The third version of the Internet, Web3, disrupts the identity verification paradigm. Today, we operate in a world of centralized services. For most online transactions, we go through an intermediary who, among other things, authenticates our legitimacy, citizenship, financial health and other relevant characteristics.
Web3 changes all that. Dominated by open source technology, Web3 will leverage distributed architecture, or blockchain, to make the internet trustless and permissionless. In the metaverse, virtual reality platforms built on the principles of Web3 decentralization will give citizens direct access to anything they want without an intermediary.
What relationship with public services? In the metaverse, full control over how identity is expressed, seen, and verified rests with the settlor. Users will decide which entities can “see” them, how many of them they can see, for what purposes, and for how long. When this happens, all old intermediaries, including government agencies, will be forced to adapt new processes.
3 developing trends to explore today
To prepare for this decentralized future, agencies should begin to study and explore the following possibilities:
- Evolution of authentication methods. Web1 primarily relied on passwords to access online experiences; Web2 added new methods, such as two-factor authentication and OAuth (e.g. “Sign in with Google”). Web3 techniques will likely rely on blockchain technology to admit people – or more realistically, their avatars – into virtual experiences. These experiences can range from applying for a student loan to attending a local town hall. The use, storage and sharing of self-sovereign identity are rapidly evolving concepts to study.
- Crypto transactions. Some agencies, especially those operating in the lending space, are already familiar with many of the gateways to cryptocurrency transactions thanks to longstanding regulations designed to prevent abusive payments. That said, the coin is just one example of what is sure to be many crypto-based assets in the future, including tokenized ballots. Already, we are seeing local governments testing blockchain technology for mobile voting.
- Virtual experiences. In the metaverse, users are no longer in front of a screen; they are inside. It’s quite complex to verify identities in a Web2 world. Fraudsters, scammers, and even well-meaning innovators who lack adequate data security and privacy controls pose new threats to personally identifiable information. Layer on Web3’s self-sovereign identities, and the need for next-level education and hyper-personalized protection becomes clear.
Web3 is not that far away
If Web3 seems too distant for resource allocation today, consider how fast things are moving. Many virtual concepts and systems that will support the metaverse have been democratized during the pandemic’s work and school shutdowns. Students, citizens and workers have participated in this online ecosystem more fully than anyone could have anticipated. Sometimes they did it safely; sometimes not. Identity data is extremely vulnerable in the wild lands of hybrid interaction.
It’s also worth taking the time to investigate some of today’s new Web3 vendors. They may be remembered like lightning in the virtual panorama, but others could become the Google or the Amazon of tomorrow.
Studying and exploring these vendors and their technologies will be different for each agency. However, the goal should be to get as much touch experience as possible. Sign up for a digital wallet and transact with cryptocurrency. Try a virtual reality headset and play with avatars. Engage legacy identity experts and self-taught metaverse developers to brainstorm early use cases and technologies an agency could integrate now.
Wherever possible, constituents should be included in the search. By exploring Web3 and engaging voters on this journey, confidence in a collective readiness for the next iteration of the Internet will undoubtedly increase. In a world where the possibilities are endless, every dream can be realized, and every fiction feels like reality, trust will become every agency’s most critical asset.
Al Pascual is SVP, Enterprise Risk Solutions for Sontiq, a TransUnion company.
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