Opinion: Researcher at NYM Technologies, Casey Ford, PhD
Web3 has been caught up in a wave of decentralization. Decentralized Applications (DAPPS) rose 74% in 2024, with individual wallets increasing by 485%, and total distributed finance (TVL) (TVL) closed at a nearly record high of $214 billion. But the industry is also heading straight towards a capture state if it doesn’t wake up.
Elon Musk teased the US Treasury Department on the blockchain, but was not thought of much, but the trend is changing as cryptography is deregulating. But is Web3 ready to “protect (user) data” as Musk pledges when they do so? Otherwise, we are all on the crisis of a global data security crisis.
The crisis is summarised into vulnerabilities at the heart of the digital world. It’s all existing networks’ metadata monitoring, and even Web3’s distributed network. AI technology is currently at the foundation of surveillance systems and acts as an accelerator. Anonymous networks provide a way out of this capture state. However, this must start with full metadata protection.
Metadata is the new frontier of monitoring
Metadata is a source of AI monitoring that is often overlooked. Compared to payload data, the metadata is lightweight, making it easy to process large amounts of data. Here, AI systems are the best. Aggregated metadata can reveal much more than encrypted content: patterns of behavior, networks of contacts, personal desires, and ultimately predictability. Legally, end-to-end (E2E) encrypted communications are not protected in the way that is currently in some regions.
Metadata is part of all digital assets, but the metadata leaking from E2E encrypted traffic exposes us and our work: IPS, timing signatures, packet sizes, encryption formats, and even wallet specifications. All of these are perfectly readable for enemies monitoring the network. Blockchain transactions are no exception.
From the mountains of digital junk, gold mines of all the detailed records we do can emerge. Metadata is our digital unconscious and can be grabbed for a machine that can harvest it for profit.
The limits of blockchain
Securing transaction metadata was an afterthought in blockchain technology. Crypto offers no anonymity despite its reactionary relationship between industry and illegal trade. It provides a pseudonym, the ability to hold tokens in the wallet of the selected name.
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Harry Halpin and Ania Piotrovka diagnosed the situation:
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