Datawallet Blockchain — Strategic Series: Article II

Abstract

This article is the second of a four-part series that explores the concept of individual sovereignty in the digital domain (Article I can be found here). Its purpose is to examine the current elements of blockchain and address issues such as blockchain adoption, capacity and usage. It will provide insights into the broad interest shown by consumers and businesses for blockchain, discuss the “web3” blockchain-related phenomenon and the financial incentives it can provide, all within the wider context of open source communities.

Data Sovereignty

To match blockchain’s growth, surrounding markets and related industries have expanded, driving innovation within their own niche, and exerting a broad impact across the fields of applied cryptography, TEEs, information security, P2P networking, and web standards. Now, blockchain is evolving beyond a simple store of value or awkward exchange mechanisms, with developers adding functionality, scalability, and performance improvements.

As a result, these new open and distributed technologies give users the opportunity for data sovereignty as well as tracking reporting requirements and account verification. The demand for these technologies has seen significant growth as users rightfully want to know what their data is being used for. Blockchain has fundamentally reduced friction across information exchange, enhanced personal privacy and, ultimately, has the potential to restore data sovereignty to users.

Decentralized Framework

The adoption of blockchain and distributed ledger technology has been met with a great variety of supporting technology that has simultaneously evolved with the blockchain industry. Despite this, distribution and adoption of blockchain related solutions are still at an earlier stage than larger existing technology platforms. For example, social media has attracted billions of users, enabled technology adoption and driven innovation across a variety of technology, businesses, and communications fields.

Even still, initial blockchain ecosystems support a growing number of applications and integrations of blockchain technology. The adoption is accelerating and set to make an even bigger impact on multiple industries as major corporations announce their support.

Fundamental areas of adoption which will help speed up this process are within decentralized applications, or dApps, which facilitate direct interaction with blockchains through supported websites. These areas of development have so far seen significant adoption within the blockchain industry, and are now expanding into mainstream use. This has created a need for ecosystem support services to meet the growing demand, with a specific focus on storing the user data created from these applications.

Web browsers have had the capability to support user key management for well over a decade. Despite this, the value of added security was difficult to communicate to users, and therefore browser developers lacked the incentive to add crypto-key features. With crypto-markets, data-sovereignty and privacy issues going main-stream, blockchain and web3 technology have created a demand from users that developers can align with. This has led to integrated crypto-key and web3 features into new web technology applications, for instance, Metamask, and even established industry innovators such as Opera browser.

As blockchain technology evolves, on-chain data is growing. Each time a dApp or smart contract is used or transacted with, it must interact with a user’s wallet to confirm the transaction. This drives demand for strong data protection practices and increases the focus on an individual’s data sovereignty. Blockchain technology has made it possible for Datawallet to create a consensual, transparent, and secure way to manage data. This will be one of the most important aspects for blockchain’s success, meaning Datawallet will be one of the most fundamentally important tools in how data is shared within the blockchain technology ecosystem — which is crucial for blockchain’s success.

Innovation In The Blockchain Industry

The blockchain industry and open source community are wide and diverse, with many developers and investors committing time and resources to their favorite projects. The “web3” blockchain phenomenon has been enriched with leading developers who have collaborated to produce web interfaces to these new Decentralized Applications. This community-led open-source development will continue to grow just as the web ecosystem of the early ’90s, bringing an exciting disruption to ripple through the technology and financial industries.

Strong innovation is manifesting through cryptocurrency wallets, which are becoming all-in-one interfaces used to access the decentralized web. Likewise, as wallets are evolving more advanced functionality, they are becoming one of the easiest ways for users to prove their identity online; providing a self-sovereign identity for users via blockchain technology. With password and identification documentation bound to the wallet, Datawallet acts like a digital passport, restoring a self-sovereign identity to the user.

We’re currently witnessing a paradigm shift towards low-energy and sustainable consensus algorithms, such as delegated proof of stake and improvements for proof of work consensus mechanisms. Not only does this fundamentally change the way blockchains work, govern themselves, and reduce network costs, it also creates knock-on effects for the legitimacy of the entire space.

Similarly, interoperability between blockchains is expanding. Projects such as Interledger, a protocol for connecting and transacting across multiple ledgers, are enhancing the way blockchains interact with each other. Furthermore, application specific blockchains, such as those on Cosmos, are building tailor-made chains for specific enterprise solutions. Which is a necessary step for the wider business adoption of blockchain technology.

Conclusion

As the blockchain industry matures, increasingly sophisticated services and technologies are emerging. These include complete solutions for managing user identities and connected services (such as exchanges or marketplaces), as well as smart contracts for executing complex business logic across decentralized applications. Likewise, the evolution of more scalable and efficient forms of distributed blockchain governance protocols has given rise to environmentally and economically sustainable blockchain technology.

Additionally, user sovereignty over the ownership and control of their personal data is a disruptive innovation now made possible by blockchain technology. This comes at a time when data breaches from centralized custodians, and misuse of user data, are at the forefront of public scrutiny. Therefore, users are more concerned than ever about how their identities are being used online.

Through projects such as Datawallet, blockchain technology empowers users with tools to control their data. At the nexus of privacy preserving and blockchain technologies, Datawallet’s vision of providing users with unprecedented and safe access to disruptive crypto-finance technology, while protecting their personal privacy, ultimately fulfills the promise of individual sovereignty in the digital domain.