By Mike Fisher
This past semester I’ve had the privilege of working with a group of professors and students from Case Western Reserve University’s xLab on some real world projects. While they are all very different, they share a common theme of decentralized credentialed data sharing. The first project used data from health monitoring devices such as Apple watches to determine stress levels in order for managers to assist employees. This was implemented in a way that allows employees to retain ownership of their health data. The second project used machine learning to translate academic transcripts into digital Learning and Employment Records (LER) in order to accurately and authentically detail the individual’s skills and competencies gained through their work in the classroom. The solution required storing and sharing verifiable digital credentials. The third project built the backend infrastructure of self-sovereign identity (SSI) utilizing the Decentralized Identity Foundation’s open standards and protocols for verifiable credentials. All of these push forward a new model of decentralized credentialed data sharing that empowers individuals to keep ownership of their personal data.
If none of that opening paragraph made sense to you, hold tight. You might not have heard of DIF, DID, or SSI but I’m sure you’ve heard of Web3, NFTs, or cryptocurrency. While these three have very different uses, they all share the same underlying technology of blockchain, which enables decentralized, transparent, and secure transactions and interactions. Before we dig into blockchain, let’s review each of these in case you’re not familiar with all of them. Feel free to skip the next three paragraphs if this is old hat to you.
- NFTs (Non-Fungible Tokens) are unique digital assets that represent ownership of a specific item or piece of content, such as art, music, collectibles, or virtual real estate. They are built on blockchain platforms like Ethereum, which support the creation and management of smart contracts. Smart contracts enable the creation of NFTs by assigning unique attributes and ownership rights to each token. The decentralized nature of blockchain ensures that the provenance and authenticity of NFTs can be verified, and that ownership can be securely transferred between parties.
- Web 3.0 refers to the next generation of the internet, which aims to create a more decentralized, user-centric, and secure online experience. Contrast this with Web 2.0 companies where data is usually the primary currency, e.g. social networks. At its core, Web 3.0 leverages blockchain technology and other distributed systems to give users more control over their data, digital identities, and online interactions. In Web 3.0, services and applications can be built on top of decentralized platforms, reducing reliance on centralized intermediaries like traditional web service providers. Smart contracts, decentralized applications (dApps), and decentralized autonomous organizations (DAOs) are all key components of Web 3.0, enabled by the use of blockchain technology.
- Cryptocurrencies are digital or virtual currencies that use cryptography for security and operate on decentralized blockchain networks. They enable peer-to-peer transactions without the need for a central authority, such as a bank or government. The most well-known cryptocurrency is Bitcoin, but there are thousands of other cryptocurrencies built on various blockchain platforms. Cryptocurrencies use blockchain technology to record transactions, maintain a public ledger, and achieve consensus among network participants. The decentralized nature of cryptocurrencies helps to ensure the security, transparency, and immutability of transactions.
Now onto blockchain. Again if you are familiar with this concept feel free to skip. If you need a refresher, imagine you are back in grade school. You and your friends like to trade stickers but you need a way to keep track of the trades. You could use a single notebook that perhaps the teacher keeps but there are problems with this because the teacher might forget to record a trade or every time you wanted to see who owned which sticker you had to ask your teacher. As an alternative, imagine you keep your own notebook and every time someone trades a sticker, you write it down in your notebook. Now, instead of having just one notebook, imagine that each of your friends has a copy of the same notebook. Whenever a sticker trade happens, all the notebooks get updated with the new information. This way, no one can cheat or change the information in their own notebook because everyone else can check their own notebook and see if it matches. Each page in the notebook is like a block, and all the pages together make a chain. So, we call this special notebook a "blockchain." The blockchain helps you and your friends make sure that no one is cheating when trading stickers, and everyone knows who has which stickers. Just like the notebook helps you and your friends trade stickers, blockchain helps people trade things like digital money or artwork on the internet.
So where does all of this background information lead us? First off, I do not think centralized/Web 2.0 technologies and the business built upon them are going away anytime soon. One of the major downsides of this decentralized technology is that it tends to be very slow compared to traditional centralized data storage. However, that doesn’t mean that applications and businesses can’t make use of this new technology for specific use cases, such as the stress management application that we built for managers to help employees manage stress. That is a perfect use case where performance calculating the stress score from health data doesn’t need to be in realtime and the privacy concerns over storing health data with an employer are such that the overhead is worth the decentralization. This doesn’t have to be an “either/or” scenario; rather, it can be, “when it makes sense.” When centralizing data makes sense for performance and there are limited privacy concerns we shouldn’t force the use of blockchain. However, when there are significant privacy and credentialing concerns, we should consider it. As a technologist or product manager, you should be familiar with these technologies so they are in your tool belt should you have a need for them.
The other interesting aspect of two hot topics in tech (blockchain and AI) is the focus on data. Both blockchain and generative AI have raised concerns over data ownership. Why should a social network, healthcare provider, or university own my data and lock me into their platform? Why should a generative AI bot be allowed to train on my data without my permission? So many questions are all focused on data from a privacy, ownership, verifiability, and security perspectives. There are no easy answers to these questions and I think we are likely to see a combination of laws, regulations, and societal norms that end up providing answers to these questions over the next decade. As usual, the technology isn’t the blocker or really even the difficult part.
This was previously published by "Fish Food for Thought."