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Web3: Incredible Advantages and Unexpected Risks

The constant rise of technology brings innovative versions of the internet, each aiming to surpass the other in terms of user-centricity, immersiveness and dynamics. As we slowly begin to migrate towards Web3, it's important to be familiar with both the benefits and the risks associated with this novel digital space.
01 Jun 2023
SelfKey
Web3 written in 3D on a modern technology background. Privacy and Data Ownership matters in Web3.
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Summary 

Throughout the past several decades, modern technology has evolved at amazing speeds, with the latest innovation being introduced as ‘Web3’. 

The purpose of these changes is to enhance the benefits that cutting-edge technology already brings us. However, as we enjoy the new technological trends, it’s important to understand the concept of Web3 at its core, with the good and the bad. 

Perhaps most individuals are accustomed to the internet in its Web2 form, because it has been the most common platform for years now. But despite its convenience and familiarity, the centralized nature of Web2 limits its capabilities. Because of this, Web3 was designed with a focus on decentralization, individuality, and security. 

These concepts align with SelfKey’s visions of a decentralized future, in which individuals may be able to exercise their SSID rights, as well as engage in a more secure, privacy-oriented environment. Web3 could be a network that may allow individuals the freedom to truly own their domains, ideas, and digital identities. 

While all of this may be true, it’s important to recognize the risks which may come with the adoption of Web3 in our daily lives. It’s no longer a secret that cybercriminals lurk at every corner of these digital spaces, with victims ranging from common folk to large, seemingly powerful systems.

Given this, it’s important for individuals to stay informed with technology’s fast-paced evolution, the advantages and especially the challenges which come with it. 

This article aims to provide a comprehensive guide on what Web3 is, how it works, the benefits it brings compared to Web2, as well as the risks. Additionally, we will discuss SelfKey’s proposed decentralized solutions which may enhance digital security as we step into Web3.

Highlights

  • An Introduction to Web3
  • Web3 Benefits and Opportunities
  • The Dark Side of Web3
  • Web3 and SelfKey
  • Conclusions

An Introduction to Web3 

Evolution is natural in many aspects of life. With modern technology, however, it’s especially beneficial when networking and artificial intelligence can considerably enhance the way society functions. Let us discover the concept of Web3, what it is, and how it can affect our daily lives.

What is Web3?

Web3, or Web 3.0, represents a new vision for the next phase of the World Wide Web. It aims to integrate principles like decentralization, blockchain advancements, and token-driven economies.

The range of emerging technologies and projects it encompasses include, but are not limited to:

  • decentralized finance (DeFi)
  • non-fungible tokens (NFTs)
  • decentralized applications (dApps)

At its core, Web3 envisions a future where individuals have greater sovereignty over their digital lives. Where trust and transparency are built into the very fabric of the internet.

Web2 to Web3: How different are they?

Web2 is the current version of the internet, encompassing all the technologies and projects people are accustomed to nowadays. While Web2 has proven to be an inclusive and dynamic form of the web, it has its limitations due to its centralized nature. In this context, Web3 aims to enhance user freedom, privacy, and security.

There are many differences between Web2 and Web3. For now, let us explore two of the most prominent aspects which set them apart: 

  • Centralization vs. Decentralization
  • Data Ownership and Privacy

Centralization vs. Decentralization

Web2 platforms and services are predominantly centralized, meaning they rely on centralized servers and intermediaries to operate. Companies like Google, Facebook, and Amazon control and manage user data and have the authority to set rules and policies. Because of this, users have limited control over their data and are dependent on these centralized entities.

Web3, on the other hand, emphasizes decentralization. It operates on peer-to-peer networks and blockchain technology, where data is distributed across multiple nodes. Users have greater control over their data and can interact directly with decentralized applications (dApps) without the need for intermediaries. Smart contracts and consensus mechanisms enable decentralized governance models where the community collectively makes decisions, instead of relying on a single authority.

Data Ownership and Privacy

In Web2, user data is often collected, stored, and controlled by centralized platforms. Users typically agree to terms and conditions that grant these platforms the right to use and monetize their data. Privacy concerns arise due to the potential for data breaches, surveillance, and unauthorized access to personal information.

Web3, on the other hand, prioritizes user ownership and control over data. With decentralized storage systems and encryption mechanisms, users may securely store and manage their own data. 

Blockchain technology provides transparency and auditability, which may reduce the risk of unauthorized manipulation or access. Users have the ability to grant and revoke access to their data on a case-by-case basis, enhancing privacy and data sovereignty.

All in all, these differences highlight the shift from a centralized and controlled web to a more decentralized, user-centric, and economically empowering Web3 ecosystem.

Web3 Benefits and Opportunities

Due to its decentralized nature, and not only, Web3 can offer a multitude of benefits and opportunities. Let’s examine a few:

  • Decentralization and Trust
  • Data Ownership and Privacy
  • Economic Empowerment
  • Interoperability and Seamless Experiences
  • Community Governance and Collaboration

Decentralization and Trust

Web3 aims to decentralize power and eliminate the need for intermediaries by leveraging blockchain technology. This can result in a more trustless and transparent online environment. Users may interact directly with each other and verify transactions without relying on centralized authorities. 

For instance, SelfKey DAO aims to be a decentralized and trustless digital environment, due to its emphasis on limited data sharing.

Data Ownership and Privacy

One thing that Web3 prioritizes is user ownership and control over personal data. This is also known as Self Sovereignty, and it aims to reduce the risk of data breaches by enabling individuals to be the sole owners of their data.

Through decentralized storage systems and encryption mechanisms, users may securely store and manage their own data. They can selectively grant access to their data and have more control over how it is used and shared. 

This shift towards user-centric data ownership may enhance privacy and empower individuals to protect their personal information.

Economic Empowerment

Another advantage of Web3 is that it introduces new economic models enabled by cryptocurrencies and tokens. This may allow individuals to participate in decentralized finance (DeFi) systems, where they can lend, borrow, and invest without relying on traditional financial intermediaries. 

Tokenization and the concept of ownership over digital assets may open new opportunities for creators, artists, and content providers to monetize their work directly. By eliminating the need for intermediaries, Web3 could potentially create more equitable economic systems.

Interoperability and Seamless Experiences

Web3 aims to promote interoperability between different blockchain networks and protocols. This means that users may seamlessly interact with various decentralized applications (dApps) and move assets across different platforms without facing barriers or restrictions. It allows for a more connected and cohesive ecosystem where users may access a wide range of services and functionalities.

To aid this, SelfKey proposes SelfKey iD as a decentralized solution which may enhance digital security as individuals operate in these platforms. 

Community Governance and Collaboration

Finally, Web3 enables decentralized governance models through mechanisms like smart contracts and decentralized autonomous organizations (DAOs). This allows users to have a say in the decision-making processes of the platforms they engage with. 

Users can participate in voting, propose changes, and contribute to the development and evolution of the platforms they use. And this fosters a sense of community ownership and collaboration, empowering users to shape the direction of the platforms and protocols they rely on.

All in all, these benefits highlight Web3’s potential to transform the internet into a more user-centric, transparent, and inclusive ecosystem. 

However, it's important to note that Web3 is still an emerging concept. Therefore, its actual realization and impact will depend on the development and adoption of relevant technologies and applications.

The Dark Side of Web3

While Web3 brings potential benefits, it also presents certain risks and challenges that need to be considered. It’s important to be aware of these challenges in order to take preventive measures and remain vigilant.

Here are five potential risks that may occur with Web3:

  • Security and Privacy Concerns
  • Bots and Maliciously-used AI
  • User Responsibility and Risks

Security and Privacy Concerns

As Web3 relies heavily on blockchain technology and decentralized systems, it introduces unique security and privacy considerations. Although blockchain is renowned for its robust security, vulnerabilities and exploits can still occur.

Additionally, decentralized storage and peer-to-peer networks may face privacy challenges. Therefore, they require careful attention to encryption, data protection, and identity management to ensure user privacy.

Bots and Maliciously-used AI

In Web3, identity and reputation systems can be compromised by bots through sybil attacks. Bots can create multiple fake identities to gain influence, voting power, or access to certain resources within decentralized networks. This can undermine the trust and fairness of the system.

Bad players can also program AI to distribute spam messages or engage in phishing attacks within decentralized communication platforms. These attacks aim to deceive users into sharing sensitive information or clicking on malicious links, compromising their security and privacy.

User Responsibility and Risks

Web3 shifts more responsibility onto users, as they have greater control over their digital assets and interactions. With increased control comes increased risk, as users are solely responsible for managing their private keys. This includes securing their wallets, and avoiding scams or fraudulent activities. 

User error or negligence can result in irreversible loss of funds or unauthorized access to personal data, necessitating heightened user awareness and education.

It is important to recognize these risks and address them proactively. One can do this through responsible development, regulatory frameworks, user education, and sustainable practices. The purpose is to maximize the promising benefits of Web3 while mitigating potential downsides.

Web3 and SelfKey

Web3 could considerably enhance the internet as we know it. Through decentralization and user-centricity, it could become a digital space in which users may engage with one another without limitations to their privacy and individuality. 

This aligns with SelfKey's focus on individuality, as well as its aim to develop decentralized solutions that may increase digital security. The goal is for individuals to enjoy the benefits Web3 may offer, without having to constantly worry about the safety of their private data.

Let’s look at a few of SelfKey’s proposed decentralized solutions which may enable individuals to operate in Web3 more securely.

Self Sovereign Identity (SSID)

SSID is an innovative method of managing online identities, which aims to put the user in control of their digital identity. 

SelfKey aims to incorporate SSID into its decentralized solutions, which may ensure that users have complete autonomy over their personal data at all times. Enabling individuals to fully own and manage their private information may significantly diminish the risks associated with data breaches and identity theft.

The absence of third-party involvement allows users to have complete visibility and control over the storage and accessibility of their data. And this may enable them to make informed decisions regarding its usage and sharing.

SelfKey DAO

SelfKey DAO aims to be a trustless and decentralized digital environment, which may enable individuals to exercise their SSID rights. By limiting the private data which they share, individuals may reduce the risk of data breaches and identity theft, and this may enable them to operate in the DAO more confidently.

Another of SelfKey DAO’s main purposes is to treat individuals with fairness, equality, and transparency. It aims to take every member’s propositions, thoughts, and opinions into consideration, to facilitate a decision-making process which is responsive to users’ needs. 

SelfKey ID

SelfKey iD was designed with SSID in mind, with a strong emphasis on digital privacy and security. Not only that, but individuals may use it for accessing both Web2 and Web3 projects and applications. 

SelfKey provides a guide on how SelfKey iD may be used for online identity verification, as well as the benefits it may bring. 

Along with increased privacy and security, SelfKey iD also aims to enable individuals to truly express themselves in current and future online spaces. By attaching a Normie to SelfKey iD as a profile picture, users may showcase their personality, hobbies, and uniqueness. 

This is to promote individuality, so that users may be able to confidently show their originality in cyberspace, without divulging sensitive or personal information. 

Conclusions

Whether we’re talking about Web2, Web3, or any other future version of the internet, it’s important to always keep privacy and security in mind. These innovative online spaces can be quite disarming due to their immersive nature and the illusion of choice when it comes to the safety of our personal data. 

For this reason, SelfKey aims to develop decentralized solutions which may offer the convenience of centralized systems, with the benefits of decentralized systems. In the meantime, it’s vital to remain informed about the potential risks, and take preventive measures to avoid putting our digital identities in danger. 

By prioritizing digital security, SelfKey strives to empower individuals to embrace technology without sacrificing the safety of their digital identity.

Stay up to date with SelfKey on Discord, Telegram, and Subscribe to the official SelfKey Newsletter to receive new information!

Note: 

We believe the information is correct as of the date stated, but we cannot guarantee its accuracy or completeness. We reserve the right not to update or modify it in the future. Please verify all information independently.

By engaging with SelfKey, you acknowledge and agree to the applicable terms and any associated risks. We recommend consulting with legal and financial professionals before participating in the SelfKey ecosystem and related transactions.

This communication is for informational purposes only. It is not legal or investment advice or service. We do not intend to offer, solicit, or recommend investment advisory services or buy, sell, or hold digital assets. We do not solicit or offer to buy or sell any financial instrument. 

This document may contain statements regarding future events based on current expectations. However, some risks and uncertainties could cause results to differ. The views expressed here were based on the information that may change if new information becomes available.

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