Why Decentralized Identifiers Are the Key to Ethical AI and User Privacy

As artificial intelligence (AI) becomes integrated into everyday life, it raises concerns about user privacy and data ownership. Petrix Barbosa, CEO of Matchain, emphasizes the potential of Decentralized Identifiers (DIDs) in tackling these privacy challenges.

Privacy and data ownership have long been a topic of discussion in the Internet technology space. When we look at the Web 2.0 era, which focused on user collaboration with interactive platforms, we see challenges around data privacy, identity theft, and autonomy in personal data management. The widespread collection and use of personal data by corporate entities during this period has increased user concerns. Studies show a direct correlation between targeted advertising and many feel that their privacy is being sacrificed for commercial profits.

The vast majority of users say they value privacy. Source: Cisco Consumer

Privacy Survey

Billed as the next evolution of the internet, Web3 aimed to address issues of centralization while focusing on empowering users. While decentralized Web3 networks are the answer to centralized data warehouses that compromise user privacy, on-chain identities lack interoperability. Despite their promise, the Web3 landscape is plagued by fragmentation issues.

What makes matters worse is that current AI models continue to use personal data without explicit consent, increasing privacy concerns and allowing companies to profit at the expense of user rights.

Users Have Trust Issues with Companies That Use AI

As discussed at the World Economic Forum, privacy protection is becoming a public policy issue worldwide due to the excessive use and mismanagement of personal data by some companies. Much of the sensitive data belonging to users is collected to improve AI-powered processes. Search algorithms, voice assistants, and recommendation engines are just a few of the solutions that use AI based on large datasets of real-world user data. 

Centralized AI platforms, like Google and Facebook, craft a reality where data monetization often occurs without explicit user consent, creating a breach of trust. The opaque nature of data transactions in these models heightens the risks of data misuse and diminishes user control.

Most Europeans think that effective control won’t be exercised over companies using AI. Source: European Consumer Organization

As a result, this model has led to a troubling paradox: As AI capabilities expand, the potential for misuse of the data that feeds it increases. It’s no surprise then that 59% of consumers believe that companies generally care more about profiting from their data than protecting it.

Thankfully, the challenges surrounding user privacy and data management are not insurmountable. Blockchain technology emerges as a pivotal solution in various sectors, particularly when integrated with AI, spearheading a transformative approach to user privacy.

Enhancing User Privacy with Decentralized Identifiers

The integration of decentralized identifiers (DIDs) within the Web3 framework marks a significant advancement in enhancing data security and privacy. DIDs empower users to manage their digital identities independently, without the need for centralized authorities, fostering a more secure and autonomous online presence. Verifiable credentials complement this by offering a cryptographically secure method to authenticate and verify these identities without compromising privacy.

The architecture of DID ensures that personal data is shared only with explicit consent and strictly for its intended purposes. Such a system not only enhances user control over personal information but also significantly reduces the risk of unauthorized data access and breaches.

Multiple DIDs can be used for different purposes and types of interactions.

The technology is taken a step further with layer-2 aggregations that integrate AI functions directly into the blockchain. Thanks to the integration, sophisticated AI algorithms can be leveraged to create comprehensive solutions for identity aggregation and data interoperability across different platforms.

For example, decentralized AI blockchain Matchain, which launched its mainnet at the end of August, uses this technology through its data aggregator MatchID, ensuring that data is shared only with explicit consent and for the intended purpose. MatchID redefines digital identity with a low-threshold DID record that seamlessly integrates Web2 users and bridges interactions across multiple blockchains. It also provides users with a dashboard that shows their data points or values ​​based on their digital footprint and activities across various applications and dApps. The system allows users to seamlessly transition from Web2 to Web3 while maintaining control over their data.

Making Privacy a User-Directed Choice

In addition to technical advancements, the development of decentralized platforms also focuses on ethical AI practices and user empowerment. By prioritizing privacy, data ownership, and ethical data usage, these platforms are setting new standards in the digital ecosystem. They aim to democratize data ownership, making privacy a user-directed choice and providing the tools necessary for users to leverage their data for personal, social, and economic benefits.

Matchain CEO Petrix Barbosa argues that decentralized identifiers are opening a new chapter in the blockchain community. With the official launch of their mainnet, he aims to enhance DApp capabilities and drive further blockchain adoption.

As blockchain technology continues to evolve, it not only enhances security and privacy but also has the potential to transform the management of digital identities and user data. This technological shift represents a significant stride toward a more secure, user-empowered, and ethically guided digital future.