get there, the common layer needs to abstract away from the foundations and enable cross-chain interoperability.

What could the common layer look like?

1/ Frontends: NEAR’s newly announced Blockchain Operating System (BOS) is a great example. The BOS acts as an abstraction layer on top of all blockchains. It introduces composable frontends that are compatible with Ethereum and any other blockchain. Application developers can develop significantly faster by forking components and building from there, somewhat like an on-chain GitHub.

2/ Data layer: Applications need to be able to communicate with each other because end-users want to share data between their apps frictionlessly. The difference in Web3 is users maintain ownership of their data within the applications, they can protect their privacy and decide what is shared. The Ceramic Data Network enables this. It provides a scalable, secure, and composable platform for storing and sharing data, and is designed to be easily integrated with different applications and services.

3/ Private, portable identities: Unifying the network layers does not mean returning to a singular digital identity. A key strength of Web3 is the ability to enable identity dispersion, “where individuals control the creation, separation and unification of their multiple online selves” [3]. At the common layer, we need to build with DID technologies from the likes of SpruceID and Disco, and take advantage of Web3-native identity providers like ENS and Lens.

4/ Communication: ‘Reaching all users’ is more than making applications accessible to everyone. It also means being able to communicate with everyone. Mailchain’s communication protocol  is built to work alongside all blockchain protocols and support all Web3 identities. Its account model handles the verification of identities from different blockchains and enables those identities to safely encrypt their messages. This means that all applications can communicate with all of their users, directly and securely, regardless of the blockchain network they’re using.

It's time we all communicated more

In conclusion, Web3 has the potential to revolutionise the internet. The early days saw a race to build network foundations, tailored to different preferences but each with the same goal of a secure, decentralised Web powered by blockchain technology. Today, the adoption of Web3 faces roadblocks due to the lack of interoperability between its various components. To break these barriers, it is essential to develop a powerful, common layer that unifies the underlying infrastructure while still preserving the privacy and autonomy offered by Web3. This common layer will foster cross-chain communication, portable identities, and seamless data sharing, ultimately leading to a more inclusive, efficient, and transparent Web that serves and benefits everyone. By working together to build this common layer, we can pave the way for the next billion users.

[1] A Theory of Justice for Web3, Li Jin and Katie Parrot (May, 2022).

[2] NEAR Foundation Town Hall, Marieke Flament (April, 2023)

[3] When We Design our Identities from Scratch, Sarah Guo (January, 2022)