Writing The Alternative Stack

Decentralised Identity: We Are More Than Our Finances

Mainstream media has always been enamoured by the Web3 space due to the the multi-million dollar ape images and multi-billion dollar crashes. Critics have rightly pointed out that cryptocurrencies are currently susceptible to the same corrupting forces of capital which define the very structures which Web3 was supposed to replace. Without a way to coordinate non-financially, the decentralised web will inevitably drift towards hyper-financialisation which does not bode well for the future of a more equitable internet.

Even as blockchain governance moves toward more decentralised structures such as DAOs, the fact remains that capital is still the foundation upon which decisions are made. In today’s heavily capital based governance, the more network value you own, the more you are able to determine the network’s future growth. Viewed from the perspective of capital, this seems fair but it is crucial to remember that we are more than just our finances.

Monetary value remains the sole form of coordination in the Web3 space as it sidesteps the complexities of an identity and the accompanying social relationships. Trust is not required as long as you are able to show me the money (be it in fiat or crypto). To date, this has worked really well with DeFi enabling end users to recapture billions of dollars of value previously reserved for the middlemen but ultimately, this value is still limited to finance. By definition, finance plays a supporting role greasing the gears of real value.

However, just like in real life, there are many shared experiences which can not be reliably quantified:

  • The immense depth of knowledge and intelligence of real experts in the space. The most competent people need not be the most well-rewarded nor the richest. This is especially so when comparing across domains with varying cash flows.
  • The camaraderie built between strangers as part of building towards a shared goal. Those that contribute the most are recognised by their peers but not necessarily financially rewarded. This participation in a community is not something that can be transferred.
  • The joy and fulfilment from having inspiring conversations with like-minded people. Quantifying these conversation between friends just takes away from the whole experience.

Many tech platforms have built their businesses upon bringing exactly the above experiences into the digital realm. Ed-tech platforms such as Udemy, Masterclass, and Skillshare have significantly expanded the knowledge base of the curious (myself included). Community forums such as Reddit, Quora, and Stackoverflow survives on the exchange of free internet points (guilty as charged). Social media platforms such as Facebook, Instagram, and TikTok allow friends to easily connect seamlessly regardless of time and space (no friends so N/A).

If it ain’t broken why fix it?

Vadim Bogulov

Currently, bringing these shared experiences into the digital realm requires giving up ownership of our own digital identities to each and every platform. Moreover, the richness of our social relationships are also not our own as it is proprietary data to be monetised by the platform. Privacy in the current environment is a false choice with so much metadata being generated and with the misalignment of incentives for profit generation. In other words, are we really giving up ownership of our own digital identity because we want to or because we currently do not have a better alternative?

Decentralised identity is one of the most promising options addressing this dilemma. Instead of having to second guess the marketing claims of “privacy-focused” companies with clear conflict of interests, it is about not having to hand over ownership of your own personal data in the first place.

Just like in real life, decentralised identity is about owning your own social relationships without the need for a middleman. As such, this makes it possible for relationships to form without having to attach a number to each of our digital interactions. Trust can be built through shared experiences and connections instead of transferring something of value. Coupled with the hyper-connectivity of the web, network effects will set the stage for tremendous value to be realised through new and novel connections.

Decentralised Identity Shorts: