We were promised a revolution. A decentralized utopia where we, the users, controlled our data, our identities, and our digital destinies. Web3, we were told, would be for the people, by the people, and of the people. Instead, it feels more like Web3 on the people. A surveillance state disguised as empowerment, and frankly, I'm outraged.

Did Radical Transparency Backfire Badly?

The Web3’s foundational principle – radical transparency – has turned out to be its biggest weakness. The blockchain, intended as a fortress of trust, has instead become a glass house where our financial lives are on display for anyone with a curious eye and a bit of technical know-how.

Think about it. Every transaction, every NFT purchase, every interaction with a decentralized app (dApp) is permanently etched onto a public ledger. Timestamps, behavioral data, even patterns in your transaction history are all laid bare. This isn't just about abstract privacy concerns; it's about real-world vulnerabilities. Imagine a stalker tracking your crypto wallet movements, knowing when you're likely to be home based on your spending habits. Imagine a competitor gleaning insights into your business strategy by analyzing your supply chain transactions on the blockchain. This is not empowerment; it's exposure.

Don't even get me started. Sure, you might have a fancy wallet address that doesn’t scream your name, but let's be real. Between Know Your Customer (KYC) requirements on exchanges, ENS domains linking to real-world identities, and that oh-so-tempting NFT purchase you proudly flaunted on Twitter, it's often shockingly easy to connect the dots. Once that connection is made, everything is traceable.

Here's an unexpected connection: Web3's transparency paradox reminds me of the early days of social media. We eagerly shared our lives online, blinded by the promise of connection, only to later realize the extent to which our data was being mined and monetized. Web3 risks repeating this mistake, with even higher stakes.

Marginalized Communities Bear Greatest Risk

This isn’t some far off hypothetical worry for a bunch of techno-geeks. The erasure of privacy in Web3 has severe consequences, especially marginalized communities. Those who suffer under repressive government, political activists working for gender, racial or religious equality, and others persecuted due to sociopolitical discrimination are all especially at risk.

Consider this: someone living in a country with strict censorship laws might use crypto to bypass government restrictions and access independent news sources. However, if their transactions are easily traceable, they’re risking exposing themselves to persecution. Think about people from disadvantaged communities who rely on DeFi to get access to credit. Sadly, their financial information is almost always turned into a blunt instrument by predatory lenders.

This betrayal of privacy goes beyond a technical mistake. It’s a social justice failure. It is time for us to accept and understand that privacy is an essential human right. For the most vulnerable, it is not a luxury.

Reclaim Web3: Privacy-by-Design is Essential

So, what can we do? We can’t throw our hands up and declare Web3 a lost cause. We need to demand better. We need to build better.

It starts with implementing a privacy-by-design approach. As we’ve seen recently with secure messaging apps and privacy-focused browsers, Web3 requires technologies that automatically reduce the amount of data we share. This means:

  • Developers need to prioritize user control. We need tools that allow users to selectively disclose information, sharing only what's necessary for a particular transaction or interaction.
  • Reduce metadata generation. Every piece of data we create adds to the surveillance puzzle. We need to minimize the amount of metadata generated by Web3 applications.
  • Obscure transaction patterns. Techniques like transaction mixing and zero-knowledge proofs can help to obfuscate transaction patterns and protect user privacy.

So let’s look to one of the original finance sectors, for once ironically, for some inspiration. Secondly, they have stringent regulations and business incentives to ensure user data is used responsibly. We definitely need those same kind of safeguards in Web3, but ones that are rooted in the principles of decentralization and user empowerment.

Here's an example: Imagine applying for a loan on a DeFi platform. You don’t need to share all of your transaction history. Rather, submit a zero-knowledge proof of your creditworthiness to the lender, proving you’re creditworthy without revealing any of your past transactions to the lender. For example, in the healthcare context, you’re only required to share the minimum necessary medical information with your insurance company. This approach allows you to continue collecting your unrelated health information confidentially.

We can reclaim the promise of Web3. Collectively, we can help ensure that a next-generation internet succeeds in truly empowering users. In this future, privacy is the opposite of an afterthought—it’s a constitutional right. It requires us to act now. How about we build a Web3 by the people, for the people, and not on the people. Join us in creating a Web3 that prioritizes privacy and empowerment together.

  1. Demand privacy-enhancing technologies: Support projects that are building privacy-focused solutions for Web3.
  2. Advocate for community-led governance: Support decentralized autonomous organizations (DAOs) that prioritize user privacy and community control.
  3. Demand transparency from Web3 platforms: Hold Web3 platforms accountable for their data practices and demand greater transparency.

We can reclaim the promise of Web3. We can build a future where users are truly empowered, where privacy is not an afterthought but a fundamental right. But it requires us to act now. Let's build a Web3 for the people, not on the people. Let's build a Web3 where privacy and empowerment go hand in hand.