Thinking Differently (Part 2): The Virtual You

This is the second installment of "Thinking Differently in the Web3 Era," a series of articles aimed at sparking fresh insights and innovative solutions to some of the most pressing challenges of the digital age.

In "The Digital Economy ," in 1994, I hoped that the Internet would be a beacon of freedom—a platform that would empower individuals in their pursuit of life, liberty, and happiness. I also warned about several “dark side” dangers.? The first potential problem I wrote about was that our data could be captured by powerful forces and we could “lose our privacy irrevocably.”

Thirty years later, and this is precisely what happened.? Today we live in a world of what I’ve called "digital feudalism," in which a select group of "digital landlords" holds dominion over our most valuable asset in the digital age—our data.

This reality has led to the concentration of power and wealth in the hands of a few tech giants who act as the gatekeepers of our digital identities. These conglomerates, with their vast data repositories, have amassed unprecedented influence and financial clout. In the United States, just eleven companies represent more than half the value of all listed companies on the NASDAQ 100.

The crux of the issue lies in how these digital landlords exploit our personal data for profit—often without our explicit consent or adequate compensation. By aggregating and analyzing our digital footprints, they tailor products, services, and advertisements to manipulate our behaviors and preferences. In doing so, they erode our privacy and siphon away value that rightfully belongs to us—the creators of this data.

With the emergence of AI, our data has become even more potent. AI algorithms, fueled by our data, have the capacity to predict our actions, influence our decisions, and shape our lives in ways that were previously unimaginable. This raises profound concerns about autonomy, agency, and the erosion of individual freedoms in the digital age.

The Old Solution: We Need Governments to Protect Our Privacy

The traditional approach to addressing the issue of digital feudalism, particularly concerning the exploitation of personal data and privacy, has often centered around government intervention and the enactment of regulatory measures.

Regulations such as the General Data Protection Regulation (GDPR) implemented by the European Union (EU) provide individuals with greater control over their personal data, including the right to access, modify, and erase their information held by companies and organizations. Additionally, GDPR mandates that businesses obtain explicit consent before collecting and processing personal data, and imposes strict penalties for non-compliance, including hefty fines of up to 4% of a company's global annual revenue.

The primary objective of regulations like the GDPR is to establish clear guidelines and standards for data protection, thereby safeguarding individuals' privacy rights in the digital sphere. The idea is that by holding companies accountable for their data practices and imposing consequences for violations, these regulations aim to mitigate the power imbalances inherent in digital feudalism and ensure greater transparency and accountability in the handling of personal data.

While regulatory approaches like the GDPR represent a significant step towards addressing digital feudalism, they are not without their limitations. Enforcement challenges, jurisdictional complexities, and the rapidly evolving nature of technology present ongoing obstacles to effective implementation. Moreover, regulatory frameworks must strike a delicate balance between protecting individuals' privacy and fostering innovation and economic growth in the digital economy.

The New Solution: An AI Powered and Web3 Enabled Citizen-Owned Identity

While traditional regulatory approaches like the GDPR play a crucial role in protecting individuals' privacy rights, they are insufficient in tackling the broader issues of data ownership and control. In response, there has been growing advocacy for new solutions centered around the concept of self-sovereign identity (SSI). By integrating Web3 technologies, such as AI and blockchain, SSI fundamentally shifts the paradigm of digital identity, empowering individuals to assert control over their data and online interactions.

Let's start by unpacking SSI and its main components. At its core, SSI provides individuals with the ability to capture, own, control, manage, and even profit from the data they generate. Unlike traditional models, where digital identities are controlled by a central authority or platform, SSI empowers individuals to assert sovereignty over their personal information, free from intermediaries or third-party gatekeepers.

The main components of a SSI system include:

• Decentralized Identifiers (DIDs): At the core of SSI systems are DIDs—unique identifiers anchored on distributed ledgers or blockchains. These DIDs serve as the foundation of an individual's digital identity, enabling secure and tamper-proof representation of their personal information.
• Verifiable Credentials and DID Communication: Participants in the SSI ecosystem exchange verifiable credentials securely using DID-based relationships. These credentials attest to specific attributes or qualifications of an individual—things like age, educational attainment, or professional certifications. Communication between parties occurs through a "DIDComm," a messaging protocol layer that ensures privacy and integrity.
• SSI Wallets: Individuals interact with their self-sovereign identities through SSI wallets, which serve as secure repositories for DIDs and verifiable credentials. These wallets enable users to manage and share their credentials selectively, facilitating authentic and privacy-enhanced digital interactions.
• Autonomous Digital Relationships: Self-sovereign identity systems foster decentralization, since participants would interact autonomously without reliance on intermediaries or centralized authorities. Users retain full agency over their digital interactions, enhancing privacy, flexibility, and preserving human dignity.

Integrating AI into SSI systems would further enhance their capabilities. I’ve concluded now that what each of us needs is an AI-powered, digital, self-sovereign identity, neither bestowed nor revocable by any central administrator and enforceable in any context, in person and online, anywhere in the world.

This intelligent, citizen-owned identity would become our digital counterpart—learning about us, our values, preferences, aspirations, and acting as a supportive "digital copilot" to help us navigate life. Leveraging advanced algorithms and machine learning capabilities, these personal AIs would analyze the vast amounts of data we generate daily to proactively assist us in achieving our goals. Beyond streamlining everyday tasks and decision-making, our intelligent digital twin would serve as a trusted advisor, protecting our privacy, personal safety, and offering guidance across different facets of life—from managing our health and career to facilitating lifelong learning, leisure, and journey toward self-improvement and fulfillment.

An intelligent, citizen-owned identity offers a transformative approach to digital identity, rooted in principles of autonomy, privacy, and resilience. By thinking differently and leveraging the potential of AI and Web3 technologies, we can pave the way for a future where data sovereignty is not just a lofty ideal but a tangible reality for all.

For deeper dive into self-sovereign identity systems, I encourage you to explore BRI's Big Idea White Paper, "Self-Sovereign Identity: The Architecture of Personal Autonomy and Generativity on the Internet " by Phil Windley .? You can also check out the "Identity" module in our online course, "Transacting on the Blockchain ," developed in partnership with 欧洲工商管理学院 (INSEAD) on Coursera .

Don Tapscott is author of 16 widely read books about technology in business and society, including the best-sellerBlockchain Revolution , which he co-authored with his son Alex.? He is Co-Founder of BRI , an Adjunct Professor at INSEAD, Chancellor Emeritus of Trent University in Canada and a Member of the Order of Canada.

?