Our digital identity is increasingly important on the Internet. In an age where our smartphones have almost become an extension of our arms, opening Instagram, Tik Tok or Twitter apps has become an everyday activity.
Digital identity has been one of the main issues of concern in recent times. Web2 has bridged the gap between online and offline life. We live in an era where the Internet experience is fully integrated and designed to be as personalized and targeted as possible.
Web3 and the era of decentralization
Much of what happens on the Internet is ready to be decentralized. Chat and messaging services are encrypted, browsing, and banking transactions. The system is increasingly focused on being controlled by the user.
On Web3, users will use crypto wallets in the metaverse to play games, purchase NFT collections, or do business. Crypto wallets will be connected to everything users do on the internet. A user’s crypto wallet will be used to access domains, real estate, NFTs, and other virtual properties. An example of the importance that wallets are expected to have in the future are companies that are already developing ways to solve possible wallet losses.
The future of wallets
In the context of blockchain and Web3, a “wallet” is a cryptographic key management system that doubles as a user interface allowing the user to interact with network applications and services by reading and/or modifying the state of the blockchain. When a transaction is made on the blockchain tokens are not “sent” from a wallet to someone else’s wallet. A private key is used to sign a transaction and transmit it to the entire blockchain network. Only after the network validates the transaction will it be executed, and then this change will be reflected in the updated balances.
In Web3, identity works very differently from what we are used to today. In Web2 our identities are tied to some centralized provider, which almost always requires users to hand over confidential and personal information. Examples of such identities are Google, Facebook, and Twitter accounts.
In Web3, you simply link your wallet to a decentralized application (dApp) to be able to interact with it. And unlike Web2 authentication methods, wallet addresses are pseudonymous by default. If a user chooses to connect the same wallet with multiple dApps, the pseudonymous identity can be easily transferable between those dApps, which means that over time the user can build up a sort of portable reputation, even without having to reveal personal information.
As more aspects of our lives go through Web3, our identities will become more intertwined with the content of our wallets. For this reason, having a portable, privacy-preserving, and secure digital identity will be crucial.
The future of domain buying and digital identity will combine a mindset of collective benefit with individual ownership. This will revolutionize the way we identify ourselves online. Users will become owners of a domain name and this can become their portfolio name. In this way, we could ask a friend to pay us the restaurant bill from the previous night, and to receive it we only need to share our “last name.first name.eth”, for example.
These changes will ultimately result in immutable proof of identity on the blockchain. Once a user acquires a property, be it a domain or an NFT, they will own it; no organization will be able to take away that property.
This will revolutionize the way we identify ourselves online. Many of the additional steps required in the Web2 ownership and identification processes will become unnecessary.