Current Problems

The Web3 technology stack is still in its infancy and lacks the infrastructure needed to build feature-rich, powerful applications that can compete with Web2 incumbents.
Blockchain brings decentralized computation and Inter Planetary File System (IPFS) introduces decentralized storage for public data. However, a full end-to-end technology stack also requires identity, authentication, messaging, and personal data storage.
Identity needs a new model
Web2 identity systems are managed by centralized entities, creating a power imbalance where users are not in control. Web3 shifts this control with the introduction of Decentralized Identifiers (DIDs), a new type of globally unique identifiers that are cryptographically verifiable.
In reality, an individual has many different identities. Some of these are digital representations of real world identity, while others are digitally native identities. In the Web2 world, a user may have a personal email address, a work email, Twitter handle, Facebook account, passport, and many others. In the emerging Web3 world, we are seeing blockchain addresses, Ethereum Name Service (ENS), verifiable credentials and even NFTs creating new types of digital native identities.
The ever-growing collection of identities in Web2 is riddled with never ending user experience and interoperability problems. It is critical that any new architecture around identity management acknowledges and addresses this changing dynamic.
The X-Project network incorporates a decentralized identity management framework that enables the creation of anonymous identities, that are containers for many different identities. It provides a consent model for sharing these identities, or proof of these identities, to other applications and account holders on the network. Therefore applications seek permission to access their users' data, rather than storing it within the application.
Messaging infrastructure was missing from Web3, until now
Email provides Web2 with a native messaging protocol, which has served the web admirably over the last two decades. Unfortunately, email is no longer a sufficient messaging protocol to meet the increased demands of Web3. It is not anonymous or secure, it doesn’t interoperate with decentralized identity standards and isn’t designed for verifiable communication.
In a world driven by data, it is essential that a messaging protocol for Web3 supports sharing of structured data, not just text / html messages. A protocol that leverages public key cryptography to protect all messages and provide signed proofs of where communication originated.
Email has provided a critical role in the authentication layer of Web2 applications. Users typically supply an email address to login or reset their password via email.
This authentication model doesn’t work in Web3, where users maintain private keys on local devices. In order for applications to become interoperable with each other, the messaging protocol needs to provide assistance with application authentication.
In a Web3 world where users own their own data and maintain their authentication tokens, a messaging protocol must facilitate consensual access to private data with third parties. It must do this in a way that works across multiple chains, to avoid recreating the closed ecosystems of the past.
X-Project is addressing these issues with a highly flexible messaging protocol, leveraging data schemas and consent models. As an example, the X-Project Vault application supports the following off chain private message types: dApp Single Sign On, Application notifications, Request for data and Request to sync data.
Data access and interoperability were hard problems
In a world where users own and control their personal data, it is essential this data can be used across many different applications.
A user’s data may be created in one application but then be made available across others, if they so choose. This unlocks true Web3 data portability. Without this, we will end up with user’s owning their personal data, but siloed within different applications which will drastically reduce its usefulness. It returns us to the data silos that have so commonly formed in Web2.
The X-Project network is ensuring this interoperability exists from the very beginning. Data schemas are first-level primitives to enable this interoperability across all applications built on the X-Project network.
Web3 introduces a new problem, where private off-chain data needs to be made available on-chain to unlock specific use cases. These possibilities include undercollateralized loans in DeFi, Know Your Customer (KYC) proofs or even accepting an off-chain signed police statement as an input to an insurance claim smart contract.
X-Project offers a bridge that connects signed off-chain data to on-chain smart contracts in a secure, verifiable and privacy preserving way.
Decentralized personal data storage doesn’t exist
In a Web3 future, users must have ownership and control of their own data. This requires a new type of decentralized data storage infrastructure that is designed for private, personal data.
Incentivized decentralized storage networks such as Filecoin (based on IPFS), Sia and Arweave have seen significant growth through 2021. The Internet already offers a robust and well established decentralized storage model, so the key innovation provided by these networks is the distributed, permanent, tokenized storage of public data. A public data infrastructure is already commoditized and cheap, presenting challenges to broad adoption beyond ideological aligned proponents of decentralization.
Additionally, these services do not meet the necessary requirements to build feature-rich Web3 applications that offer comparable performance, availability, configurability and security that users and developers are accustomed to with Web2.
For example, IPFS is fundamentally based on torrenting technology. It’s great for sharing public data in a redundant and distributed manner, but it isn’t designed for securing private personal data. It is slow, lacks access controls, and data is distributed in a way that users can’t control. This introduces regulatory issues when data can not be guaranteed to be stored in a particular country.
X-Project’s Storage Node infrastructure addresses these gaps by providing private encrypted databases, user control over where and how their data is stored, real-time synchronization, permissioned data access, and client-side encryption. This approach ensures decentralization of private data, as well as decentralized control, but without the added shortcomings of uncontrolled public distribution.
Identity, authentication, authorization and encryption are anchored by a user’s private keys. The personal data itself is encrypted and stored off-chain, with tight authentication and access controls.
User data needs a business model
Decentralizing personal data is vital for an equitable, democratic digital future.
Many Web2 businesses made fortunes for themselves (and their investors) by helping users create valuable data and then monetizing that data with highly profitable business models. In this case, the user was the product as there is no such thing as a “free” service.
There is increased community and regulatory pressure to reinvent this model, to enable users to own their data and obtain direct economic benefit from its use. A user-owned model also unlocks 7 access to highly valuable personal data beyond the existing monopolies. This will enable a new wave of innovators creating valuable user-centric products and services, similar to how DeFi has opened a new era of finance.
Transitioning from the old Web2 business model to a future Web3 model has some immediate challenges. How can personal data locked in centralized platforms be taken back by users? How are startups incentivized to build the products and tools to enable this transition? How are existing second or third tier Web2 companies incentivized to pivot to a Web3 business model and compete with existing market leaders?
Although users expect services on the web to remain free, Web3 has the potential to offer a more equitable model for all. X-Project will incentivize users to “claim” their data from centralized platforms and earn tokens for using the network. In turn, this revenue stream of tokens can be used to access new pay-to-use Web3 infrastructure and applications that offer hyper-personalized experiences.
Developers are rewarded by building applications with increasing numbers of active users or providing valuable data to the network that can be leveraged by other applications.
This transparent and equitable model allows end users to access a “free / low cost” collection of Web3 applications and infrastructure, without becoming the product.
Slow Web3 mass adoption
There is an increasing number of Web3 wallets emerging for users that has been fueled by the rise of the multi-chain world. Users must maintain wallets for each blockchain and secure multiple seed phrases for backup. Additionally, blockchain addresses are long and impossible to remember, making interactions with others a challenging (and sometimes expensive) experience.
This has severely fragmented the user experience and is holding back mainstream adoption. To onboard the next wave of Web3 users these kinds of friction must be removed.
X-Project believes that by creating a seamless product combining decentralized identity, user owned data and crypto assets will unlock the mass adoption of Web3 applications. It is essential this is executed in a way that provides a seamless end user experience, where the underlying blockchain technology is hidden from view.
The ability for an individual to control their digital life, consent to data use, facilitate peer-to-peer payments, and tokenize private data will inspire products and services that have never before been possible. Society can be positively reimagined because of it.