New applications of Blockchain: Future of Big Tech still bright in Web 3.0

The current web architecture, Web 2.0, may well be user-friendly and familiar, but there is plenty of indication that this formula is starting to break down, giving way to a new internet. The greatest concern about Web 2.0 has been the centralised control over data: at the moment, ‘Big Tech’ companies like Google and Facebook act as central databases for a vast amount of user information.

The advent of new technologies is allowing for decentralisation, bringing about marked disruption. In 2018, we saw the start of scrutiny over the way tech companies deal with user data. In Europe, the implementation of the General Data Protection Regulation (GDPR) in the wake of the Cambridge Analytica scandal shows that the public and authorities are sitting up and paying attention. The need for a new internet structure has never been more pressing, so on the horizon now is an environment in which users keep control over their own information: Web 3.0

Technology experts say that Web 3.0 will be powered by blockchain, as the technology is decentralised, therefore user-centric. While users are optimistic about the future of the internet, the Big Tech companies are faced with the challenge of re-inventing themselves to embrace the latest developments and focus on delivering high value and security to their users. Equipped with considerable capital and some of the finest minds in the tech workforce, these companies are uniquely positioned to make the most of the next phase of the blockchain revolution.

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In light of this shift, many technology and payment companies are working with projects to develop more sophisticated applications of blockchain. Digital identity systems and smart contracts are among the concepts being intensely explored.

A digital identity is a digital and unique representation of legal identity. As connectivity becomes wider, paper-based identities become inconvenient, inefficient and potentially unsafe. This is one of the most promising areas for blockchain application and can provide a very high use-case value.

The World Economic Forum has already highlighted the need to create a global, borderless and efficient system incorporating all factors that make up an individual’s identity in a single tool: “Today, most identity systems exist in isolation. Different public and private solutions record and maintain identical identity data potentially hundreds of times over, and are not interoperable, creating a significant amount of redundant identity information. This is a waste of resources for the network in question, is difficult to scale and is buried in error- prone and paper-heavy processes.”

Furthermore, digital identities are a far more secure alternative than the current structure. With the ending of a centralised database, breaches and cyber attacks become less frequent and less damaging. Due to the proliferation of data breaches, reliance on weak or leaked login credentials accounted for 81% of data breaches. As digital identities become more mainstream, security measures like passwords and single-factor authentication become outdated.

A blockchain-based system is needed to secure more privacy and security for individuals and corporations over sensitive data. For the next year, the GDPR compliance market will grow by 75%, leaving a huge opportunity for solution makers among the technology companies. Digital identity authentication and validation measures are critical to ensuring web and network infrastructure security in the public and private sectors.

Earlier in May, Microsoft presented a new and an even more concrete concept of digital identities: a DID network built on top of the bitcoin blockchain. Named the Identity Overlay Network (ION), the infrastructure has been reportedly developed to accommodate tens of thousands of operations per second. The system lets users obtain control over their own data via the management of their Public Key Infrastructure (PKI).

Daniel Buchner, senior program manager at Microsoft Identity Division, explained: “Today, the most common digital identifiers we use are email addresses and usernames, provided to us by apps, services, and organizations. This puts identity providers in a place of control, between us and every digital interaction in our lives. Our goal is to create a decentralized identity ecosystem where millions of organizations, billions of people, and countless devices can securely interact over an interoperable system built on standards and open source components.”

Following Microsoft, MasterCard and Samsung announced a partnership to develop secure digital identity beyond passwords. Mastercard said that consumers soon will be able to use a digital identity method for their devices that works for both physical and digital interactions. This method would be used for everything from accessing email to opening a bank account, shopping online or streaming video.

In addition to allowing the emergence of digital identities, blockchain and decentralised technologies are the keys to enabling more efficient ways of managing and integrating global supply chains, especially in the realm of smart contracts. Amazon is reportedly investing heavily in its ‘Managed Blockchain’ service, which was created to help companies set up their own blockchain networks that are scalable and easy to create and manage.

Amazon’s blockchain service is under further development and Microsoft’s digital ID is not yet fully available, but when it comes to companies like these, we can be sure that even more innovation is around the corner.

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