Web5 explained & how it is different from self-sovereign identity (SSI)
With Jack Dorsey’s announcement of web5 right after Vitalik Buterin’s introduction of the soulbound tokens (SBTs), the decentralised web has been buzzing and making waves in the mainstream media. Although these are two separate announcements, both have driven considerable attention to the decentralised digital identity technology – self-sovereign identity, which, we argue, has been repackaged as web5. Here’s how.
First things first, Web5 has been introduced by TBD – Block’s decentralised arm – and defined as “a Decentralized Web Platform that enables developers to leverage Decentralized Identifiers, Verifiable Credentials, and Decentralized Web Nodes to write Decentralized Web Apps, returning ownership and control over identity and data to individuals”.
In practice, this means that TBD are developing a platform or a protocol where various applications or solutions can be built. Users of these applications will be able to own and control their personal data rather than giving their data ownership to any centralised systems.
Web5 main use cases are around controlling your identity and owning your data.
Let’s get the elephant out of the room – have we missed web4? Nope, we haven’t; web5 appeared as a sum of web2 and web3 with an idea of taking the best from those two worlds. Also, the number ‘four (4)’ in Mandarin is phonetically similar (albeit tonally different) to the word ‘death’. But whether this played a role or didn’t is only an assumption.
Each of the components (see the image) has many implementations ranging from SpruceID through to Evernym (now part of Avast) – cheqd partner.
Importantly, looking at the requirements, three pillars to enabling the web5 vision are DID (Decentralised Identifiers) and Verifiable Credentials (VC), as well as Decentralised Web Nodes.
Just briefly, Decentralised Identifiers and Verifiable Credentials work in tandem as the foundations of Decentralised Identity to ensure data can be trusted (read more on trusted data). DIDs act as a form of digital stamp or hologram, making it possible to check the authenticity of the information, whilst VCs contain the very information itself that needs to be checked and verified .
Decentralised web nodes are essentially decentralised file storage focused around an individual that can be in multiple different shapes. They’re equivalent to the wallets most people are talking about. According to the Decentralized Identity Foundation, these are a “mesh-like datastore construction that enables an entity to operate multiple nodes that sync to the same state across one another, enabling the owning entity to secure, manage, and transact their data with others without reliance on location or provider-specific infrastructure, interfaces, or routing mechanisms”. Unlike digital wallets, they offer unlimited file storage. However, you’d be surprised to know that a number of companies are already developing similar solutions – Verida, Spruce, Walt.id. For instance, Verida – a multi-chain protocol for interoperable database storage and messaging built on decentralised identity – is tackling this porting issue directly.
The SSI SDK and SSI service (SDK wrapped into a web service) provide the software and tooling to issue and proof Verifiable Credentials as well as manage all of the supporting SSI capabilities such as DIDs, schemas and revocation.
Now, this inevitably brings us to a question – how is web5 different from self-sovereign identity? Based on the review of it above, we see hardly any differences.
As we’ve fleshed out web5, let’s look at self-sovereign identity (SSI).
SSI is a method of identity that centres the control of information around the user. It safeguards privacy by removing the need to store personal information entirely on a central database and gives individuals greater control over what information they share. Unlike the existing system, it’s a user-centric and user-controlled approach to exchanging authentic and digitally signed information in a much more secure way. Essentially, web5 use cases around identity and data ownership are already what SSI is all about.
Let’s delve into the technical aspects of SSI. Guess what three pillars are integral to the Decentralised Identity/SSI space? Yes, you got that right, the same three – DIDs, VCs and blockchain technology (used with SSI as a Verifiable Data Registry). Although for decentralised identity, blockchain is not necessarily required, it is typically one of the best places to store DIDs due to its persistence and such. It does offer some significant advantages in further improving the level of trust, transparency and the overall efficiencies required for it to flourish.
Web5 vs SSI
SSI has historically been focused around identity data, i.e. driving licence, identity documents and others. Web5 potentially widens the data being considered from identity data to any other trusted (also referred to as authentic) data. This could even include tweets from a certain account to prove they came from the right place or any other data, which requires any level of authenticity and trust.
Also, the technology for each of them is pretty much identical – both have ledgers, storage (wallet or decentralised web nodes) and SDKs for issuing and consuming credentials.
Judging from the above, we arrive at the conclusion that web5 could be considered a repackaged SSI. As our co-founder, Ankur Banerjee, noted, “self-sovereign identity” is a *terrible* phrase to explain the concept to a general audience”. What web5 did is it has “sparked an *interest* outside usual decentralised identity and/ or SSI circles and notably among the very mainstream press and media.
Although both do exactly the same thing from a technical perspective, one can argue that web5 could be a bigger ecosystem. While SSI has traditionally been mostly focused on high-security data (i.e. ID, date of birth, passports etc), web5 can also encompass low-security data (i.e. your social media data).
Part of Block’s vision is that anyone can easily own and transfer their, for instance, social media data from one platform to another. Yes, we can export our data from Instagram today, but Meta will still keep those records in their centralised database. Plus, the data one would export isn’t very usable – you won’t be able to upload it to, say, Twitter.
Finally, one thing worth considering is how web5 is going to address the financial incentives for companies to give users their data, as this is a vital element ensuring its adoption. We, at cheqd, addressed the incentivisation issue with the SSI flywheel adoption, but that’s another story.
Read more about business models of identity here.
Secure. Monetised. Open-source.
Our secure network enables individuals and organisations to take full control of their data while providing a payment rail, that allows companies to create new and different business models. Through our network, anyone can verify identities quickly and securely.
We help companies monetise self-sovereign identity to stay viable, profitable, and successful. Issuers of data benefit from a recurring revenue stream whenever that data is used in the future without needing to process it constantly. And, data recipients can lower their costs since any data they receive is digital, trustable and reusable, reducing the processing overhead.
We built this core on blockchain technology, as we believe no single company should control such critical Web infrastructure. For the same reason, we believe it is important to open source the critical parts of our technology and contribute back to the community. Further, we have carried this philosophy into the governance of the network.
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“You can’t have Web 3.0 without a form of decentralised identity that works at scale and has a business model for network participants hardcoded into it. That’s why we firmly believe in cheqd’s mission as they enable SSI.”
CEO at Outlier Ventures
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