Decentralized Digital Identities Are Key to Mass Web3 Adoption

• Web3 protects users’ privacy and provides them greater control with digital identities.
• Self-Sovereign Identity (SSI) enables individuals to securely exchange digitally verified information. 

Gartner, a research & advisory firm of digital markets, stated that enterprises can expect to face the impact of decentralized identity and potential Web3 business model disruptions in the Identity and Access Management (IAM) space this year. The IAM space is becoming more like a metaverse, where major innovation in networking or computing technologies leads to new universes of IAM practices. 

The Impact of Digital Identities On Web3 Technology

In the Web2 universe, cloud computing split the web between on-premises and cloud tools, whereas the introduction of Web3 or the blockchain technology has provided a decentralized ecosystem. Decentralized identity plays a major role in Web3, and developing an identity wallet is necessary for processing transactions. Digital identity is essential in helping users manage their IDs and safely control their personal information.

The goal of Web3 is to achieve a standardized universal wallet to overtake the older Web2 technology. Gartner has defined decentralized identity as an alternative to the centralized IAM architectures. Cybersecurity technologies like the blockchain allow customers to create and control their own digital identity. Homan Farahmand, the VP analyst at the company, has favored the idea of identity wallets in the Web3 space over internet  browsing in Web2. 

Farahman also forecasted about the use of AI-enabled controls that will drive the formation of identity data engineering. He also noted the importance for emerging technologies to go mainstream by building an ecosystem. As of now major vendors have their own digital wallets based on different blockchains, which forces users to have multiple wallets. 

In Web2 technology, usernames and passwords are heavily relied on by every online service to provide access to the platform. However, this approach has resulted in security issues such as data being stored on private servers beyond user control and potential risks of hackers planting malware to steal access credentials. The rise of Web3 technology and the metaverse presents an opportunity to shift to a decentralized ecosystem. 

With the advent of Decentralized Identities (DIDs), users can have visibility and control over their data. This shift towards decentralized DIDs presents a strong alternative to the current standard. Through Nuvo, a privacy-first, decentralized credentialing and identity framework, users can mint their NuvoID which uses Soulbound (a digital identity token). 

The Soulbound tokens are added to a user’s address and cannot be sold or transferred by the user. This token helps users share their reputation with online communities and service providers. Organizations will benefit from this technology as it provides more security over users’ data, reduces costs associated with centralized identity, enables greater access to resources and enhances transparency. 

Web3 utilizes soulbound tokens as its core feature, where each user is assigned a unique hash value after signing-up.Which is linked to the wallet. This creates an unbreakable system of private, unique and immutable identities. Thus, the new system of having decentralized digital identities and credentials will be the base for the adoption of Web3 technology on a large scale. 

Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.

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