What is required for web3 identity? How to promote the development of web3 identity?

In order to create an open financial system for the world, we need to make web3 accessible to everyone. This means building an identity experience that is easy to use, permissive, and trustworthy, combining the best of web2 and web3. Our first step is to make it easy for anyone to get a free web3 (ENS) username, but there is more work to be done.

If you’ve worked with cryptocurrencies, you’ve probably experienced the anxiety of sending tokens or NFTs to 42-character addresses like 0x2133a64a3bE8B64827B26B08e166d0b478bd09D3. To make this easier, we've partnered with the Ethereum Name Service (ENS) to allow users to claim a username "name.cb.id" using the Coinbase Wallet browser extension.

In order to create an open financial system for the world, we need to make sure web3 is accessible to people from all walks of life. Facilitating the adoption of human-readable username standards is a key part of making web3 friendly for everyone. With this feature, anyone can now claim a free web3 username "name.cb.id" to send and receive cryptocurrency (instead of using 42 character addresses), interact with others, and use it as their The foundation of web3 identity.

While this is an important milestone, your username is only one part of your online identity. There are other identity-related gaps that need to be filled before web3 can be used by billions of people. While web3 has a bright future, it is often not easy to use and lacks a viable way to communicate and assess trust and legitimacy. To fill these gaps, we need to combine the convenience of web2 with the privacy, security and control of web3.

What is identity? Why is it important?

When you create an account or log in to a product, you are using your identity to gain access. Identity is how products and platforms represent who, manage access and authorization, and assess trust. Identity has three core parts:

1. Representation: How you are represented as a user (eg, your username and profile).

2. Access: Prove that you are the owner of the identity (e.g., log in) to gain access to the product.

3. Authorization: Determine the content you can access based on your identity.

In web3 today, your identity is represented by a wallet address or a username like nick.eth, nick.cb.id. By using the seed phrase to configure the wallet or restore access to the wallet, you can access web3. Specific tokens or NFTs can grant you access to exclusive communities, merchandise releases, and more.

Isn't web2 already solved this problem?

Web2 has invested heavily in developing identity products that are easy to use. But the pitfalls of web2 identities are already starting to show: the need to manage multiple accounts and passwords; having to fend off a constant stream of spam; and a lack of privacy, security and control.

Many of us give up privacy, security and control for convenience. Only when we are affected by data breaches, organizational overreach or loss of access do we realize the downsides of web2. But in today's world, these events are becoming inevitable.

What does web3 need to thrive?

The basic client needs of web2 and web3 identities are the same, the difference lies in how they meet those needs. Web2 is centralized, offering convenience and flexibility at the expense of privacy, security and control. Web3 is trustless and decentralized, but it has usability flaws. For web3 to thrive, we need to combine the best of both worlds (flexibility and usability without sacrificing privacy, security or control) and create experiences that:

• Ease of use: It needs to make it easy for every user to transact and interact with others via human-readable usernames, rather than daunting 42-character addresses.
• Tolerance: Every user needs security, and they need a way to restore access without relying on secure storage of sensitive seed phrases — where one mistake could cost someone their livelihood.
• Trustworthy: People need to be able to know if the person or application they are interacting with is trustworthy, and applications and users need tools to demonstrate trust to others.

Facilitating the development of web3 identities

Web3 has the opportunity to address many of web2's shortcomings. With encryption, you control the keys to your identity and your security is in your hands. But let's be real: web3 is intimidating right now. So, what do we in the web3 community need to build so that everyone can enjoy the benefits of web3?

user's identity

We need to make it easy to define and manage portable, interoperable, human-readable usernames on top of rich, customizable public identities ranging from anonymous to fully public. Users should be able to maintain multiple identities in different environments (e.g. one for work and one for gaming).

Tools to keep users safe and feel safe

Today, web3 violates one of the fundamental laws of security because our identities are vulnerable to a single point of failure: mnemonic phrases. Compromised apps, devices, or social engineering attacks can all lead to identity theft. Multi-factor authentication (MFA) is a classic example of web2, and web3 will require an equivalent solution that can protect every user.

How to recover when something goes wrong

We've all forgotten our passwords at some point, and we shouldn't expect a seed phrase to be any different. We cannot scale an ecosystem where losing a seed phrase costs someone their livelihood - users need a way to regain access. Products such as social restoration or multi-party computation (MPC) technologies are creating more forgiving experiences, enabling wider adoption of web3 applications.

Ways to trust and prove legitimacy

A passport is valid because the government certifies its legitimacy. The utility of web3 identities will also rely on proof of the legitimacy of identities by trusted parties. Users will need ways to collect, manage and communicate "proofs" of their credentials and legitimacy. Applications will need methods to issue and verify the legitimacy of user identities and credentials.

Interoperability across web2 and web3

Over time, the concepts of "web2" and "web3" will become blurred, and late adopters will not see a clear distinction between the two. They expect seamless access to "web2" and "web3" from one identity and one set of credentials, and we need to enable that experience. Similarly, we need to provide users with a chain-agnostic identity that they can use everywhere in web3.

Building a web3 identity layer

Building a robust web3 identity layer requires deep research by teams that can build and iterate quickly. This often means building and improving locally before scaling globally (and in a decentralized way). Organizations like Coinbase need to embrace this long-term vision from the start: open source, open standards, and working closely with the wider web3 ecosystem.

Most importantly, we cannot lose sight of the core promise of web3 identity. We need to build it in a way that prioritizes user privacy, security, and control, while making it easy to use, forgiving, and trustworthy.

Coinbase has already started this journey with organizations like ENS and Verite to provide everyone with free web3 identity (cb.id), and we will continue to expand our identity services. Please note: This is just the beginning of an exciting new chapter for identity and web3 for Coinbase and the entire web3 community.