The fact that one can copy and share digital assets easily has raised a rather question: does anybody truly own anything if everything can be replicated infinitely?
Web2.0 social networking apps like Facebook, Twitter and Instagram have become an integral part of our lives, connecting us with the world and allowing us to share our thoughts in an open forum. Unfortunately, however, these platforms centralize data storage i.e. the data is stored on their servers. This gives platforms control over content that otherwise belongs to the users. One outcome of this is that platforms can limit, suspend or band users without proper cause, causing frustration among users.
Thankfully, the next generation of the internet provides a solution to this problem and holds promise for resolving ownership concerns. By utilizing blockchain, Web3 promises to deliver tangible and secure proof of ownership and transfer of digital assets.
A key feature of Web3 platforms, distributed ownership enables tangible ownership and gives users almost complete control and security of their data. Distributed ownership means that the ownership and control of a platform or network is distributed among the participants of the said network. This gives participants provable ownership of their content, protection against data leaks, and the right to shape the future of the network or protocol.
But what’s in it for us?
More control
DeFi platforms make for a good example of the power of distributed ownership. Users deposit their assets into DeFi platforms and, in exchange, receive digital representations of their assets eg. ERC-20 tokens. These tokens imply ownership of the underlying assets, and they can be traded, transferred or used as collateral to borrow other assets.
Decentralized lending and borrowing protocol Aave operates on the Ethereum blockchain. It uses smart contracts to enable permissionless, direct peer-to-peer transactions. By providing liquidity to the platform, lenders can earn interest through a dynamic interest rate model, which encourages asset holders to supply assets to the platform.
Simplified ownership & transfer
NFTs, for example, enable the ownership and transfer of assets in a way that was never thought possible. Creators use NFTs to designate tangible ownership rights to their creative assets and sell it to buyers in a transparent and secure way.
Now, NFTs have extended beyond art and collectibles to real-world applications such as fractional (or complete) ownership of real-world assets and providing opportunities for anyone to invest in properties worldwide.
Breakthrough security
Web3 cloud storage service providers let users store data securely on the blockchain—a decentralized, distributed peer-to-peer system. Files stored on a decentralized cloud are broken up into many shards, and every such shard is encrypted and distributed among a large number of client computers for storage, thus maximizing privacy and minimizing the risk of data leaks or loss.
Still, the challenges are real.
Despite the groundbreaking potential of Web3 technologies, the legal, utility and adoption challenges remain. Moreover, the complexity of the existing interfaces isn’t much help—the steep learning curve it presents intimidates people away from the space.
What’s next, then?
Having solved problems like control, ownership and security, we now confront the critical challenge of building user-friendly decentralized applications. If this can be achieved, the future of decentralization is bright.
As stated earlier, DeFi platforms make for a good example of the application (and power) of distributed ownership systems. Many platforms in the space—dyor.exchange being the latest talk of the town—are committed to the vision of a decentralized future that is designed for the people. Then perhaps we can bet that the future is, in fact, decentralized.