Is Web3 Going To Relieve Businesses Of The Burdens Of Data Privacy?

Is Web3 Going To Relieve Businesses Of The Burdens Of Data Privacy?
3 months ago

If you’ve read any crypto articles over the last year, the likelihood is you’ve heard of Web3. This is a new iteration of the internet based on blockchain technology – the same technology used to house cryptocurrency. In contrast to Web2 – from which you are currently reading this article – this will be a decentralised World Wide Web, designed to empower users and make the Internet more democratic and more community-driven.

To sum it up, it’s a utopian vision of how the internet should be, but isn’t yet. While it’s unclear whether this vision will be achieved – or if it will work – there are clear-cut reasons why it’s “utopian”. As of 2023, the internet is a hot pot of data and information. Whenever someone goes on the internet, they leave what is known as a “digital footprint”. This footprint is then harnessed by data brokers and sold to companies for personalised marketing.

There are ways to stop this from happening. If you want to remove your information from the internet, you can opt out of data brokers, taking back your privacy while encrypting your current and future data. Similarly, for businesses, a lot can be done to make the user aware of how they use their data. But the average cost of data privacy comes to around 8% of a company’s profits, and the penalty for non-compliance can cost up to $31 million. As well as this, not every user is aware of how significant the problem is, which is why millions of individuals continue to have their privacy invaded every year. These issues are not going away, and this is where Web3 comes into the conversation.

User Data: What Makes Web3 Different?

The first implementation of the internet, Web1, lasted from 1989 to 2005. For many, this was known as the “read” version of the web, while Web2 is known as the “read and write” era. When it comes to Web3, the goal is to make the internet a place to “read and write and own”.

This means that, instead of consumers having their privacy put at risk by companies and websites, users will be able to choose who can use it and what they can use it for. The same concept is true for blockchain right now. The definition of decentralisation means that nothing is owned by one entity. In the Web3 era, there will be no big players hoarding data. Instead, data will be spread across the internet, according to the individual who is sharing it, making it far more unlikely that it can be stolen or misused.

What Does This Mean For Businesses?

As mentioned before, businesses have to put a lot of time and effort into protecting consumer data, and ensuring that they maintain ethical data consideration. This means, surely, most businesses will welcome Web3 with open arms. It’s a nice thought, but it’s the wrong thought. Because businesses are becoming more “data-orientated”, the majority will not be prepared to give it up, data, they won’t be prepared to give it up.

According to Geoffrey Moore, a top management consultant, companies without big data analytics “ are blind and deaf”, wandering around the web with little to no clear direction. Similarly, the Senior Vice President at Gartner, Peter Sondergaard, recently said that information is the fuel of the 21st century, with “analytics as the combustion engine”. Switching to Web3 will eradicate the ability to harness this data, and that is something most businesses would, evidently, rather avoid.

Will Data Privacy Still Be A Key Concern?

While Web3 would likely help the problem of data privacy, it’s hard to see it having a big impact, because it’s still unlikely that Web3 – as we know it – will ever happen. Not to mention, the concept doesn’t completely solve issues of consolidation. When it comes to Web2, consumers are becoming more and more concerned that huge factions of the internet are being controlled by big businesses – including where your data is going and how it is being used.

Blockchain, however, is not free of consolidation. Ethereum, for instance, has already proven how easily consolidation and centralisation can happen even in a blockchain-based network. For the foreseeable future, it looks like data privacy will remain a pivotal issue for businesses – but one they are willing to live with in exchange for data. Similarly, protecting data and ensuring a private internet experience is largely up to the user. The tools are there to protect yourself. Web3 is not. And the version we all hope for may never be.

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