Web3 surveillance proves we need on-chain data ownership

    Disclosure: The views and opinions expressed here belong solely to the author and do not represent the views and opinions of’ editorial.

    Blockchain is famous for showing everything in the open—every transaction, clear as day. It’s like a glass house where everything is visible, and that’s been its big selling point. But there’s a catch: this see-through world is too revealing. It’s like we’ve walked into a room with glass walls, forgetting that others can look in if we can look out. This crystal-clear world reminds us of the old days of the internet (web1), where all information flowed freely. Sadly, it also started to resemble the world in which web1 became web2, and data began to be gathered, analyzed, and monetized. A world where our online moves were—and still are—tracked without us knowing.

    The beauty of blockchain lies in its honesty and integrity, but it also bears the shadow of over-transparency. Like in web2, where tech giants constantly monitor online activities and gather data, blockchain’s openness allows anyone curious to observe our digital actions—with financial data visible out in the open (considered sensitive and encrypted data in web2). The very attribute that underpins blockchain’s reliability—its transparency—also introduces a level of exposure that might be more than what some users bargained for.

    Blockchain was envisioned as a revolutionary space, granting us authority over digital presence. But as technology advances, there is a middle ground that promises a blockchain experience that respects user autonomy, offering a transparent yet controlled digital environment. 

    This new level of transparency in blockchain is innovative, but it also comes with some risks. The open ledger becomes a double-edged sword. Users, particularly those new to the blockchain world, are exposed to risks they hadn’t anticipated. The visibility of their transactions can lead to targeted phishing attacks, where malicious actors exploit transaction data to craft convincing scams. 

    This vulnerability extends beyond individual privacy concerns, touching the fabric of the decentralized ethos that web3 champions. The promise of a decentralized future was built on the pillars of user empowerment and security, but this level of exposure could inadvertently lead to a centralization of power in the hands of those who know how to exploit on-chain transparency.

    The ethos of decentralization is rooted in the empowerment of the individual, a shift away from the centralized control that characterized web2. However, the current state of blockchain transparency could unintentionally replicate the very dynamics it sought to dismantle. In a world where every transaction is an open book, the power dynamics shift towards those who can access, analyze, and leverage this information. 

    This scenario could lead to a new digital divide, where the savvy few exercise disproportionate influence over the many. It challenges the core principles of decentralization, potentially leading to a web3 that mirrors its predecessor’s centralized, controlled landscape.

    In the face of these challenges, advocating for on-chain data ownership emerges as a crucial solution, a beacon of hope in preserving the decentralized ethos of web3. Blockchain data ownership shifts the narrative from passive transparency to active control.

    This approach hands users the reins of their digital presence, empowering them to choose what remains visible and what stays private. By giving control back to the users, on-chain data ownership addresses the surveillance issue head-on, ensuring that blockchain remains a tool for empowerment rather than a passive ledger of public information.

    Empowering users to control their data and transaction visibility is the key to balancing the blockchain’s necessary transparency and user autonomy. This control can be implemented through various means, such as privacy-enhancing protocols or selective disclosure mechanisms that allow users to share necessary transaction information while keeping other details private. Such capabilities ensure that the blockchain can serve its purpose as a transparent and trustable ledger without compromising the autonomy and discretion of its users.

    Vitalik Buterin brings an exciting twist to the tale regarding on-chain transparency. In his writings, Buterin suggests that privacy and regulation go hand in hand in the blockchain world. He challenges the old belief that everything on the blockchain has to be out in the open to keep things above board. There is a path that connects the two worlds. As Buterin states:

    “In many cases, privacy and regulatory compliance are perceived as incompatible; this does not necessarily have to be the case if the privacy-enhancing protocol enables its users to prove certain properties regarding the origin of the funds.”

    Think of them as digital cloaks that let you show only what you need on the blockchain, like proving where your funds came from without revealing your entire life story. It’s like having a magic wallet that shows your ID when needed but keeps your cash hidden. These tools let us keep our data private while ensuring everything’s legit and above board. It’s a game-changer because we can be part of the blockchain world without feeling like living in a fishbowl.

    We are at a turning point for blockchain. Blockchain’s been tremendous at showing everything, but maybe it’s shown a bit too much. Web3 starts to resemble web1 when the internet had just begun turning web2, and every click started to be monitored, noted, and analyzed. Do we want to stay in web3, where information is decentralized and users own their data, or do we want to enter web4, which will once again profit from data appropriation? The answer is clear: we need to empower users by data ownership in web3.

    It’s time to grab that remote and start deciding what to show and what to keep under wraps. Users aren’t passengers on the blockchain train; they drive it. Blockchain can be a place where everyone enjoys the view without worrying about who’s peeking in.

    Matan Almakis

    Matan Almakis is the Head of Project at Data Ownership Protocol (DOP), reshaping web3 by pioneering data ownership. With a track record in driving growth at Lamina, a Layer 1 blockchain, where he contributed to Israel’s first IoT-focused L1 blockchain, Matan now leads DOP in ensuring that web3 users share their data exactly how and with whom they want. Matan believes encrypting sensitive financial data on the chain is a fundamental human right and often speaks about how data ownership is crucial for web3’s mass adoption. Matan leverages blockchain to solve real-world problems with a human-centered approach.

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