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Fediverse-Takeaways
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8 Takeaways From The Fediverse: What Policymakers Should Know

We’re excited about recent developments in federated social networks, sometimes referred to as the fediverse. Meta’s incorporation of ActivityPub into its Threads platform infused a lot of momentum into the concept of decentralized, federated apps allowing for a more user-centric social media experience. Recently Flipboard federated “11,000 magazines by 400 creators” on its Flipboard app. They join Wordpress who last year created fediverse plugins allowing blogs to broadcast to “ActivityPub-compliant” platforms. 

Growth in the fediverse remains steady. Casey Newton is enthusiastic about the potential as well but admits it’s a “a long-term solution, and a partial one” at that (June 20, 2024 edition of Platformer). Nevertheless, with all this excitement about the fediverse and the possibilities it opens up, we thought we’d gather some experts to explain what this is all about and why policymakers should better understand what is happening with decentralized social media networks. 

Earlier last month Georgetown Law’s Hillary Brill led a discussion with Mike Mansick (TechDirt), Ross Schulman (Electronic Frontier Foundation), and Amy James (Web3 Working Group) on “The Fediverse And The Future Of Social Media: What Policymakers Need To Know.” We put together eight takeaways from that event (with links to the video) where they discuss everything from privacy to content moderation to antitrust safe harbors to cryptocurrencies. Read on Medium. 

8 Takeaways From The Fediverse: What Policymakers Need To Know
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Key takeaways from the DFC Domain Name Summit. 

Vint Cerf
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Vint Cerf On Smart Contracts and Web3

When asked about decentralization Vint Cerf, one of the fathers of the Internet, said smart contracts are “fascinating.” Watch below.

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Decarbonizing our Grid and our Corporations

How policymakers can help create a more efficient, effective, and equitable renewable energy credit market

Policymakers play a crucial role in fostering an efficient, effective, and equitable renewable energy credit (REC) market that accelerates the decarbonization of both the grid and corporations. By addressing the limitations of the current REC market, policymakers can unlock their full potential to encourage the transition of the electricity grid to reach carbon-free energy 24/7. This article explores key areas where improvements are needed and proposes actionable steps for policymakers to facilitate the transition to a cleaner and more sustainable energy future through REC market improvements.

Why the current REC market is lacking and how it can be improved

RECs represent the “property rights to the environmental, social, and other non-power attributes of renewable electricity generation”. RECs place a price on renewable energy generation, or 1 MWh of renewable energy. The idea was to create a global market where businesses could buy and sell renewable energy on a global scale thus allowing a corporation to take credit for renewable energy produced. Using a market structure has helped put a price on renewables and help fund new sustainable developments.

However, the market system has not reached its full potential. There are four main limitations of the current market: lack of temporal information, lack of locational information, lack of granularity of REC value (1MWh), and lack of equitability and social value accounted for.

  1. Lack of temporal information: energy produced is priced the same even when produced at different times.

Ideally, renewable energy would be used at all hours of the day and where it is needed most on the grid. Without widespread, and more efficient batteries than we have today, solar and wind cannot provide consistent renewable energy; additional resources like hydropower are interspersed, while hydrogen remains in an early growth stage.

However, with information about when renewables are being used (temporal information), companies can understand this information and better plan to reach 24/7 carbon free energy for every hour, every day, throughout the year.

Companies, as well as electric grid planners and renewable developers, can benefit from this information. Temporal information can reveal the types of renewables best suited to cover the remaining times, or gaps of renewable energy throughout the day. For example, if solar was already prevalent, perhaps an investment should prioritize batteries or other renewables to supplement renewable generation at night when the sun is not shining and there is no solar production.

Times during the day or areas where more renewables are needed can be targeted for new renewable developments. Large companies like Google can make informed investment decisions on renewables to invest in and work with developers to implement them to cover all hours of the day with renewables. In this way, companies can fully, truly decarbonize and work towards using renewable energy all the time rather than simply offsetting the attributed cost.

2. Lack of locational information: renewable generation does not have to be geographically close to the REC buyer.

Therefore, “even with a 100% match of generation to load, that consumer (in fact, all customers) will rely on the existing grid for physical energy. Thus, the physical electricity mix delivered to a renewable energy purchaser will always include generation from a mix of renewable, carbon-free, and/or non-renewable carbon emitting generators, until the entire grid is 100% renewable and non [carbon] emitting.” At any given point, the company taking credit for a REC is very likely not using all renewable energy, as there is an energy mix. So, by understanding the energy mix and what energy is being used where (and when), utilities and companies can more effectively decarbonize by creating a cleaner energy mix based on the specific location and grid load needs.

With more data, a more perfect marketplace could be created to displace the most carbon-intensive energy resources first. In this market, RECs would be valued at higher prices for replacing higher carbon-intensive resources. For example, on a very hot summer day when the electricity grid is constrained since everyone is using air conditioning if a large solar farm was able to displace a carbon-intensive coal-powered “peaker plant”, it is more valuable to the grid and the renewable energy transition and should be represented as such through the REC price.

3. Lack of granularity and flexibility within a REC value: 1MWh can be large for some players

RECs are not broken down past 1MWh. Small businesses and individuals can’t easily participate in the market since 1MWh is a somewhat large amount: it is equivalent to 1.2 months of usage of an average American home. Renewable energy projects that are smaller must be aggregated (in order to be measured in the system). Introducing the granularity of RECs, or RECs on a smaller scale, say .05MWh introduces a difficult task: a scalable market with much more trading available. However, adding in smaller, more granular RECs also opens up the market and could further incentivize small-scale renewable development. In turn, this could improve the previous points by introducing more spread-out renewables to assist in decarbonization.

4. Lack of equitability: the market does not fully account for the benefits of communities having access to renewables

Renewable energy resources are expensive, though less expensive than they used to be. They have high upfront costs, even with rebates and tax credits, but the lasting community will benefit from lower electricity bills and potentially less blackouts. Contextually, underserved communities experience more blackouts than affluent communities. With more and more solar coming online, it must be tracked and accounted for as well as accessible to all communities. The social benefits must be accounted for within the cost of a REC. For example, if a community solar project is built in an affordable income area that directly benefits the community, it is more valuable, especially if the community experiences blackouts.

Overall, the current REC market needs significantly more information to be tracked, transparency to the system, and value the pieces of the market that benefit the grid and its users.

Existing Players

There are organizations that have already had success in starting to change the REC market. Some include:

  • M-RETS is a digital platform that helps businesses match hourly consumption to renewable generation in the midwest. The system tracks renewable energy generation and records it on a traceable, digital certificate. This is the most successful and scaled granular REC case today.
  • EnergyTag is a coalition working to create standards around granular certificates, or time-based EACs, or T-EACs.
  • Powerledger’s TraceX platform uses blockchain to handle the trading of EACs
  • Solar Stewards (not currently using blockchain) is working to adding the social benefits to the price of RECs by quantifying the benefits of building renewable energy generation in income-qualified areas.

These organizations and platforms have made significant strides in showing and offering the benefits of a renewed REC marketplace. However, there are still hurdles to overcome to create a scaled, equitable, and efficient market. Primarily these challenges are:

  • Data access from utilities
  • Coordination between utilities, corporations, and renewable energy suppliers
  • Adoption and scaling of a global marketplace
  • Environmental justice and adding the social benefits to the cost of a REC

The blockchain debate

As a technology, Blockchian is very good at removing middlemen and democratizing transactions, all while keeping a transparent record. With blockchain’s ability to verify information and record transactions, blockchain-based solutions seem like a natural way to record renewable energy generation and trading of RECs (like Powerledger mentioned above). There are barriers for blockchain solutions, such as misunderstanding of blockchain technology and its perceived relationship to cryptocurrency. However, similar to many blockchain and web3 use cases, it is not about the technology behind it, but the capabilities of the technology to create the desired end result. So whether it’s blockchain or software tracking RECs, policymakers should support granular, equitable RECs.

Policymakers’ Actions and Beneficial Results

  • Provide support granular RECs through data standard requirements, encouraging use, project funding, and marketing
  • Implement further incentives or requirements for the REC market, grid operators, and companies to efficiently decarbonize
  • Assist in research and development of the most effective granular REC strategies and in helping provide standard project designs for the coordination of utilities, corporations, and renewable energy developers

Subsequent benefits:

  • Give companies large and small the capability, incentives, and tools, needed to decarbonize more effectively
  • The electricity grid will more effectively decarbonize with a truly free market where renewables are placed where they are needed in order to actually retire high emitting carbon resources like coal peaker plants
  • Help facilitate change in the electricity grid and private sector at the same time

Creating a more efficient and equitable REC marketplace, though challenging, has significant benefits. Companies want 24/7 renewable energy, and grid operators want to effectively transition to more renewable energy. A multi-faceted approach by policymakers is needed to continue to encourage these outcomes while using data-driven, granular RECs to help stakeholders reach their goals.

Sources:

  1. https://www.epa.gov/green-power-markets/renewable-energy-certificates-recs
  2. https://www.mrets.org/wp-content/uploads/2021/02/A-Path-to-Supporting-Data-Driven-Renewable-Energy-Markets-March-2021.pdf
  3. https://www.edf.org/article/too-many-blackouts-how-underserved-communities-are-making-utilities-listen
  4. https://www.mrets.org/wp-content/uploads/2021/02/A-Path-to-Supporting-Data-Driven-Renewable-Energy-Markets-March-2021.pdf
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How policymakers can ensure blockchain and Web3 will run sustainably

"How policymakers can ensure blockchain and Web3 will run sustainably"

Climate change is looming large in the minds of policymakers, industry, and the public. As we adopt more decentralized technologies, there’s been a lot of talk about blockchain’s energy usage and its sustainability feasibility.

Bitcoin, the most prominent use case of blockchain, is always at the forefront of those conversations, and for good reason. Bitcoin uses a lot of energy to process and record transactions. In 2021, it was estimated that Bitcoin’s annual energy usage reached 130 TWh which is equivalent to the entire country of Argentina (1).

The reason that Bitcoin consumes so much energy is due to its consensus mechanism, proof of work (PoW), behind Bitcoin that requires significant energy, somewhat on purpose. However, while it is the first, it is not the only mechanism that blockchains can run on, and others are much less energy intensive. A consensus mechanism refers to “the entire stack of protocols, incentives and ideas that allow a network of nodes to agree on the state of a blockchain.” (2) The mechanism used by a blockchain can tell us a lot about how much energy is used that goes into records of transactions on the blockchain, whatever the transactions the blockchain may be recording from cryptocurrencies to carbon credits to supply chain trades. This blog will dive into different types of mechanisms and explore how blockchain technologies need not follow in Bitcoin’s energy-intensive footsteps.

It is essential that less energy intensive mechanisms behind blockchains are explored and used. As blockchains become more widespread and integrated into our daily lives, we can consider their climate impact early and prevent being put in a vulnerable position. As we have with technological innovation in the past, new technologies should not be required to fit into global and country-level goals of reaching climate action — especially when it is feasible and there are options.

Consensus Mechanisms

There are two common consensus mechanisms: proof of work (PoW) and proof of stake (PoS), though there are some other emerging mechanisms being used and developed. Their differences lie in the mechanisms that validator nodes use to reach consensus.

Proof of Work

As mentioned previously, Bitcoin uses the PoW consensus mechanism. Essentially, to validate a block onto the chain validator nodes race to solve complex math problems. These math problems take about 10 minutes to solve, but as more and more people become interested in Bitcoin and other PoW blockchains, more computers will be racing to solve these problems and encourage investment in more and more computational power. This computational power requires a lot of energy for the blockchain to run and record new transactions. In this way, Bitcoin and PoW-based blockchains actually incentivize and reward unsustainable behavior.

There has been significant effort by miners (people or organizations who have validator nodes) to use renewable energy, though this could be sped up and more widely adopted with policy support and regulation.

A recent report from the white house stated, “Global electricity generation for the crypto-assets with the largest market capitalizations resulted in a combined 140 ± 30 million metric tons of carbon dioxide per year (Mt CO2/y), or about 0.3% of global annual GHG emissions.” (3) For perspective, flying from Boston to London and back emits about one ton of CO2 per passenger (4). Though .3% of emissions may seem almost minimal compared to other industries, this is already occurring with half of Bitcoin operations using renewables, and a lot more growth is expected. Policymakers must act now to further encourage renewable investments by miners.

The large investments in solar farms and other innovations being used to make Bitcoin green may even be helping the larger renewable energy transition and electrification movement (5). Additionally, the US adopting renewables will lead to more sustainable mining operations as renewable prices drop further and are more easily integrated into the grid. However, miners are investing a lot now, and policymakers should specifically target them as they are being built and invested in.

Proof of Stake

Rather than requiring validators to use energy to solve math problems, PoS requires validator nodes to stake Ethereum which can be taken away if the validator acts “dishonestly or lazily” (6).

Increasingly, more blockchains are using PoS. PoS blockchains require upward of 95% less energy than PoW networks. PoS may also be quicker, more secure, and more scalable than PoW (7).

In the midst of high energy usage criticism, Ethereum switched from PoW to PoS in September 2022. This is particularly significant considering many applications and use cases for blockchain and Web3 are being built using the ethereum blockchain. Additionally, many other prominent blockchains like Tezos use PoS.

Proof of History and Other Mechanisms

There are multiple other consensus mechanisms popping up that offer similar energy savings and scalability. They may all be useful for different projects depending on varying goals. The less energy intensive the consensus mechanism, the more sustainable. The challenge is to have a complex enough mechanism to ensure the security of the blockchain while keeping it simple enough for computers to use minimal energy. I.e. the incentive for participating must not cost high energy usage, like PoW. The answer likely lies in a compromise: use PoW only for transactions that must be extremely secure and are few and far between, while other mechanisms like PoS, which are still very secure, can take on most blockchain use cases.

Proof of History (PoH), used by Solana, uses historical data to ensure validators are not bad actors. This type of data “fingerprint” may make PoH even faster and more scalable than PoS (8).

There are many other consensus mechanisms also being explored, such as Proof of Importance (PoI), Proof of Capacity (PoC), Proof of Elapsed Time (PoET), Proof of Authority (PoA), and Proof of Activity (PoA) (9).

Conclusion and Policy Implications

As blockchain technology becomes more widely used and applications scale in web3, energy intensity is extremely important to consider. Luckily, often the more scalable consensus mechanisms are the least energy intensive.

Naturally, PoW is the most energy-intensive mechanism. Though there has still been significant progress from the mining community around acquiring renewable energy resources to power mining operations, policy should support cleaner blockchains like Ethereum (PoS) for widespread adoption and web3 development. Most blockchain-based applications in sustainability (and more broadly?) are not using Bitcoin. They may, however, support or encourage the trading of blockchain as a reward. Ethereum is set up well to host other blockchain applications and is often used for sustainability-focused goals like carbon capture, energy trading, decentralized finance, supply chain tracking, and pollution records.

Bitcoin is not going away anytime soon. Policymakers should consider standards for consistent carbon reduction measures of blockchains, ideally reaching zero in the near future to ensure the US can reach carbon targets.Additionally encouraging projects to build on top of, use, and support more sustainable cryptocurrencies can further limit Bitcoin’s energy usage. This is also an opportunity to spur more renewable investments by using the market’s excitement and funding to create large renewable hubs on the grid while also pushing energy providers to adapt to renewable loads.

Sources:

  1. https://www.gemini.com/en-US/cryptopedia/bitcoin-mining-cost-proof-of-work-crypto-mining
  2. https://ethereum.org/en/developers/docs/consensus-mechanisms/
  3. https://www.whitehouse.gov/wp-content/uploads/2022/09/09-2022-Crypto-Assets-and-Climate-Report.pdf
  4. https://climate.mit.edu/ask-mit/how-much-ton-carbon-dioxide
  5. https://bitcoinmagazine.com/culture/renewables-will-optimize-bitcoin-mining#:~:text=A%20renewable%20energy%20mix%20of,efforts%20to%20combat%20climate%20change.&text=Oct%209%2C%202022-,A%20renewable%20energy%20mix%20of%20solar%2C%20wind%20and%20hydropower%20will,efforts%20to%20combat%20climate%20change.
  6. https://ethereum.org/en/developers/docs/consensus-mechanisms/pos/#:~:text=Ethereum%20switched%20on%20its%20proof,proof%2Dof%2Dwork%20architecture.
  7. https://ethereum.org/en/developers/docs/consensus-mechanisms/pos/#:~:text=Ethereum%20switched%20on%20its%20proof,proof%2Dof%2Dwork%20architecture.
  8. https://zebpay.com/blog/what-is-proof-of-history#:~:text=Proof%20of%20History%2C%20or%20PoH,for%20example%3A%20past%20transactions).
  9. https://www.naukri.com/learning/articles/consensus-mechanisms-in-blockchain/
"How policymakers can ensure blockchain and Web3 will run sustainably"
Figure of studied platforms

Regulating Decentralized Speech: Content Policy on the Decentralized Web

A research report by Dr. Scott Babwah Brennen.

Conducting first-of-its-kind research, this report discusses the challenges of user-generated content in decentralized applications (dApps), including illegal content such as CSAM and terrorism, as well as lawful but awful content like hate speech or misinformation. Web 2’s blueprint of handling these issues is unlikely to translate into this new space and large platforms are facing new challenges of their own. How can dApp developers enforce content standards while maintaining decentralization?

This report provides an analysis of content policies and enforcement strategies in a sample of over 30 web3 dApps.

Executive Summary
Executive Summary
Download the Report
Companies Analyzed
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The Web of Privacy in web3: Part III

"The Web of Privacy in web3" Part II

The third and final part of a privacy series written by Decentralized Future Council Fellow, Gabrielle Hibbert.

Introduction

Now understanding the history of privacy in web1 and web2, and having addressed the potential of privacy in web3, part three of this blog series will focus on the technologies in web3 that provide layers of privacy and pseudonymity for the user.

Privacy enhancing technologies, henceforth referred to as their acronym “PETs,” have been around before the advent of blockchains and cryptocurrencies. Briefly speaking, privacy enhancing technologies are used to obfuscate content and metadata. While the level of efficacy of particular PETs continues to be debated, examples of PETs that users engage with are: secure messaging, anonymized networks, communication encryption software, and virtual private networks (VPNs) (Markin, et al., 2020).

However, with the rise of blockchain technology and cryptocurrencies, various PETs have been deployed in conjunction with various blockchains and their native currencies to enhance privacy. In the final installment of this series on privacy in web3, a brief primer on PETs in web3 will be explained through (i) zk-SNARKs, and (ii) the marketed increase in PETs.

Enhancing privacy on the blockchain with zk-SNARKs

One of the most popular means by which privacy preserving protocols strive to ensure an added level of privacy is through the implementation of zero-knowledge succinct non-interactive arguments of knowledge or zk-SNARKs (Banerjee, et al., 2020).. zk-SNARKs are a highly technical subject and for the purposes of this brief blog post a naive explanation of what they are and how they work will be explained.

Pioneered in 1988, zk-SNARKs are a proof construction where one can prove possession of a statement (e.g. information) without revealing anything about the specified information (e.g. “a secret”) outside of the validity of the statement. Zero Knowledge proofs can be verified in milliseconds and have the ability to transform the privacy enhancing landscape for a variety of web3 and non-web3 based technological infrastructures.

For example, zk-SNARKs have been used in a variety of web3 applications such as in Electric Coin Company’s implementation of Zcash to a newer utilization of it for the storage of off-chain data on the Ethereum Virtual Machine (zk-Rollups) to the verification of personally identifiable information (PII) such as driver’s licenses. Zero knowledge proofs provide a novel way of protecting the privacy of users while allowing the verification of their information to be conducted.

The Prevalence of PETs in Web3

The use of PETs in Web3 have exploded, where other cryptocurrencies such as Monero, Zcash, IronFish, and many others are beginning to implement variations on zk-SNARKs. Part of the reason why there are more privacy centric cryptocurrencies, tokens, and blockchains is due in part to a renewed interest in PETs. Data privacy has become an increasingly discussed topic as newer technologies are developed. As we’ve seen in the earlier iterations of this blog series, the ebb and flow of privacy consciousness has impacted and continues to impact the public’s desire for privacy in technological spaces.

Conclusion

Data privacy is a human right and should be continually fought for; especially as emerging technologies such as blockchains emerge as a new way for individuals and communities to communicate. The rise in discussion and want for privacy enhancing technologies markedly renewed with the continual misuse and brokering of personal data by the hands of prominent web2 internet companies. If we are to create a just and fair technological landscape for all, privacy and security needs to remain part of the wider conversation and research on blockchains and the decentralized web.

"The Web of Privacy in web3" Part II
The Web of Privacy in web3
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The Web of Privacy in web3: Part II

"The Web of Privacy in web3" Part II

Understanding the web of privacy in the web3 space through transaction data and the unresolved permanence of our privacy landscape

The second part of a three part profile from Decentralized Future CouncilFellow, Gabrielle Hibbert.

Introduction

In the first part of our blog series, a condensed history of the privacy landscape of web1 explained the rise of the privacy conscious movement of the cypherpunks. The cypherpunk movement partially gave way to our current cryptocurrency landscape.

Even with advances toward privacy in the web3 space, for those not closely attuned to the space, it is not easy to determine what embodies privacy. In part two of this series, the following will be explained, as it relates to blockchain: (i) the interplay of transparency and privacy and (ii) a detailed look at blockchain transaction data.

Transparency: A tenet of blockchain development

When people speak about blockchains, one of the first aspects of the technology to be mentioned besides its tamper-evidence is its transparency. One of the values embedded in many legacy 1 blockchains such as Bitcoin, is that each transaction has the ability to be audited by the public; this characteristic is what makes risk-limiting audits for voting (4) and supply chain applications more favorable than our current opaque processes.

Transparency within blockchain development is used to create accountability and a pseudo public forum for those to see what transactions are happening and when. This accountability is something that is not wholly different from how we envision functioning democracies to operate.

The privacy that we talk about on various blockchains is determined by how private individuals desire to be when they use blockchain based technologies.

Just as we mentioned before, there are different levels to privacy protocols when we speak specifically about blockchain transactions. However, the level of privacy that is afforded to all users is pseudonymity.

Pseudonymity is afforded through a hierarchical deterministic (HD) wallet (one of the most common forms of a “crypto wallet”), where the user is afforded a level of privacy through their public wallet address. This wallet address appears as a string of non-human readable alphanumeric characters (ex. 14qViLJfdGaP4EeHnDyJbEGQysnCpwk3gd). In web3, the public wallet address can be likened to an account that users create for websites in web2. However, unlike accounts in web2, your address neither shows your name nor any other personally identifiable information (PII). Due to the asymmetric encryption behind hierarchical deterministic wallets, a user can generate multiple addresses or accounts from the master key pair. One of the main functions of this is to enhance the privacy of the user. If a user has multiple addresses an outside observer cannot be certain that a specific address is tied to the master key pair. (5)

While a public address affords a level of privacy, users new to the web3 ecosystem often incorrectly believe that their transactions on various blockchains are anonymous. This idea is particularly misleading, as each transaction is subject to transparent metadata. Blockchain protocols are purposefully transparent, where all transactions can be viewed. One of the easiest ways to view blockchain transactions is through using a block explorer such as Etherscan. Essentially a block explorer is akin to viewing an air traffic control system, where users can view not only the transaction on the Ethereum blockchain, but also analytics such as the price of gas, the pricing mechanism tied to transactions.

The Metadata of a Blockchain Transaction (on a blockchain — specifically an Ethereum blockchain):

For further details, click here for the Etherscan.

What you can glean from the metadata table is the following:

  • One of my Ethereum Addresses
  • The transaction metadata

What the public cannot see:

  • Where I am located
  • Who I am (e.g., it’s not an ecommerce marketplace where my financial and personal data is stored)
  • IP address

This varies greatly from our traditional means of financial communication, and is a huge selling point for those that value financial and personal privacy. The personal details of who I am as a person are obfuscated by the transaction hashes, which provides a layer of privacy or pseudonymity that I otherwise would not have if I bought a good or service with a traditional line of credit.

Conclusion

Transactions on the blockchain provided a layer of privacy but not complete anonymity. However, there are ways in which users can add additional layers of privacy to their identity and transactions.

Privacy is often thought of as “all or nothing” where something is either private or public. In actuality and especially with blockchains and cryptocurrencies, privacy is a layered and nuanced process. In the last installment of this series, a primer on the various types of privacy enhancing technologies (PETs) used within the web3 space will be explained.

Footnotes:

4. A big caveat here is that while RLA (risk-limiting auditing) is a supported way of doing voting on the blockchain. Voting during an election using blockchain is not supported (Park, et al., 2021) for various reasons ranging from security concerns

5. In asymmetric encryption, hashing functions such as a SHA-256 (secure hashing algorithm) is used to digest an arbitrary set of information. Hashing functions only work “one-way” meaning that they are deterministic and not reversible. Therefore, an outside observer of a user’s public address cannot determine the master key from any of the extended key pairs.

"The Web of Privacy in web3" Part II

Photo by John Schnobrich on Unsplash

Privacy’s Place in Web3: Where is Privacy in the Web3 Space? Part I

"Privacy’s Place in web3" Part I

The first part in a three part profile from Decentralized Future Council, Fellow, Gabrielle Hibbert

Where is privacy in the web3 space?

Since Bitcoin’s emergence in 2008, when the pseudonymous creator, Satoshi Nakamoto published their research paper on a peer-to-peer version of electronic cash, a renewed discussion on the construction of online privacy resurfaced. However, ideas on crafting online privacy far precedes the publication of Bitcoin, with events like the political movements of the cypherpunks and an early 1890 legal briefing on the right to privacy by Samuel D. Warren and Louis D. Brandeis.

The question of privacy is neither a new phenomenon, nor one where collective consensus prevails. The forward movement of the web3 space has provided visibility to how online platforms are constructing the positive right to be anonymous(1) or pseudonymous online and fortifying peer-to-peer transactions.

In this 3 part series, I will outline how the evolution of privacy intersects directly with current discussions and new software being created for the web3 space. Both ideas are a continuously evolving phenomenon of an era that is founded on discovery and experimentation.

The growth of the internet and social networking (web1 to web2)

Pseudonymous spaces have existed online far before the advent of web3. Various protocols such as pgp (pretty good privacy) and Tor (The Onion Router), 1991 and 2002, respectively are early internet privacy protocols. While both protocols are still widely used, the conversation of online pseudonymity through encryption was still considered a fringe development in the context of the general public. During the early days of web1, the nature of the ‘internet superhighway’ itself was a marvel.

The ability to create B2B and SaS companies, and later social communities, spurred the early foundation of our current social (participatory) web2. With an estimated 52% of American adults using the internet in 2000, jumping 24 percentage points to 76% of American adults in 2010 (with the rate of adoption skewed to higher income earners)(2), an increasing number of American adults led many of the bulwark internet companies of the web2 era to collect data on its users.)

Many of the web2 platforms bequeathed the autonomy of publishing to the public with social networking platforms; which many took with gusto to publish, document, and photograph the quotidian. However, with massive scale social networking readily available — big data aggregation became the go-to strategy for many web2 companies to better understand macro trends, attitudes, and preferences. (3) Using web2 softwares to harness this data steadily eroded the very idea of online privacy for the individual. The positive freedom to be pseudonymous was replaced by the de-facto right to be mined, harvested, and aggregated into a data point.

The positive right to be anonymous or pseudonymous online

Legacy 1 web3 protocols such as Bitcoin were eclipsed by the discussions on big data collection, and the regulation needed to curtail trends in massive data collection. When Bitcoin did emerge to the general public, a renewed discussion on where our collective positive right to pseudonymity returned to the forview. Questions on how the users of the internet could interact with each other pseudonymously led to growing interest in privacy preserving internet browsers (Brave, DuckDuckGo), rising cybersecurity concerns, and a continued debate on how to control one’s personal information online.

Importantly, what many of the legacy 1 web3 protocols did was shift the narrative back on how we could collectively build a distributed, private networking future, where surveillance is not the norm. However, it has not been easy to parse out what privacy looks like for many new to the web3 ecosystem. In part II, I will dive into what privacy looks like and the forms it can take.

Conclusion

The push for more privacy preserving technologies within the web3 space was borne not only from a long tradition of research, but also from the societal reaction to current massive data collection and surveillance of web2. While the work is not done, the ways in which individuals can engage as peer-to-peer networks can prove to be more autonomous, sovereign, and pseudonymous than our current ecosystem if we build it the right way.

Footnotes:

  1. It is incredibly difficult to be completely anonymous online. Even if a user were to connect to a virtual private network (VPN) or an anonymous browser, a user’s connection to said services can still be known. This does not mean that the user’s identity is revealed, rather, their connection to these services is known. VPNs, anonymous browsers, and other privacy enhancing technologies services are still incredibly important and great at enhancing the anonymity of users online.
  2. Higher income is defined by the Pew Research Center as USD 75,000.00 (which in the year 2000 had internet adoption rates of 81%). Internet usage disaggregated by race saw 72% of english-speaking Asian Americans with the highest internet usage with 72% in the year 2000 (Pew Research Center, 2015)
  3. https://firstmonday.org/ojs/index.php/fm/article/download/3993/3269
"Privacy’s Place in web3" Part I
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