Tue Nov 22 2022
The Web3 industry has seen tremendous growth in recent years. Decentralized Finance (Defi), Non-Fungible Tokens (NFTs), Decentralized Autonomous Organizations (DAOs), etc. have received a lot of media attention and funding. Moreover, these sectors will continue to grow in the future. But behind these concepts lies an interesting and exciting notion of Web3 identity. Her Web3 identity for users is fundamental to Web3 development and a whole space to realize the full potential of decentralization. So, in this blog, we'll explore everything you need to know about Web3 IDs.
Meaning of Self-Sovereign Identity (SSI)
SSI (Self-Sovereign Identities) provides centralized control over information about users entirely. Ultimately, this is in line with the core ideas of Web3. SSI eliminates the need to store personal information on central servers and databases. Instead, individuals control the information they share, ensuring a higher level of privacy. represents. An ecosystem where an individual has her Web3 ID is very beneficial for business. First, you can greatly improve the UX (user experience) by allowing your users to use the same credentials on multiple different platforms. This eliminates the need to have multiple credentials for different websites.
Plus, it eliminates friction during onboarding. This way, users can access the service with the click of a button without having to log in. This shows that corporate services are becoming more accessible to all users. Not only does it have the potential to expand your business, but it also contributes to a more seamless user experience.
Now that we understand what Web3 identities and SSI are and why they are important to the Web3 ecosystem, let's take a closer look at how to implement authentication mechanisms for these virtual identities.
What tangible possibilities does SSI technology offer for web3 applications?
A crypto wallet with SSI functionality could hold the identity of a game avatar, for example. This allows players to use their experience in one game to gain an advantage in other games. You can also imagine using this avatar in a metaverse or real-world setting. Game developers could also create a much better character than simply carrying an artifact as her NFT.
The same wallet can be used to run marketing promotions with real brands and increase traffic on the platform. Wallets can contain discount coupons to attract new players. It can also be used as a loyalty card (VIP card) support to increase brand loyalty. Discounts on purchases of in-game artifacts. Coupons are transferred to your real-world crypto wallet via a simple scan.
Coupons are then transferred to the platform while your wallet is synced with the game, enhancing your real-world benefits. It is a decentralized affiliate program that respects privacy as users always decide what data is transferred and to whom. You can also ask the user for information at login. Suppose they have a verifiable credential "Over18" in their wallet, or a KYC created and issued as a verifiable credential on a partner's platform.
In this case, you can send these credentials to your decentralized application to secure access to your application. Ultimately, in many cases, SSI's first contribution is to tie user data to their cryptocurrency wallet accounts through cryptography. This mapping around the same blockchain address allows for automated user onboarding.
We guarantee that the data transferred is what was used for the crypto exchange. A second contribution is the use of crypto wallets as a storage medium for user data that cannot be easily managed in a decentralized environment or to allow decentralized applications to be used in different domains, or simply to make it more secure. This is what I want to leave to A third contribution is the use of data representation standards that allow machines to share and process information.
Examples of using Web3 Identity
Now that we've covered the possibilities of SSI identity which is the easiest way to validate a user's Web3 identity, let's move on and take a closer look at potential use cases for these identities. There are many use cases for Web3 IDs, and anything related to decentralization welcomes Web3 IDs with open arms.
Examples include NFTs, metaverses, games, and peer-to-peer transactions. Therefore, it is suggested that the open standards and interoperability of Web3 ID will play an important role in further promoting the multi-chain ecosystem. Therefore, to fully understand the Web3 identity and its role within the Web3 ecosystem, we will consider some potential use cases. Start with NFT!
Web3 IDs: NFTs – Within the NFT sector, Web3 IDs help prove the creator, owner, and current owner of NFTs throughout their lifecycle. Additionally, Web3 IDs are useful when building NFT-gated websites. These are his websites that require users to authenticate themselves and possess at least one token from a particular NFT collection to access blocked content.
Web3 Identity: Gaming – Gaming is an exciting area of applications. This space allows you to mix and match NFTs, Web3 IDs, and games to make them your own. This combination can bring new experiences to gamers. NFTs are ideal for capturing rarity and uniqueness, while Web3 IDs are great for storing features. Especially if the trait is player-specific.
Web3 Identity: The Metaverse - In the gaming industry and beyond, an auditable and interoperable Web3 identity is essential to the metaverse and a complete user experience. This applies at multiple levels, from user profiling to transactions within the metaverse to avatar/asset creation, purchases, and movement.
SSI in Web3 and its Challenges
SSI is a disruptive platform to address global digital identity challenges spanning authentication, authorization, key management, fragmented identity systems, regulatory standards, separable physical and digital identities, and privacy and security issues. approach. SSI effectively supports Web3 principles by giving users more control over their personal information, but it still has important limitations to address. Limitations of currently available SSI systems/solutions:
The biggest problem with SSI systems is key management. In most cases, the key is stored on the user's device and the user is responsible for managing it securely. The complex verification process for KYC/AML
Verifying self-sovereign identity for KYC and AML purposes is very complex. Nevertheless, it comes with high costs, discouraging adoption.
Another major problem with SSI is that it is ultimately locked to the device on which the user created the account to provide absolute privacy and security to the user. If a user loses their device, they also lose their identity.
SSI uses an identity metasystem that allows a user to verify her identity on multiple platforms, provided that they use the same metasystem on multiple platforms. However, SSI is not interoperable across multiple blockchains and decentralized applications are built on top of it, which is a major obstacle to the widespread adoption of SSI.
Due to all the above limitations, SSI is not yet widely adopted among average users. And this directly affects Web3.
The SSI solution from Reveation Labs improves user experience while maintaining security. The underlying destructive Phantom Key Management Protocol manages keys without storing them anywhere on the device or server, allowing end users to maintain autonomy and control over their private keys.
The Web3 landscape needs a revolution that includes removing UX barriers such as wallet extensions, lengthy logins, seed phrases, popups displayed on every transaction, and PKI management. Many private key management systems that prioritize user experience succeed at the cost of less security.
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