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Web3 and owning your data

This article looks at how web3 empowers true data ownership.

30 Jul 2021
Clock 4 min

The previous generations of the web

First, let me very quickly sum up the previous phases of the web.

Web 1.0, from the late 1980s to early 2000s, was built on open protocols managed by the community; the ‘read-only web’ where users mainly consumed static content.

Web 2.0, from the early 2000s onwards, has been marked by the centralisation of services under for-profit tech giants such as Google, Apple, Facebook, and Amazon (GAFA); the ‘read-write web’ emerges where users generate the content in a highly interactive web.

Defining web3

There is weaker consensus on how to define Web 3.0 – Web3, if you prefer the snappier spelling – than the previous two eras of the web, so I will concentrate on what I believe are the key themes defining this third generation of the web.

Web3 will be marked by decentralisation and a return to open protocols. Decentralised networks, or crypto networks, will form the means for delivery of all major services. With tokenised incentive mechanisms, interacting with apps and services by connecting crypto wallets and paying with tokens will eventually become ubiquitous.

Currently, most data is held in databases on centrally controlled servers, but on web3 platforms users will control their encrypted data on open networks. The web3 model will usher in a move away from centralised monopolies that have lost consumers’ and developers’ trust, towards permissionless and trustless models for building platforms and storing data.

Whereas web 2.0 was dependent on extracting value from users, leveraging their data against their interests, web3’s decentralised control and storage of data will fundamentally reverse this dynamic. The trustless models developed in web3 necessarily reduce risk and create a safer web, as all risk is predicated by having to trust unknown third parties.

How to own your data

High-profile scandals like Facebook–Cambridge Analytica and constant headlines of data breaches make it clear that it’s a data free-for-all in the web 2.0 world.

The move towards owning your data will happen as a logical repercussion to crypto network adoption: if no central company or server controls your data, then you will be left with control.

But what does it mean to control, or own, your data? I believe the following 3 conditions would need to be met.

  1. You own the keys to the end-to-end encryption of your data.
  2. Your data is not held on a centrally controlled server or network.
  3. Your data is permanently accessible.

Each condition can be tied to a key technological ingredient in the web3 model. Encryption, specifically end-to-end encryption, ensures the security of your data in transit and at rest. Non-custodial crypto wallets hand the keys to encrypt data and sign transactions on the blockchain to the individual. And distributed ledger technologies decentralise the control of assets and networks.

On this last point, we believe the Arweave blockchain has delivered the key ingredient necessary for true ownership of data. Not only is data stored in a decentralised manner, but it’s made permanently accessible through a perpetual and sustainable endowment mechanism. Essentially, pay once and store forever.

After all, if access to your data is dependent on having to make continued payments, how can you say you truly own this data? A counter to this would be offline hardware storage, but most people have experienced a broken, lost or obsolete hard drive and understand this is not a practical or convenient long-term solution.

Barriers to adoption

There’s not much to dislike when it comes to web3 and the world of self-sovereign data. So why are we not there already? There are a number of barriers at the technological and user experience level, that products and services will need to navigate if we’re to transition the majority of people into this brave new world.

Often the first taste of the web3 world comes when someone needs to create a crypto wallet. Many wallets are poorly designed with clunky UX and little consideration or support to those who may be going through this process for the first time.

Linked to crypto wallets, is the issue of tokenomics that often underpin web3 platforms. Exchanging a monthly subscription model for a system that takes payment through the crypto wallet in an esoteric token will instantly open up someone to a whole host of new topics and issues, such as token exchanges, transaction fess and crypto market volatility.

Performance and scalability are other critical barriers to adoption. Services need to query blockchains and wait on transactions to be mined, and when this is coupled with the decentralised deployment of critical and interdependent services, the problem of performance is compounded.

If moving from big centralised services to web3 platforms feels like swapping fibre broadband for a dial up modem, then forget about going mainstream.

Making it happen

Some argue that people don’t care about privacy or data ownership. I disagree. For every software giant there is now a plethora of thriving privacy-first alternatives. For every data breach headline awareness and distrust spreads and deepens. People need to be made the right offer and they will ditch the exploitative centralised services en masse.

Understanding what’s at stake, the potential and the barriers to adoption are all critical in creating the right conditions to facilitate this transition.

While some services will thrive in their niche by building for those already in the know – the technologically-savvy innovators – major gains will not be realised until products figure out ways to mitigate the key friction points, and start offering comparable user experiences to what people have become accustomed to.

The lessons learnt from the two decades of web 2.0 must be carried over. Show me a spinner for more than a few seconds or bury me in technical jargon and I’m gone. Effortless signups and highly performant apps are non-negotiable requisites. Creating payment options that can rival the biggest web 2.0 services in terms of simplicity and clarity will also be at the core of enabling mass adoption.

Web3 companies must step up their product and UX design, especially while the web3 infrastructure is still evolving to address the limitations around performance and scalability. All too often, cutting edge tech is wrapped in a product that feels like developers building for developers. The companies that embrace product design as much as the technology itself will be the ones who provide a bridge from the old world to the new through empathy and understanding.

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