Personal Data Security in Web3

5 min readJun 30, 2022


Web3, the blockchain-technology-based iteration of the world wide web, is fast becoming the new standard for internet use. Web3 heralds a faster, more secure version of data usage, with the potential for personal information to only be accessed when needed, and never held in large, centralized, databases — prime targets for hackers and data miners.

Although web2 gave us the opportunity for information sharing, online shopping, and remote working, it also brought an onslaught of security breaches in the wake of such personal data stored on public servers.

Cyber-criminals know how to capitalize on the latest consumer interest on social networks and news websites. They capitalize on consumer interest in natural disasters, celebrity doings, and other major news (such as President Obama’s election and Michael Jackson’s death). By using crimeware to booby-trap web pages with keywords on popular news sites, social sites, and fan pages, cyber-criminals reach millions of potential victims.

It has been estimated that web pages are infected with malware every 4.5 seconds, putting users’ computers as well as corporate computers at risk. According to the Anti-Phishing Working Group (APWG), the number of sites infecting PCs with password-stealing crimeware reached an all-time high of 31,173 in December 2008. This is an 827 percent increase from January 1 of that same year. Furthermore, one in five online consumers in the United States have fallen victim to cyber-crime in the last two years.

For example, stolen medical and patient data can be used for illegal and/or bogus treatments, setting up fake clinics, facilitating the purchase of addictive drugs, and obtaining prescription drugs for the purpose of selling them.

Stolen medical and patient data can also result in the loss of health coverage for victimized patients, as well as inaccurate records which could result in incorrect and potentially harmful treatments.

Stolen Social Security or other personal identification numbers can be used for a variety of illegal activities such as opening new credit card accounts in the victim’s name, which results in the criminal’s payment history appearing on the victim’s credit report. Other illegal activities include opening phone accounts in the victim’s name, running up charges on the victim’s existing account, getting utility services in the victim’s name, taking loans out in the victim’s name, and getting a driver’s license or official ID card issued in the victim’s name using the criminal’s picture.

Criminals who steal Social Security numbers can also try to use them to fraudulently receive governmental benefits, land a job, get a fraudulent tax return, rent a house or get medical services — all in the victim’s name. Thieves can even try to use bogus Social Security numbers during police interrogations to avoid prosecution or arrest.

The major difference between web2 and web3 security are:

1. Blockchain technology. By default, a blockchain is a decentralized form of technology that allows no particular person or group to have full control of an ecosystem. Rather, all users collectively can retain control. While there is no single governing entity in blockchain, blockchain is a database that holds records while algorithmically ensuring security and transparency.

2. Proper incentives in the ecosystem. Great blockchain frameworks have seriously considered the incentives to ensure that all actors, from those who maintain the ledger and power the network to the businesses that build on top of the blockchain, actually operate fairly and transparently. When they do not, those actors can be penalized based on the rules of the blockchain or collective voting.

3. Users can and will still share their data, but they will know exactly how it’s used. If blockchain is executed properly, users decide when, how, and how long to share their data. Users also should know exactly how it’s used. If a company sells user data to a third party, the user should know which companies it has been sold to. If searches in Google are used to predict and show users a particular ad, they should know this too.

4. Users can revoke the data they share at any time. If a user is not comfortable with how their data is used or is no longer interested in sharing data with a particular company, they will ideally be able to revoke access.

5. Less Hackable. Blockchain is designed to be computationally impossible to hack today due to a number of safeguards. The mass, global adoption of Bitcoin clearly shows that blockchain is impossible to hack thus far. This is great news, as there have been 98.2 million individuals impacted by the 10 biggest data breaches in the first half of 2021, according to information compiled by ITRC and the US Department of Health and Human Services. As the race against hackers ramps up, blockchain technology offers additional protections.

While we are years away from mass adoption of blockchain technologies, here are a few ways that businesses can be ready and positioned for a privacy-driven future to survive and thrive:

1. Be honest and transparent with how user data is used. The more a business shares, the more likely the user is to trust the business.

2. Be clear in the value exchange to users in cases where user data is needed to operate the business. Many businesses do provide value to users who share their data, and if those businesses can clearly communicate how they drive value, users are more likely to grant access to the data. This enables a more trustworthy relationship with users.

3. Audit business practices to protect user privacy.

4. Keep an open mind toward new technologies like blockchain that may ultimately drive the future of the internet and user privacy. While we are likely many years out from mass adoption of web3 technologies that enable strict privacy, keeping an open mind will enable businesses to make the transition with minimal disruption to their businesses.

Ultimately, web2 has driven incredible technological progress in this world. As a natural evolution of the internet and to combat issues surrounding user privacy/data breaches, web3 is on the way. Blockchain will likely be the foundational technology leading this progress at scale.

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