Our Thesis

1.  The time to invest capital and resources into the authentic web (AW) is now.

The megatrends pushing the world toward self-sovereignty are numerous and powerful:

• GDPR, CCPA, and Utah’s HB 491 regulatory trends toward individual control and privacy
• “Breach of the week”, broken security models
• Growing disdain for big tech, “surveillance capitalism”
• Ubiquity of smartphones, internet, and digital transactions
• Proliferation of (and the desired elimination of) usernames and passwords
• Emergence of distributed ledger technologies
• The Internet of Things
• Gartner, Forrester, and other analysts are bullish on SSI
• GLEIF, IBM, Microsoft, Samsung, MasterCard, Workday, and the European Union are publicly supporting and adopting various forms of AW

When we began working on AW in 2015 there was no GDPR, no Edward Snowden, and no widespread awareness of the authentic web. Big tech was still admired and surveillance capitalism riding high, entirely unchecked.

A lot has happened in the last five years, with serious movements toward individual privacy and control accelerating globally. Self-sovereign identity (SSI) is the ultimate end of the personal control continuum, where upstanding citizenship and full legal compliance are still valued.

The internet connected the world with a network, but without a means of trust; pains from that omission hit global headlines daily. AW finally provides that means of trust and takes it a critical step further, making trust transitive.

AW solves trust between parties interacting on the internet, and transitive trust re-decentralizes it. There has rarely existed a greater challenge, nor a greater opportunity.

3. The internet must be re-decentralized. With user sovereignty, it’s now feasible.

At the beginning of the internet, a “skinny” protocol (IP) enabled any type of hardware to run any kind of application, giving users portability between applications. Due to IP’s inherent lack of security and trust capabilities, however, applications became walled gardens so that users could interact in a trustful manner (think AOL, Facebook, Amazon).

While “big tech” earned its success by delivering immense value, the consolidation of wealth, power, and influence has gone too far and become toxic in many ways, stymieing choice, competition, and innovation. Worse, users and customers have become captive, unable to escape without leaving their data, relationships, and sometimes livelihoods behind.

It’s time for a better model.

So like the inventor of the web, we’ve concluded that the internet must be re-decentralized. With transitive trust and open, standardized protocols, it’s now feasible.

How? User sovereignty.

Multi-sided platforms don’t just hold data captive, they control the more critical element: relationships. You can’t leave Facebook without losing your friends, or Twitter without losing your followers. Gaining control of relationships and the ability to discover new ones are prerequisites to escaping platform captivity, even more than data portability.

Full user sovereignty, the kind that can make re-decentralization a reality, requires open, standardized protocols that enable four capabilities:

1. Owning and controlling relationships (friends, followers, contacts, etc.)
2. Discovering new relationships (friends, followers, riders, drivers, hosts, guests, etc.)
3. Storing personal data in a portable manner
4. Trust sufficient to transact

Protocols for controlling relationships and establishing trust are underway and entering production. Discovery protocols for different verticals have yet to be assembled, but the necessary pieces now exist. Protocols for portable personal data storage are now being developed on several fronts, including by Microsoft, and will usher in a new era of data sovereignty.

Once all four elements are operational, and two already are, markets will open, network effects will accelerate, and playing fields will level. As Twitter founder Jack Dorsey (surprisingly) recommends, to learn more about the need for re-decentralization, read the excellent essay: Protocols, Not Platforms.

5. Cooperative network effects of AW will be exponentially bigger than platform network effects.

When networks “cooperate” some value from one network is transferable to another. Cooperative inter-network effects are exponentially greater than intra-network effects*, like comparing the internet to AOL.

With AW, several credit unions (CUs) in the U.S. are now issuing verifiable credentials to members to enable a streamlined experience when they call in, walk in, or log in. However, any other website could also choose to accept these credentials and offer sleek onboarding and login experiences that eliminate forms and passwords. Which sites wouldn’t prefer instant onboarding and authentication of new customers from cryptographically verifiable credentials issued by a regulated financial institution, instead of forms, usernames, and breachable passwords?

The only obstacle is awareness.

This example shows how transitive trust fosters cooperation between non-competing networks, lowering transaction costs for all parties and increasing the size of two networks through activities in one. Value flows both ways, as CUs benefit from increased satisfaction when members successfully use CU-issued credential outside the CU. And websites are just the beginning: the car dealer, the furniture store and even the sandwich shop could extend credit or offer discounts by accepting these same credentials. In fact, every network that accepts CU-issued credentials grows each time a CU issues a verifiable credential to a member, even if they’re completely unrelated to the financial industry.

This kind of cooperation between unrelated networks, both intentional and unintentional, has rarely been observed or achievable but with AW is predictable. The resulting ‘meta’ network effects—Smith’s Law*—are exponential compared to intra-network effects and beyond Metcalf’s Law. The math is staggering.

*The theoretical basis for cooperative network of network effects is provided in this paper by DTV’s co-founder, Dr. Samuel Smith. It describes a new network scaling law that extends Metcalfe’s law type network scaling to transcontextual value transfer among a network of networks.

7. Strong UX/CX is already critically important; user sovereignty will make it 10X moreso. UX breakthroughs will be the primary driver of AW adoption.

Strong UX is already a competitive necessity. In a world of user sovereignty the stakes climb much higher: customers and users are free to leave if they’re not pleased, for any reason. A startup with breakthrough UX would quickly gain business even in a market dominated by large, established competitors.

We think that’s a very good thing.

AW enables outside-the-box, near-invisible, game-changing UX/CX simply not possible before, making currently clunky processes simple, fast and seamless. Users can customers can finally be recognized as welcome guests, rather than repeatedly treated as strangers.

Early adopters will enjoy significant competitive advantages, which will be the primary driver of AW adoption for years to come.

Attention multi-sided platforms: delight your users and customers while you still have them, or they’ll leave you, which they’ll soon be able to do. (The good news? You can just as easily win them back.)

9.  Privacy will make a big comeback, and become a competitive advantage.

Privacy is not gone, despite the naysayers, and will become an investable advantage for companies that facilitate it. Surveillance capitalism is creepy and facial recognition is running rampant, but we see some light at the end of the dark privacy tunnel:

1. With ubiquitous adoption of AW, having personal information—SSN, credit card numbers, mother’s maiden name, etc.—will no longer be sufficient to impersonate. The incentive to steal PII will collapse, reducing breaches.
2. The value of behavioral data (shopping, browsing) to marketers grows stale over time. AW gives the subject control over who or what can see their current behaviors, making older data held by non-permissioned marketers quickly become less valuable.
3. With AW, the subject controls who or what can communicate with them, and how. Having data about a subject doesn’t give marketers means to display to them their ads, further reducing the value of non-permissioned data.

Advertising will become a meritocracy around permissioned data, where advertisers have unique secure connections to interested customers. Advertisers will not need to guess our interests when displaying ads, we’ll share our interests with the services we like, and they’ll carefully respect the privilege in order to keep it.

As people experience this control and the associated privacy, they’ll become increasingly allergic to offerings that do not provide it.

11.  You’ll soon manage hundreds of private keys, then thousands. Key management will become a gigantic industry, and the new battlefront for fraud.

Some downplay AW because they believe people won’t want or be able to effectively manage their private keys. Truly, the state of the art in private key management UX is awful. But we predict big advances in the technology and UX in all the three R’s of key management: reproduction, recovery, and rotation. 

One promising approach, for example, uses Shamir’s Secret Sharing combined with sovereign agents.

Regardless of AW, many, many keys will soon be generated and everyone (and many connected things) will need a solution.

Securities and real estate will become tokenized and then many other assets, generating still more keys. Pairwise AW will generate private keys for each relationship with other people, organizations, and things.

Edge key management will become a massive industry and of course, the new battlefront for fraud.

13.  AW will help extend identity and financial inclusion to everyone.

Globally, one in three children under five and one in seven people overall do not officially exist.

As we see happening in Sierra Leone, Thailand, Kenya, Senegal, and Myanmar, we’ll eventually see everywhere: self-sovereign identity enabling people to prove many important things about themselves. Even those unable to manage their own credentials—children, seniors, disabled, refugees—can have guardians to assist them.