By Satish Mohan, Founder and CTO of Dhiway
The agreement reached by the European Union member states represents a fascinating moment in adopting Web 3.0 technologies in the delivery of governance. The government has always been a significant stakeholder in adopting new and improved technologies that provide better returns on investment in the long run. And, given the breathtaking pace at which the European Union has blended regulations, innovation and business value propositions around digital identifiers and digital wallets, it has established a playbook for other countries to assess and adapt.
The high-level illustrative description of the Web 3.0 technology architecture is simple and easy to comprehend. Issuing organizations issue high-quality digital IDs and digital identifiers to qualified holders (recipients). In turn, the holders can exchange these IDs and identifiers to acquire access to services, additional records and other benefits as they come along. It is a transformation that promises to address the gaps and trust deficiencies in existing models and replace them with low-cost, high-fidelity digital data exchange mechanisms, enabling better trust and transparency. The central element of this approach is the digital wallet. Each holder will own, manage, and secure this portable store. It will present a frictionless way to receive, store, and exchange data in the form of verifiable credentials.
Verifiable Credentials are a way to structure and package data such that it can establish the provenance – the origin of a data payload. Thus, a complete transformation into a Web 3.0 approach will bring about better data governance, improved data exchange and increased user-centricity. The holder (or recipient) of the data will have greater control over the sharing and exchanging of their data and better insights into the purpose for which data access is sought.
The “wallet as a secure store” is a temporary phenomenon. The future of user-centric dynamic data exchanges needs the wallet to be an “always-on digital assistant”. If you take a step back and think about this – the digital wallet is a piece of software that enables a secure filestore and communication protocols for exchange. The next step is to enable it with the necessary programmable capabilities to maintain “presence” on different online ecosystems and determine if the wallet user’s specific requirements are available. The framework to encode personal preferences and intents as programmable code exists, as do a growing number of online networks which offer any valid user the capability to broadcast their intents and receive responses. These capabilities, when combined, empower the user (or holder) of the wallet to unlock the intrinsic value of the credentials received and stored in the digital wallet.
Digital ecosystems are focused on enabling high-trust interactions between participants. Any engagement’s trustworthiness is built around the parties’ confidence in a transaction. And transactions emerge in contexts. Putting all these together, digital wallets can enable secure, trustworthy transactions with the contexts of “conversations”. Increasing the number of conversations between parties will enhance the credibility and reputation of the transacting parties and the platform managed in the digital ecosystem. Positive reputation and credible engagements incentivise new participants to select one platform over another and build a virtuous reference network of relationships. An “always-on digital assistant” in the form of a wallet is central to bringing about transparent, secure and tamper-resistant data exchange in systems with large numbers of participants who are broadcasting their intents and needs and seeking responses in the form of offers which meet the parameters of the broadcasts. Wallets are the plug-and-play gateway for individuals to discover and enquire about specific data streams of their interest and then confidently engage and transact with such data sources. Without a secure store capability of the wallet and the programmable transaction model, it will be challenging to have users participate in the data exchange economy.
Some challenging aspects must be addressed through design, technology and regulation. These include the capability of handling guardianship and delegation, the ability to enable digital wallets with features which make them more accessible, and the need to establish a primary set of requirements which can quantifiably measure the safety and security of a software wallet. Some of these are being actively researched and collaboratively addressed in spaces such as the Decentralized Identity Foundation, the Open Wallet Foundation, etc. The first phase of improved wallets (next-generation digital wallets) will likely be seen in 2024. They will blend the user experience of agency and control with the value delivery mechanism of programmable digital assistants. This, in turn, will give the users better control and experience with their data and vendor relationship management than we have seen before.
