The Web3 Issuers Problem: Centralization in a Decentralized World
Last updated
Last updated
In the rapidly evolving landscape of Web3, a paradox has emerged that challenges the very core of decentralization: the problem of centralized issuers in digital reputation systems. This issue, deeply rooted in the classic trust triangle model, poses a significant threat to the promise of a truly decentralized digital identity and reputation space.
The traditional trust triangle consists of three key players: the Identity Holder (the user), the Issuer (the credential provider), and the Verifier (the entity checking credentials). In Web2, issuers are typically centralized platforms or institutions that provide users with credentials or reputation markers.While this system worked in the Web2 era, it introduces a massive centralized component and human factor into Web3, creating a weak link in the chain of trust. This centralization opens the door to potential abuses and undermines the decentralized principles that Web3 aims to uphold.
The problem creates a vicious cycle that perpetuates centralization:
Verifiers must trust the issuer to accept credentials.
To be considered trustworthy, issuers need to be large and established.
Large issuers inevitably become corporations.
This leads to centralization of reputation management.
Smaller issuers either die out or must become corporations to compete.
This cycle continually pushes the system back towards a Web2-like model with monopolistic platforms, contradicting the decentralized ethos of Web3. It's akin to a city where all roads lead to a single marketplace – despite the freedom of movement, everyone still depends on one central hub.
Even Self-Sovereign Identity (SSI) systems, designed to give users control over their digital identities, aren't immune to the problem of centralization. In Web3, issuers of Verifiable Credentials have become new centers of influence within the trust triangle. This unexpected development undermines the decentralized nature of the ecosystem that Web3 advocates strive to create.
Blockchain technology offers a potential way out of this centralization trap. Here's how it could help:
Smart contracts can replace centralized issuers, allowing for automated and trustless credential issuance.
Credentials can become self-verifying smart contracts, eliminating the need for a centralized verification authority.
This enables algorithmic verification, reducing reliance on human judgment and potential biases.
It paves the way for collective verification, distributing the issuer function among network participants.
In this model, the credential itself could function as the issuer, effectively eliminating the need for a centralized authority in the trust triangle.
To truly solve the Web3 issuers problem, we need to rethink the entire structure of digital reputation systems. This might involve:
Developing new protocols/standards that allow for decentralized issuance and verification of credentials.
Creating systems where reputation is built through on-chain actions and peer-to-peer interactions.
Implementing governance models that prevent the consolidation of power in the hands of a few large issuers.
If we don't address this issue now, we risk Web3 becoming another version of centralized Internet, where power is concentrated in the hands of a few, and users lose their autonomy.
