The Web3 alternative to state-run digital identity programmes

Over the last few years, many countries have rolled out state-run digital identity programmes – it’s been a little like the rush to launch central bank digital currencies (CBDCs), in fact. Japan, Taiwan, and Australia have been among the trailblazers with their My Number, Digital ID Card, and myGovID programmes, respectively. But looking back, none of these have been a resounding success. In fact, all of them have faced backlash and struggled to achieve meaningful adoption for two main reasons: a subpar user experience and concerns over privacy.

It may seem counterintuitive for people to be getting so up in arms about privacy when all of us habitually share our personal and financial details with so many different companies: mobile services providers, food delivery companies, travel apps, you name it. We all know that this data can be subject to breaches – in fact, we’ve had some huge ones over the last couple of years, like the AT&T hack that compromised the records of 73 million customers or Ticketmaster’s 560-million-records faux pas. 

Big Brother

Somehow, though, we tend to feel worse about governments taking control of our data –to a greater extent than they already have it, anyway. In part, it has to do with censorship. We simply don’t feel comfortable with the idea that any government could freeze our assets or otherwise persecute us if we don’t toe the line. 

It’s also to do with the incompetence with which many of these programmes have been rolled out. Take Japan’s My Number initiative, for example, where thousands of ID card numbers were linked with the wrong medical records. Meanwhile, Taiwan’s biometric Digital ID rollout was halted in 2021 due to public backlash over concerns about confidentiality and data breaches. No wonder trust in these initiatives is lacking. 

But there is an alternative – one that most governments are reluctant to explore because it takes away their control and puts it in the hands of the individual. This alternative comes from the burgeoning web3 ecosystem and consists of a combination of blockchain-based technology and a decentralised approach. The result? Real privacy for individuals and control over their data like they’ve never had before.

Zero knowledge = zero leaks

In web3, there is an entire branch of research and development that is focused specifically on decentralised digital identity. The aim is to allow individuals to meet regulatory requirements and complete identity verification, without compromising their privacy or giving away their data. And the most promising blockchain-based technology that finally makes this all possible are zero-knowledge (ZK) proofs. 

Imagine you’re going into an exclusive nightclub and they require proof that you’re of age. You don’t want to bring your passport with you due to safety concerns, and you also don’t want the bouncer to know personal details about you. With ZK proofs, you can cryptographically verify that you’re of age, without revealing any of your personal information. 

This proof of age – or any other credentials – can then be attached to a decentralized digital identity, which can be as simple as a five-letter handle. This handle alone proves that you are who you say you are, without you having to enter any personal details. You can use this to make payments, communicate with people online, prove your age, and so much more.

A digital future

This technology is not science fiction – it already exists today, it just needs to see wider adoption. In fact, zero-knowledge proofs have been a concept in cryptography for a decade, and have been widely used within the Ethereum ecosystem for a number of years now. But their potential stretches far beyond web3. 

In fact, the city of Buenos Aires recently announced the integration of ZK-proofs into its app that provides residents access to municipal services, and other Latin American nations are also exploring this possibility. The aim is to give residents more privacy and more control over their personal data. 

Why aren’t all countries using this groundbreaking technology for their digital identity programmes? Because centralized control is still more important than keeping people happy. But the more developments we see in digital identity technology, the more pressure there will be on governments across the globe to reconsider their approaches It’s only a matter of time until the web3 alternative becomes the go-to solution.  

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About the author: Alice Shikova, Marketing Lead

Alice leads marketing at SPACE ID - the only multichain name service for web3 domains and digital identities, which boasts 800k Twitter followers. For the past five years, Alice has been deeply involved in fintech and crypto, specializing in strategic marketing for DeFi projects. Alice is a co-founder of a web3 community in Lisbon, comprising some of the biggest projects in the space. Additionally, Alice was a speaker at the Blockchain Academy for United Nations employees and is a lecturer for the Women in Blockchain Africa program.

About SPACE ID

SPACE ID is a multichain web3 domain and identity platform that allows users to register, trade, and manage web3 domains from a single interface. SPACE ID also offers a SDK and API that applications can plug into their platform, bringing web3 domain infrastructure to their ecosystem, as well as a multichain service where anyone can easily create and manage their own web3 identity.

To learn more about SPACE ID, visit https://space.id/