Web3 is privacy's frontline : how to fight for it

Web3 has become an umbrella term for a range of increasingly disparate visions of the future of the internet. For some people, ‘Web3’…

Author: Nym

August 16, 20225 mins read

Web3 has become an umbrella term for a range of increasingly disparate visions of the future of the internet. For some people, ‘Web3’ means metaverse-based projects of the sort trumpeted by Meta. For others, it describes new protocols and modes of organisation based on distributed ownership and control.

Generally speaking, though, and for our purposes, Web3 means the emerging iteration of digital communication based on the principles of decentralisation. Web3 uses blockchain-based technologies, tokenisation, and cryptography to enable new forms of cooperation and transmission of information. Nascent examples of this include DAOs.

Is Web3 private?

There is no simple answer to this question — and, of course, if you need clarification about whether or not a technology you’re using is truly private, then it almost certainly is not.

The current iteration of the internet, known as Web2 (or Web 2.0), is characterised by catastrophic centralisation. Power (whether exercised directly, for example through state surveillance and its outcomes, or indirectly, for example through control of the vectors through which information travels) is concentrated in an ever-smaller number of siloes. Control of those siloes is contested; one of the major developments associated with this phase of the web has been the extraordinary rise of tech-enabled non-nation-state actors such as GAFA. These monolithic companies are both challengers to conventional state power and inextricable partners of those states, the latter of which increasingly cannot do without the infrastructural assets of the former.

Some observers appear to consider Web3 inherently ‘more private’ than the existing model because they associate words like ‘blockchain’ and ‘decentralisation’ with anonymity. Others have a different understanding: to these people Web3 must be inherently ‘less private’ because they associate blockchains and decentralisation with total transparency, presumably because of the oft-repeated but much-misunderstood fact that transactions on a blockchain are immutable and everyone can ‘see’ them.

In reality, of course, the technologies associated with Web3 can and will be deployed in different ways that suit individual use-cases. There are many situations in which some degree of privacy is absolutely critical. Consider, for example, the storage and transmission of medical data.

Beyond this there are significant questions about the degree to which decentralisation will actually be achieved, at least for the average web user. Consider the crypto exchange model. In order to transact in Bitcoin, for example, most users require an ‘on-ramp’ enabling them to buy coins in exchange for fiat currency — a function that is carried out by huge centralised exchanges with vast data processing power and everyone’s credit card details. This is far from true decentralisation.

Can we make Web3 private?

The examples above give an indication of just some of the first infrastructural pitfalls that Web3 has to overcome in order to achieve anything like its promise of decentralisation and, crucially, to fulfil its potential for privacy. They should highlight that there is no inherent privacy in Web3; there is no ‘baked-in’ privacy protocol, and privacy is not guaranteed by design.

Privacy will not be achieved in Web3 unless it is taken as the foundational principle of these new modes of communication. In practice, this means the creation of a ‘layer 0’ protocol that guarantees anonymity — that is, a protocol that is private by design. The Web2 analogue here is TCP/IP, the governing protocol of the modern internet, also known as the network layer. Nym is working hard to build this layer 0 privacy protocol for Web3, which also enables interoperability between other protocols and standards (whether blockchain-based or not). But the tech stack of Web3 privacy is broader than just layer 0.

Secret Network focuses on running private smart contracts which don’t expose user data to the public, unlike most if not all other smart contract systems. Manta is relying on a state-of-the-art cryptographic primitive called zk-SNARK to build its decentralised protocols for private payments, token exchanges, loans and synthetic assets. Aztec enables users to privately interact with all DeFI services within the Ethereum ecosystem by integrating specific zero knowledge proof circuits in smart contracts already deployed. Offshift and Railgun focus on privacy for smart contracts; Monero and Zcash aim to provide privacy in currency transactions… And the list goes on.

There is a growing community of projects and developers dedicated to making Web3 more private, and to building applications that enable privacy for specific actions and circumstances. The battle to wrest control of the nascent new internet from the clutches of state and corporate actors is going to be a long and difficult one, and privacy requires constant vigilance. Thankfully, there is an emerging coalition of projects dedicated to a private internet. Nym is proud to be among them. We each bring different solutions to the table — but we all share a common vision.

In order to build a truly private future for digital communication we need cooperation, mutual support, and interoperability. And, perhaps most importantly, we need clear, effective and unified communication about the problem we are solving.