The Social Layer and Crypto

How did we get here?

The rise of the internet

The rise of the internet has brought about a digital revolution of information sharing, connecting people from all over the world. This influx of data consumption has caused humans to become more involved with online platforms as a means of communication, and to remain connected with the rest of the world.

The Social Layer

The pressure to stay connected with the rest of the world has driven the social layer of our society from the physical world to the digital world over the past two decades. Being in an online society comes with many challenges such as verifying information to be credible, as well as being exposed to more people at such a scale that we humans had not been evolved to encounter in our lifetime. How do we counter these issues? The answer is crypto technologies, which can enable us to better navigate the online world.

What is Identity and Why is it Important?

Let’s first start with a basic idea of what identity is. Identity is a collection of claims about someone or something. Identity can consist of several data points that allow us to differentiate between each other and other things. In the case of people, this could be a passport, driver's license, social security number, etc. These data points allow us to cross-reference and verify one’s identity.

Identity is valuable to us as a society for a variety of reasons. It allows us to verify people are who they say they are for important operations such as voting or traveling to other countries. It also attaches a source to information that is spread out to others. In a world where the spread of information and amount of information is rapidly increasing, identity becomes even more valuable as a way to verify credible sources.

How can Blockchain improve identity?

Blockchains are open distributed ledgers that allow for online identities to have unique, inherent properties.

The first being, accessibility to identity. Around 1.1 billion people around the world have no proof of identity, and 45% of those without an identity are among the poorest 20% on the planet.[1] Identification processes can be cumbersome, expensive, and even too confusing for many people who are not familiar with the process. All of these aspects of the current identification processes are roadblocks to greater participation in a global community.

A second major problem is data security. Currently, a majority of valuable identification information is stored on centralized databases propped up by legacy software operating with many single points of failure. Being able to decentralize this data would mean more resilience to people’s identities on the internet.

A third issue is a fraudulent identity. Users’ digital identity is exceptionally fragmented across different platforms. There is no standard way to use the data for it to be used by all platforms homogeneously. Moreover, the weak link between digital and offline identities makes it relatively easy to create fake identities. False identities allow for the propagation of false information. Being able to verify this with blockchain and crypto technologies would bring society closer to a world with decentralized information with verifiable sources.

Application of Crypto Technologies to the Social Layer

With the influx of information available, it is difficult to sift through what is credible information and what is not. I believe that crypto can help us as a society address these challenges through various means.

The first challenge that crypto can address is that of verifying internet identities. The issues that must be addressed with verifying internet identity include: how do we verify an account is an actual person and how can we discern between which of these identities is more credible than others. One possible solution is to have users connect their crypto wallets to all platforms they use. By doing this we could have a consistent single account with which we could track its interactions and activity with other accounts on various platforms.

Linking a person’s wallet would not only allow us to track their activity in order to identify certain patterns, but it also means we could incorporate economic incentives into online social platforms that keep them from being malicious actors. We could have social media that require accounts to hold a certain amount of tokens to be able to interact with the platform and protocol. These tokens could be slashed for any malicious behavior that is done. Moreover, adding community governance would allow for moderation in a more decentralized and robust way.

A second use case for crypto technologies is already being explored in its nascent form: using tokens as a filter for communities. Community curation can be seen in various forms though I will use the example of DAO’s (Decentralized Autonomous Organizations) and NFT art communities. When joining one of these communities, it is common to find yourself in their community discord server. When one joins a server, they expect to be prompted by a server bot asking them to verify that they are either holding a certain amount of governance tokens in the DAO’s case or if they are holding a certain NFT art piece from a collection in the Art community’s case. If one does not hold the required token or cannot prove it, they do not have access to the entire server and all of the channels it contains. This is an early form of what will become a major movement looking forward. These are communities that select for community members by seeing who has “skin in the game”. This is an attempt to ensure that every member of the community has a base level of commonality, which is critical for social cohesion. Without a foundation of some similarity, large, distributed groups cannot reliably coordinate or trust each other.

These are just some thoughts I’ve had so far and this is not an exhaustive list. I plan to continue to add to these over time in order to track my thoughts.