digital identity ENS

Opinion: Web2 Has A Digital Identity Crisis. We’re Reclaiming Our Digital Sovereignty

4 min read

This article is for general information purposes only and isn’t intended to be financial product advice. You should always obtain your own independent advice before making any financial decisions. The Chainsaw and its contributors aren’t liable for any decisions based on this content.



We all have digital identities but they don’t actually belong to us. People are waking up to the fact that they don’t own the profiles they have created of themselves online and it’s causing a digital identity crisis. Web3 projects focused on decentralised identity are building the basis for the next iteration of the internet where we own digital sovereignty.

We’re at a turning point for digital identity

What does it mean to truly own your identity on the internet today? This question has become increasingly pressing as more of our life moves online. It seems like users only have two options: to have their personal data and digital identity owned by governments or big tech companies or not to exist online at all.

Of course, these are not really options and we end up letting our data and identity go to companies by default. We continue to see big tech companies exposed for using users’ private information and for their unethical data collection. Companies like Meta, Google, and Apple have near-monopoly control in their respective industries. These tech giants often build their success off each other’s data.

Take for instance Apple’s agreement with Google to set its Safari app’s default search engine to Google and funnel out valuable volumes of Apple users’ data. For this privilege, Apple is paid in the billions every year while enriching Google.

From a political standpoint, governments around the world have launched over 165 digital ID programs to connect citizens to online services that require proof of identity like Denmark’s MitID, France’s FranceConnect, and Italy’s SPID.

As forward-thinking as these seem, China is a cautionary tale of how private information can be used against individuals. The government’s social credit system and use of technology to identify and prosecute protestors is just one example.

Decentralized digital identities as a way to free ourselves

Web3, the next generation of the internet, focuses on self-expression, authentication, and ownership. We are building our own worlds online by creating an identity that can be trustless, independent, and also verifiable — a decentralised identity.

Unlike our current siloed profiles, decentralised digital identities are building the path to a universal identity designed to go everywhere with you and act as verified proof of your existence online and in the physical world.

Currently, people may feel like they own and can build a comprehensive identity across platforms. From a Google login for every website to a fully customizable profile on Twitter — there is the illusion of identity ownership.

Decentralised identity opens up new realms to write, own and control a person’s personally identifiable information without the control of a corporation or government. Identity in Web3 goes beyond a single username or email address, instead, it is linked to a user’s blockchain wallet, their NFT collection, and their social identity.

You can build your name around your wallet, your digital signature. If you decide to participate in a new community, you can move and no one can take that identity away because it only belongs to you.

Currently, suppose you get a decentralised domain name, such as a .eth name. In that case, this NFT works as your identity for multiple wallet addresses across decentralised apps — bringing your identity together across the ecosystem to one place.

For example, if a conference, party or event has an on-chain ticketing system utilising your Web3 domain name provides a quick, accessible sign-in for the ticket.

However, these promising starts to decentralised identities still need to reach their full potential. While it is frustrating to have multiple social profiles like we do in Web3 at the moment, the ease of use on each platform from Twitter to Google is a benefit.

Decentralised identities are yet to have the ease of functionality that we all expect after years of using the single-click logins of the Web2 world. This is something we need to address as we build the foundations of the internet’s future. We’re building for people, not computers.

Building our multi-layered identities online

Wallet addresses speak to the code-focused nature of the current digital identity landscape. A person’s Web3 username through their wallet comes in a 42-character address like 0x71C7656EC7ab88b098defB751B7401B5f6d8976F.

This jumble of characters is intimidating even for those who are well-versed in using crypto wallets. This address is a user’s point of entry into Web3 and to what is aimed to be the next communal hub, public square, and sector for commerce. By having an identifier that can be easily mistyped, we’re making our identities difficult and impersonal.

To create an evolution in ownership online, a human-readable, human-understandable and human-identifiable name is necessary. From birth, our name is given to us as the starting point from which we build our identifiers — we need to understand it.

By linking our confusing wallet address point of entries to a human-readable domain name, we are creating a starting point people can understand.

From this jumping-off point, we can control our presence and access it as we wish. Linking with other NFTs to create our visual image, using our wallets as the centre of our decentralised financial system, and creating hubs to make a more complete picture.

People should be able to curate multiple facets of identities for different purposes through their Web3 identity, one for trading and another for gaming. In real life, people are defined by the different social norms they are placed in — not one static caricature.

For example if you were keen to build a decentralised identity under john.eth but needed to specialise and separate it for a specific gaming community event and build out a sub-domain identity such as gaming.john.eth is a straightforward and understandable solution.

A multifaceted identity portrays the authenticity and contextual being of a person and the access you build to yourself in real life can be reflected online through the domains you build.

We need to find the best alternative

Most conversations in and around Web3 still fall into the 1s and 0s of development and trading charts of various ecosystems and coins. These are part of Web3 but there is much more to the underlying values of decentralisation, ownership and independence.

People are seeking a simple, safe and secure way to exercise control over their online lives. We need to provide them with the best, most user-friendly and most adaptable alternative.