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Joshua D. Tobkin asks how we can reconcile privacy preservation with the need to coordinate and exchange value with others, concluding that 'self-sovereign' distributed identity is the only way forward. He makes the case that over the next decade, increasing internet surveillance will drive us to encrypt everything and communicate online on a purely need-to-know basis. He discusses the role that blockchain will play in allowing us to coordinate and exchange value in such a world.

Mass surveillance by governments and corporations will become normal and expected this decade and people will increasingly turn to new products and services to protect themselves from surveillance. The biggest consumer technology successes of this decade will be in the area of privacy.

Fred Wilson, Co-Founder of Union Square Ventures

Already, the physical world is being tracked by cameras, mobile and Internet of Things (IoT) devices at high density. With the recent COVID-19 outbreak, this is only going to accelerate as contact tracing may become accepted as one of the viable ways to keep the virus abated. As a consequence, in the next five years, most major cities of the world will be fully surveilled in the physical realm, and this will be instigated and sold to the public as a necessary means to protect the population from terrorists, pandemics and more. Humankind will yearn for privacy as the powers that be inevitably overuse their privilege. Naturally, the public at large will seek refuge in an ‘end-to-end-encrypt everything way’, and the internet will go ‘dark’, as Vitalik so starkly put it, in our attempt to resist the prying eye of corporations and government-run internet service providers.

The solution to an overbearing governing authority indeed resides with leveraged cryptography in order to preserve some semblance of privacy. However, on this ‘dark internet’, where everything is encrypted and we communicate with each other on a purely need-to-know basis, how are we to coordinate and exchange value?

Just like Satoshi Nakamoto suggested in his groundbreaking white paper, the random shuffling and usage of public keys and Bitcoin addresses as an additional security measure for privacy preservation will become more of the norm. On the ‘dark internet’ we will hide in plain sight through multiple different decentralised Identities. We will use Zero-Knowledge attestations, which are cryptographic proofs of ownership or knowledge that don’t reveal otherwise unnecessary or sensitive details, in order to prove we are who we say we are and that we have the correct rights to access or participate in certain private online community activities. These access rights or restrictions will be dictated by our various Verifiable Credentials, which are cryptographically signed messages issued by other parties to the holder to stipulate permissions and approvals.

Universal Reputation Scores tied to decentralised identities will be used as a basis for facilitating trade and even issuing credit and access to assets, facilities, resources and more – without transacting parties having to necessarily expose their personally identifiable information (PII). In this decentralised future, data breaches will naturally be limited as a result, since even if one’s data somehow becomes exposed, in the ‘dark internet’ everything remains encrypted anyway, so there is nothing even worth stealing in the first place, except of course for illegible ciphertext.