Identity in a Web3 world, according to NFT3 CEO/Founder Dylan Dewdney
Identity is going to be an important concept to tackle in a Web3 world. We’re so used to identity being tied to who we are in the real world, but it can take many shapes and forms. Identity can be a character you create, an achievement you’ve obtained, a wallet you own, group associations you have, and so on. I had a chance to speak with Dylan Dewdney, Founder and CEO of NFT3 - one of the companies tackling the challenge of identity in Web3.
How did you come to work on NFT3?
I lead a project called Kylin Network, which I took from idea to implementation over the last year and a half. Kylin is about the idea that you can validate all sorts of data in the same way that Chainlink validates price feeding data.
In that context, I started forming ideas around what the future might look like. If we were going to have decentralized data marketplaces, there would be to some extent private custody of data — some sort of P2P orientation of individuals and their data. Ideas about decentralized identity had been born out of this understanding that there needed to be a common referent for people’s data and entities’ data. That was the beginning of seeing that a decentralized identity layer was absolutely essential.
Looking back, my initial idea was a little naive and ignorant, but nevertheless intuitive. It was around the time NFTs were starting to find their footing, and what I understood at that time was that NFTs are really unique and so are people. So I thought: Let’s put those two things together!
I validated it with a working group over three or four months, including with Evin McMullen, who would become our chief advisor. She said it was a terrible idea because it’s immutable, and you don’t want PII (personally identifiable information) on an immutable blockchain. But something really interesting about NFTs is that they have these utility properties, like being able to accrue reputation, that you might want to think about in concert with a more important technology, which is decentralized identifiers, or DIDs.
That’s where we’re building. In my opinion, decentralized identity is as important as the innovation of blockchain.
How would you describe DIDs and how they function?
DIDs are like any unique identifier in the sense that you go on a website and are given a unique identifier to be able to catalog and coordinate your information and data.
The thing to take away generally about DIDs is that they conceivably allow you to attach an identifier to yourself that you can take across a variety of different contexts, Web2 or Web3. If DIDs were incorporated as a standard across Web2 or Web3, a person would be able to mark their data journey, and it would always reference back to their decentralized identifier. You take the siloed identifiers that we have right now, and you could potentially distill them down to a single decentralized identifier that you have some measure of control over.
This allows some cool ideas around different efficiencies and use cases in a Web3 context. You could have interesting personal capitalizations as a result of sharing your decentralized identifier. It upends the basic business model of the internet with Web2, which is that you are the product and your data will be sold to advertisers. That value creation, ostensibly, will head back to individuals under Web3.
This is the crux of why people are interested in the metaverse. It’s not about AR or VR. It’s about flipping the business model of the internet on its head.
How should people building Web3 products think about these identifiers?
It’s a really new sort of technology. Only last year was it approved by the World Wide Web Consortium (W3C) as a standard. And only in the last three or four months have you been able to click a button and create a DID — previously you had to do a lot of coding for that.
New projects need to understand that if they’re not thinking about decentralized identifiers endogenously, then they need to think about connecting with projects that are working with decentralized identifiers. Think about researching DIDs, think about how DIDs will be incorporated into Web3, because they certainly will be. In my opinion, people will be clamoring to make sure they have an identifier to marry different Web3 experiences in a few years.
Tell me about the first product you’re rolling out?
The first MVP (minimum viable product) that we’re doing is something very simple and executable, which is validated airdropping. There’s a problem of bot-generated wallet addresses — how do you assess the realness of users? We have an interesting way to assess realness, which is that they stake a certain amount of a token, which gives them value underneath the DID, and that gives some assurance to our partners that they’re airdropping to real users. On the other side, the users become part of our network and have access to other airdrops.
This is a limited but achievable use case that consumers understand, especially if they’re somewhat versed in crypto. Come for the airdrops, stay for the decentralized identity narrative.
We have all these forms of identity. How important do you think real world identity is relative to anonymously proven identity?
I think we already have a hybrid identity model within our current experience of the internet. If you have an Instagram or Twitter handle that’s very popular, you’re deriving some benefit and value from it already, and to some extent it’s related to your real life identity because you have to get onto that account from your laptop at home. You have to verify yourself to some degree to use these platforms.
The huge difference in Web3 is that you’ll be able to leverage the value of a pseudonymous identity or anonymous identity, or a combination of all three, through the use of decentralized identifiers with verifiable credentials.
You can do some really interesting things with verifiable credential attestations that are off-chain. Subway sandwiches could give me a verifiable credential that says I’ve eaten 1,000 sandwiches — you can have that credential as a proof on-chain that’s associated with your decentralized identifier. You can think of your DID as a backpack where you add verifiable credentials. Over time, there will be enough history, accruals, credentials, and value staked that will culminate in what is almost an improbability that you are not real.
I think it will be similar to today, where we can assume different identities, but you can superpower an anonymous identity with a badge that says you have, say, KYC (know your customer) attestation. You don’t know their PII, but we know that some company has provided their attestation.
You can do this with a million other things. You can verify that a person has a Harvard degree, or has taken a blockchain course. You can verify that someone spent a year working with us, and we’d give a green light recommendation for anyone who wants to work with them. These are the new efficiencies that we’re going to see.
NYC Web3 Meetups
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Hi, I’m Andrew Chang - I created the Web3 Roundup to share what I’m learning in this space. I’ve spent my career at the forefront of the technology industry in areas such as crypto/blockchain (Former COO @ Paxos, co-founding partner of Liberty City Ventures), video and adtech. I learn by meeting with founders, investors and other thought leaders and approach Web3 with the same enthusiasm – and skepticism – I had about crypto/blockchain technologies 10 years ago.
You can connect with me on LinkedIn or Twitter (@DigitalDrex)