Struggle for Web3’s soul: The future of blockchain-based identity

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The attention, one might suspect, has a lot to do with the involvement of Buterin, the blockchain’s wonderkind and well-known co-founder of the Ethereum network. But it can also be a function of the ambition and scope of the paper, which includes asking questions such as: What kind of society do we really want to live in? One that is finance-based or faith-based?

The authors explain how “non-transferrable ‘spirits’ tokens (SBTs) represent commitments, credentials and affiliations of ‘spirits’, which can encode the trust network of the real economy to establish provenance and reputation.” These SBTs appear to be somewhat blockchain-based course life, or CV, while “spirits” are basically people – or strictly speaking, individuals’ crypto wallets. However, a sol could also be an institution such as Columbia University or the Ethereum Foundation. The authors wrote:

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There is no shortage of visionary scenarios as to how Web3 might appear, but one of the latest, “Decentralized Society: Finding the Spirit of Web3” – published in mid-May by E. Glenn Weil, Pooja Ohlaver and Vitalik Buterin A paper is close SSRN has become one of the top 50 most downloaded papers on the scholarly research platform.

“Imagine a world where the souls of most participants are stored in SBT corresponding to a range of affiliations, memberships, and credentials. For example, a person may have a spirit that holds educational credentials, employment Stores sbts representing the history, or hashes of their writings or works of art.

“In their simplest form, these SBTs can be ‘self-certified,'” the authors continue, “that is how we share information about ourselves in our CVs.” But this is just scratching the surface of the possibilities:

“The true power of this tantra emerges when the SBT held by one spirit can be issued – or attested by – other spirits, who are counterparts to these relationships. These counterpart spirits can be individuals, companies, or institutions. For example, the Ethereum Foundation could be Spirit that issues SBT to souls attending a developer conference. A university could be Spirit that issues SBT to graduates. A stadium could be Spirit that issued SBT for a long time. From time to time the Dodgers issued SBT to fans.

There’s a lot to digest in the 36-page paper, which sometimes seems like a plethora of disparate ideas and solutions ranging from recovering private keys to anarchy-capitalism. But it has also received praise from critics, for describing a decentralized society that does not primarily focus on hyperintelligence, but rather “encoding social relations of trust”.

Fraser Edwards, Co-Founder and CEO of Checked – a network that supports Self-Sovereign Identity (SSI) projects – criticized Newspaper on Twitter. Nonetheless, he told Cointelegraph:

“Vitalik standing up and saying NFT [nonfungible tokens] Identification is a bad idea is a big deal. Plus, the hype is great for use cases like university degrees and certifications, as SSI has been terrible at marketing itself.

Similarly, the paper’s focus on issues such as loans being overcollateralized due to lack of usable credit ratings is “excellent,” he said.

Overall, the reaction from the crypto community, in particular, has been quite positive, co-author Weil told Cointelegraph. Weil, an economist at RadicalExchange, provided the original ideas for the paper, Ohlhewer did most of the writing, and Buterin edited the text and also wrote the cryptography section, he explained.

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According to Weil, the only real sustained pushback against the paper has come from the DID/VC (Decentralized Identifier and Verifiable Credentials) community, a subset of the self-sovereign identity movement that has been focused on blockchain-based, decentralized credentials for a few years. doing work. Now, that includes ideas like peer-to-peer credentialing.

A “lack of understanding”?

Nevertheless, the visionary work received some criticism from media outlets such as the Financial Times., Which one? Called it “eccentric paper”. Some also worried that the SBT, given its potentially public, non-transferrable properties, could lead to a Chinese-government-style “social credit system”. Others took shots personally at co-writer Buterin, criticizing his “lack of understanding of the real world”.

Crypto skeptic and author David Gerrard went even further, declaring, “Even if any of this could actually work, it would be the worst idea ever. Here’s what Buterin wanted to implement.” It is a binding permanent record for all people on the blockchain.”

Others noted that many of the anticipated SBT use cases – such as establishing origins, opening up lending markets through reputation, scaling decentralization or enabling decentralized key management – ​​are already being carried out in various sectors today. SBTs are “potentially useful,” Edwards said, “but I don’t see a use case yet where they beat existing technologies.”

Cointelegraph asked Kim Hamilton Duffy, who was interviewed two years ago for a story on decentralized digital credentials, about some of the use cases proposed in the “Soul” paper. How does that compare to the work they’re doing around digital credentials?

Duffy, now director of identity and standards at the Center Consortium, told Cointelegraph, “This is similar to my thinking and approach when I first started exploring blockchain-anchored identity claims with Blockchart.” “The risks and, accordingly, the initial use cases that I gleaned – limiting to claims of identity you are comfortable with being publicly available forever – were therefore similar.”

While the Sol paper touches on the possible approaches to the risks and challenges – such as how to handle sensitive data, how to address challenges with key and account recovery, etc. – “these solutions are harder than they initially appear. What I found was that better primitives were needed for these problems: VC and DID.”

For his part, Weil said there was no intention to claim priority with respect to the proposed use cases; Rather, it was merely to show the power of such techniques. That is, there is less paper manifesto and more research agenda. He and his associates are happy to pass credit where credit is due. “The VC community has an important role to play,” like other technologies, he told Cointelegraph.

question of credibility

But the implementation may not be that easy. Joshua Ellul, associate professor and director of the Center for Distributed Ledger Technologies at the University of Malta, asked to comment on the practicality of ventures such as “spirited tokens”, telling Cointelegraph: “The main issue is not technical, but more like many aspects. In this area, trust issues.”

As soon as an input from the outside world is required – eg, an academic degree, affiliation or verification – a question arises about the credibility of that input. “While we can increase the level of reliability of data through decentralized oracles, we must acknowledge that data is still dependent on the collective credibility of those oracles,” Ellul said.

Let’s say a university is a “spirit” that issues blockchain-based certificates to students. “People can trust Verification because they trust a centralized university that makes its public keys public,” Elul said. But then others may ask, “What’s the point of storing SBT on DLT when the university exercises this kind of control?”

Or given the idea of ​​peer-to-peer work credentials, “In the real world, would a company honor a peer-to-peer credential issued by an unknown person or entity? Or would they just rely on traditional credentials?” “

Elul told Cointelegraph that this is a matter of “shifting the mindset of trust” from centralized institutional trusts to trust networks – and that could take some time to achieve.

As soon as an input from the outside world is required – eg, an academic degree, affiliation or verification – a question arises about the credibility of that input. “While we can increase the level of reliability of data through decentralized oracles, we must acknowledge that data is still dependent on the collective credibility of those oracles,” Ellul said.

Let’s say a university is a “spirit” that issues blockchain-based certificates to students. “People can trust Verification because they trust a centralized university that makes its public keys public,” Elul said. But then others may ask, “What’s the point of storing SBT on DLT when the university exercises this kind of control?”

Or given the idea of ​​peer-to-peer work credentials, “In the real world, would a company honor a peer-to-peer credential issued by an unknown person or entity? Or would they just rely on traditional credentials?” “

Elul told Cointelegraph that this is a matter of “shifting the mindset of trust” from centralized institutional trusts to trust networks – and that could take some time to achieve.

What if you lose your private key?

The paper presents several use cases in areas where little work has been done so far, Weil told Cointelegraph. There is community recovery of a private key, The paper asks the question of what happens if someone loses their soul – that is, if they lose their private key. The authors present a recovery method that relies on an individual’s trusted relationships—that is, a community recovery model.

With such a model, “consent to recover a soul’s private key would require a member from a qualified majority (random subset) of the soul’s communities.” These consenting communities could be the issuers of the certificate (for example, universities), recently attended offline events, the last 20 people you took a picture with, or the DAOs you participate in, on paper. according.

Community recovery model for soul recovery. Source: “Decentralized Society: Finding the Soul of the Web 3”

The paper also discusses new ways of thinking about property. According to the authors, “the future of asset innovation is unlikely to be built on wholly transferable private property.” Instead, they discuss deconstructing property rights, such as allowing access to private or publicly controlled resources such as homes, cars, museums or parks.

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SBTs can provide access rights to a park or even a private backyard that are conditional and non-transferable. For example, I can count on you to enter my backyard and use it recreationally, but “That doesn’t mean I trust you to allow someone else,” paper Notes. Such a position can be easily coded in SBT, but not in NFT, which is transferable by its very nature.

Backlash against NFTs?

Inevitably, speculation is set in motion over Buterin’s motivation to add his name and reputation to such a paper. Some media outlets suggested that the Ethereum founder was looking for the next big thing to fuel the market rally, but “this doesn’t fit Vitalik’s typical approach,” Edwards said.

Buterin’s motivation could be as simple as looking for some other way to maintain and build on Ethereum’s platform dominance. Or, perhaps more likely, the impetus “could be a backlash against speculation and fraud with NFTs and seeks to reproduce them in a technology that changes the world in a positive way,” Edwards told Cointelegraph. told.

In any event, the Soul Paper shedding light on a decentralized society, or DeSok, does a positive service in the view of Edwards and others, even if SBT itself ultimately proves to be a nonstarter. In the real world, one often does not need a comprehensive, perfect solution, an improvement over what already exists, which today is centralized control of one’s data and online identity. Or, as the paper’s authors write:

“DeSoc doesn’t need to be perfect to pass the test of being admittedly non-dystopian; it just needs to be superior to the alternatives available to be a model to be explored.”