Vitalik Buterin Says Digital Identity Propositions Put Pseudonymity at Risk

Pseudonymity is a pillar of crypto and Web3, which gives the space its uniqueness. However, that core aspect could be threatened with the release of new Digital Identity Schemes, according to Vitalik Buterin. The Ethereum co-founder and tech genius has raised an alarm about the digital identity project called World, warning that it may threaten online pseudonymity. 

Buterin notes that despite using zero-knowledge proofs, World’s “one ID per person” model could link all user activity to a single identity. As the push for digital identities intensifies, Buterin shines a spotlight on an urgent matter that could jeopardize one of crypto’s identities. 

Buterin Discuss the Risks and Rewards of Digital Identity Projects

In a statement made on Saturday, Buterin discussed the risks and rewards of digital ID projects, specifically the Sam Altman-backed digital ID project World. The thought leader said the project could destroy pseudonymity that so many crypto lovers have come to enjoy. He said that although World uses zero-knowledge proofs, everyone will edge closer to an era where everyone’s activities will be in the open.

“In a world of growing risk (eg. drones), taking away the option for people to protect themselves through pseudonymity has significant downsides,” the Ethereum co-founder said. Although he praised the privacy capabilities of zero-knowledge IDs, which is useful for verifying data, such as age or nationality, he cautions that these models may undermine the ability to maintain separate online identities. 

World is a digital identity project developed by Altman and his team to give every human a unique digital persona. Users will have their eyeball scanned to prove their humanity. In turn, they are given a World ID and crypto bonus called WLD tokens. The biometric data collected from the scan will be protected using zero-knowledge proofs or ZK wrapping. 

Buterin Advocates for a Pluralistic Identity System without Centralized Control

Buterin thinks that digital identity initiatives with zero-knowledge proofs will go mainstream. He even admitted that there are benefits, such as protecting the internet against manipulation from bots, without compromising privacy. However, he argues that digital identity will make it impossible for everyone to have multiple identities. He cited an example, where a user today could have 5 Google accounts, without a digital ID, but only one ID with World. 

As opposed to World or digital identities that prioritizes one ID per person, Buterin proposes a Pluralistic Identity System. This system allows a user to keep multiple accounts/profiles without centralized control. A user could have a separate professional ID and pseudonymity. Furthermore, identity will be community-backed, ensuring inclusion. 

Buterin calls the Pluralistic Identity System “more error-tolerant” and better suited for marginalized groups. Buterin’s suggestion comes from a user perspective. With many points raised about ZK proofs and one-per-person ID solution, Buterin’s message is clear: pseudonymity shouldn’t be sacrificed. The world should opt for pluralism to maintain freedom and autonomy, rather than the centralized World. 

What’s Next for World

World has attracted criticism from privacy advocates months after launching. However, the project has gained momentum in the United States and Japan. For instance, the project plans a Visa card in the U.S. In Japan, it has partnered with Tinder to provide users with greater exposure to identities of those that are interacting on the app. 

The project is going mainstream, and will attract more partnerships in the future. However, decentralizing identity in crypto will be somewhat impossible with World. This is a cautionary tale from Buterin.