Reputation Defenders

What is web3 reputation management?

What is web3 reputation management?
Brad Withers
Reputation Defenders Team
7 min

What is web3 reputation management?

Web3 is established on the premise that each internet user will hold a unique internet identifier, like an email address, but associated with a cryptographic public/private key pair that can be natively connected to any piece of software and held on a blockchain. As part of someone's "decentralized identity" — their bundle of ownership — a portion of a person's online activity would then be "on the chain," signifying that it would be public and smoothly searchable via their crypto wallet.

With such a decentralized identity — a legible history unique to each individual — one's crypto wallet would work as a sort of profile, similar to Facebook or LinkedIn; only instead of handpicked details that may or may not be true, it would store verified addresses and trails of interactions on multiple networks. This would make up an immutable ledger: a permanent timestamped record of this user's accomplishments, contributions, interests, and activities to date – whether these involve game scores, investment portfolios, civic engagement movements, conversations, DSP feedback, or something else entirely.

Web2 to web3

The past decade of big tech and web2 social media platforms have slowly shifted our perspectives on building an online presence. Web2 products have enabled us to establish fleeting, disposable digital personas that can be changed or deleted as we — and society — move on with the times. However, after witnessing the many attempts by startups within the blockchain space trying to create a "web3" experience over the past two years, one thing has become increasingly clear: users must be empowered to create durable, immutable identities if blockchain technologies are ever going to gain mass adoption traction.

Unlike most web2 profiles, decentralized identity is not temporary; it promotes self-sovereignty and maintains records that persist over time. This means that an NFT of a certificate in your crypto wallet would turn into a permanent academic certification authenticated through public verification keys stored on-chain — enabling other users to verify the source without needing direct access to the school or issuer's system. Also, each piece of content you post online would now be permanently linked back to your identity (unless you choose for it to be deleted).

Moreover, with public histories now mapped into digital wallets and stored on distributed evidence ledgers, it would be possible for third parties who want access (like employers) to prove whether you were early onto a trend or active in a project before it took off— like being into Taylor Swift before she was famous or reading this post while web3 is still in its beginning. This persistent mapping of behavior from one platform domain or industry context onto another establishes new incentives for reputation building with long-term thinking: rather than creating temporary profiles on various networks as we do now in web2 (cringe), we could build strong reputations over sustained periods under common identifiers we control ourselves. Suppose people were empowered by providing permissionless access and earning them custody over durable identities online. In that case, this may encourage more careful curation of the reputation markers they carry with them into the future and propel us forward towards true self-sovereign identity systems and wide-scale adoption of crypto internationally.

What decentralized identity requires

Decentralized identity on the blockchain is the future of the web. This new era of trust gives individuals control over their digital identities, allowing them to prove and manage access rights across various online services. But for this technology to reach its full potential, it will require an infrastructure that can effectively map people's off-chain experiences and affiliations — from articles they write or content they create — onto the blockchain.

The contributions that you collect in your crypto wallet will become very important. They'll become the carrier signals that describe who you are online and be used as the basis for your reputation. To mainstream decentralized identity, we must first build mechanisms to normalize, process, and prioritize the influx of data that will be added on-chain. On top of this foundation, we'll have to solve endemic challenges like verifying credentials and gaining access to decentralized applications. Finally, we can start exploring how factoring on-chain reputation into offline activities—based on information made openly queryable through these identity systems—can provide users with significant value beyond establishing trust online.

Mapping off-chain experiences and affiliations on-chain

Historically, blockchain technologies are often opaque to the average consumer, largely configured for financial transactions. However, one of the space initiatives holding promise is Decentralized Identity (DI)--the concept of having a working and usable identity system held on a blockchain or distributed network that allows people to control their digital identity in line with their natural world identities.

Currently, most decentralized identity protocols incentivize users to store data to create verifiable claims about themselves, such as proof-of-age, the definition of residence, etc. To make decentralized identity useful and widespread for everyday use cases, we must introduce on-ramps for people to record experiences and affinities onto the blockchain--those accomplishments that don't fit into specific categories like "name" or "date of birth":

  • Educational accomplishments.
  • Professional achievements (everything from degrees earned to volunteering activities).
  • Fanships (i.e., being part of an open-source project or buying limited edition sneakers).

Some companies are already tackling this challenge. Violet is focused on authenticating off-chain personally identifiable information and assets on-chain through verifying records. Rabbithole enables users to store meaningful content related to blog posts, conference sessions attended, and other support badges directly on their public blockchain profiles, like Ethereum Metamask profiles, through its API studio product. Playwork makes managing resumes easier, while 0xStation helps store employment résumés securely on the cloud while providing information quickly and easily when employers need them from job applicants. Koodos leverages this technology by helping people map disparate affinities onto blockchain via NFTs—helping turn any URL link into a customizable NFT, creating a collection point for consumers who meaningfully represent themselves online.

Processing reputation data — and data standards

Cryptographical wallets are instrumental to decentralized identity — but with great power comes great responsibility. Wallets act as structural repositories for immutable data and physical ownership over them. This means that developers must wrestle the complexity of an entire blockchain down to a digestible figure before returning it to the user so that they can make sense of it in their pocket-sized address book — otherwise known as a wallet.

Once all this identity data has been registered on-chain, we'll need methods to map and interpret it so that it makes feel to the wallet holder and those they interact with. But of course, since wallets are typically also used for everyday storage needs and transactions, this task is especially difficult: wallets accrue a lot of noisy data from day-to-day use that distracts from its more thoughtful side.

For the sake of logistical clarity (and because different facets of an individual's identity naturally overlap and interact), it makes sense to store one's relevant activities and assistance in a single wallet — but any given person isn't just a creator, builder, investor, or collector; they're many things at once. Therefore, we need some path to take parts of their decentralized identity and showcase them in various digital spaces to distinct audiences. Suppose a design in which the wallet's overall content was kept private, but accessing a specific facet of a person's reputation required a specific access key.

Challenges to mainstreaming decentralized identity

The quest to enable a more holistic view of digital identity is what will propel us closer to digital sovereignty. Identity is an extremely complicated topic, and there are inherent challenges to building a decentralized identity system, as described above.

Existing technology that records inputs tends to be very primitive — mostly limited to transaction histories — but something as subjective and complicated as an identity will require considerably more context. Understanding why or how you earned or bought an artifact is essential for users—and the companies implementing this technology—to trust those identities. Contextualizing information explains why you've earned or bought an artifact. For example, earning an NFT for contributing to a project should provide context about why you earned it and what skills you demonstrated. Buying digital art should include context on why you bought the art, what it made you feel, or what you thought about it. Here's where technologies like blockchain come in; immutable records help determine that newfound ownership structures carry weight and permanence.

Of course, even with blockchain, there are several hurdles we have yet to overcome regarding digital identity. A system built around permanence also presents challenges about escaping past versions of one's identity, as is clear in credit scores and other long-run reputation mechanisms today. We must factor in systems that inspire trust while allowing individuals the space to evolve their digital personas without getting stuck in history's mistakes.

Decentralized identity will result in downstream opportunities.

Shortly, decentralized identity will open up many online commerce and finance opportunities. Despite the numerous technical and economic challenges in developing a legitimate on-chain reputation solution, we believe that by doing so, numerous use cases beyond what we are currently able to imagine will be unlocked.

One of the trickiest elements of traditional financial systems is access—to utilize the vast majority of services in current financial ecosystems, users must fit very specific molds — often based on their ability to show a credit score supported by some known history. If users don't have this information or cannot provide it quickly and easily, they won't be able to participate in most services. The portability and accessibility of decentralized identities could change this by moving identities on-chain and creating an internet-native credit score that could unlock access to capital, new paradigms for recognizing labor, flexible rules for tenant checks, or quick loans that don't require complex paperwork. With decentralized identity solutions implemented well across various contexts involving various partners, this type of reputation system could establish equitable access to all manner of services throughout our digital lives — not only with financial services but also with other types of existing services such as accommodations or car rentals that require trust and recognition between parties.


December 30, 2022

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What is web3 reputation management?

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