Digital identity has been a fraught subject since the earliest days of the internet. Web2 bridged the gap between people’s offline lives, online identities, and creative and consumer habits, which has given way to a thoroughly integrated internet experience designed to be as personalized and targeted as possible. As a new phase of virtual interaction and digital identity appears on the horizon — one even more interconnected than Web2 — we need to rethink personalization and ownership with an eye to what did and didn’t work in the world of Web2.

While there is no blueprint for the Web3 identity procedure, we can predict the trajectory that digital identity in the metaverse will follow. This trajectory is already taking shape.

Everything you know, decentralized

Virtually all aspects of the internet as we know it are ripe for decentralization. Chat and messaging services are private and encrypted, browsing is incognito, and transactions happen between individual bank accounts (albeit mediated by an intermediary) — all signs point to a system that is user-controlled and caters to the individual rather than to the collective.

The rise of the internet isn’t the first time we’ve seen this progression, either. The radio began as a series of AM stations, gradually expanded to include FM, and then developed satellite capabilities that provided universal access to a variety of stations. Web3 and the way identity functions within it roughly correlate to satellite radio. So, in the history of modern communication systems, the arc bends toward decentralization.

In this new space, a person’s crypto wallet will be the key to their establishing a presence in the metaverse, from serving as an entryway into games to helping them build nonfungible token (NFT) collections to allowing them to do business. Crypto wallets will be connected to everything users already do on the internet and in every online activity yet to come.

Related: Web3 is crucial for data sovereignty in the metaverse

The future of ID(entity)

People who are accustomed to traditional markets can be confused, intimidated and even deterred by the crypto-based ownership revolution. But it’s the means (identification), not the ends (identity), that are changing.

A user’s crypto wallet will function as a key, accessing all their domains, real estate, NFTs and other virtual properties. Should they lose that key, they’ll have to wait until its term expires to renew it. That said, the wallet will be so integral to everyone’s online identity that a total loss is unlikely to happen, and there are companies actively developing solutions to combat such losses.

Identity won’t be transformed on its own, but in relation to ownership as well. For instance, crypto wallets will have a hand in the purchase of web domains. Third-party supervisors like the Internet Corporation for Assigned Names and Numbers (ICANN) will no longer hold sway over users’ ability to buy a top-level domain (TLD) or mint a subdomain off of it, and users will not have to request permission to do this themselves. Ownership of domains will become newly permanent; even minting a subdomain off of a previously-owned TLD will grant a user indefinite ownership of that subdomain.

This will all be possible only through a crypto wallet. With the hype we’ve seen around the metaverse and NFTs, Ethereum and other wallet addresses will be the primary conduit for amassing virtual wealth.

Related: Identity and the metaverse: Decentralized control

But what of Web2?

All this is not to say that Web2 will become completely or instantaneously obsolete. It won’t fade away, but it will be incorporated into Web3 spaces. Domain ownership, for example, will become backward compatible with ICANN standards, meaning individual owners will attain the same legitimacy as they did in the past by acquiring a domain through ICANN.

Services like PayPal will naturally continue to exist: Those accounts will eventually be connected to a wallet address instead of to an email address. This shift is already happening across mainstream finance platforms and retailers.

Streamlined and accessible

Given the possibilities of crypto wallets, the future of domain purchasing and digital identity will pair a collective-benefit mindset with individual ownership. It will revolutionize the way we identify online. Domain name service (DNS) records, which are used to trace URLs to IP addresses, have thus far been needed for resolvers, but this resolution will occur natively in a fully realized Web3 environment. In a similar way, many of the extra steps needed in Web2 ownership and identification processes will be rendered unnecessary.

These changes will ultimately result in immutable proof of identity on the blockchain. Once a user purchases a property, be it a domain or an NFT, they will own it; no organization can retract or tamper with that ownership. The prime goal is accessibility across the metaverse. We need to develop systems that promote viability, practicality and utility in order to create an internet that works for everyone.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.