Despite the recent malaise in the cryptocurrency market, several Web3 companies are pushing the development of blockchain technologies.

One such startup is NEST. Founded in 2017, the London-based company is developing a next-generation blockchain infrastructure to facilitate distributed and confidential identity and asset control across chains.

krASIA chatted with NEST founder and CEO Charles Anderson, who shared his thoughts on current trends in the Web3 space.

This interview has been consolidated and edited to be brief and clear.

KrASIA (Kr): Tell us about your background and how you started NEST.

Charles Anderson (California): I was born in Papua New Guinea and have lived in mainland China, the US and the UK. My parents used to work at the United Nations Educational, Scientific, and Cultural Organization, so we moved around a lot.

I went to the University of Melbourne and studied media communication, law, philosophy and film. But I got a job at Google, so I ended up doing search engine optimization and working on back-end development. After that, I ran an artistic collaboration service for seven years.

Around that time, I got annoyed with smart contracts. They were “smart”, but really they were just static, monolithic things. This got me thinking: if you take something like a service or a sales contract or a commitment into the real world, how do you make it not only private but also secure and “immutable”? How can someone with zero knowledge of blockchain own and control their own contract, and facilitate it with crypto or fiat?

This is the problem that NEST has defined and is exploring.

Kr: SSDID seems like a key feature of the NEST platform. Tell us more about that.

California: People don’t understand SSDIDs and they have been misappropriated or misused in a way. So we have to focus on their practical implementation before presenting them as something people can understand.

There is a DID, which is a decentralized line of identification: if you go into a service and ask for a DID, they generate it on demand and give you the key so you can use it to log in. But they have their private key, so it’s really centralized, and you’re just running with a single ecosystem signature; it’s more like getting a cookie from facebook than an actual DID. When we say SSDID, as far as I know, it’s the first stand-alone ability to not only maintain but also generate those verified credentials.

The structure we have gives users the option to generate or exchange credentials. If you are a bank, you can reach out to me, and I have my primary SSDID, and start an onboarding process with you so I can use your servers. That parent creates a one-time child DID. I can provide you with the necessary information from here without ever disclosing this information to parents and by using a single-use Anti-Money Laundering (AML) certified authenticated DID or Know Your Customer (KYC) that I control. I have all my credentials verified and I never divulge my main one – the main wallet.

Kr: What do you think will be the most common use cases for NFTs in the long term?

California: I think they will be membership NFTs. You can combine SSDID and NFT to create a QR code for real world engagement interactions on the site. You can do it with ticketing. Let’s say your ticket comes with five free drinks and a free t-shirt. You can scan a QR code and have an automatically authenticated point of sale. I think there’s that ongoing interaction for commitment, ownership, and control in the real world.

After that I would say it’s closer to what’s going on with Soulbound tokens and user identification, credential management and verification. But I doubt that’s really going to last.

In the long term, I think they will be used for “data as an asset”. Having this capability on my phone means I can take something like my browsing history and personal data, bundle it up, and then sell it to whoever I want. This creates the potential for various types of individual monetization: secondary markets for tickets, collectibles, and even personal data, with tangible, real-world uses.

Kr: Critics of Web3 say that it focuses on monetization. What are your thoughts on this?

California: Practical implementation is often the missing piece. When you look at, say, NFT ticketing, you have a tangible utility because people can show up and get into a venue; has inherent value. But if you’re talking about the economics of things, we’re back to the days of initial trade offers, when you’re relying on utility and hoping the next guy will pay more than you do.

So the question is: does it have practical utility or is it just hype? Mainly, I don’t see the practical utility, or to me, for many projects, it’s not immediately clear.

Kr: Another criticism is that Web3, especially DeFi, is not really decentralized. Do you agree?

California: Yes, 100%. We did a lot with gamification, games and their structures, and even in that space, people don’t appreciate that the whole ecosystem or the network is there just because of the players and their individual participation. Whether you’re talking about DeFi or something purely centralized, the underlying ethos is that unless that person has a choice, you’re not decentralized.

In terms of SSDID ownership, NFT master file ownership, or encrypted data, NEST allows storage to be a kind of quantum-proof network run by its users. We call it a kind of fail-safe. We allocate, for example, one hundred megabytes on your phone, which allows you to store fragments of other people’s structures. If a single network were to fail, you could always recover your data, and you are the only one who could put it back together.

This is how we approached it, while we were saying that we have private key recovery and decentralized structures. But they are all in walled gardens. Ethereum or Cardano have wonderful structures, but they are still within their walled gardens.

That’s another thing with proof of stake; having enough money may allow you to take over that walled garden. From the pure definition of decentralization, I would say that it’s generally more distributed, but it’s not decentralized.

Kr: What do you think about having that kind of balance instead of a more centralized structure with regulation?

California: It is very difficult to talk about what works for different environments and different people. I would say my focal point is giving people choice and control.

If you have your personal encryption, only you can disclose the transaction you have made. Only you can perform the authorization; having a sense of agency is necessary for anything to work.

But when that option is taken away from you, that’s when you’re really getting into trouble. That’s when the technology is worthless because it’s better to go back to regular ledgers, which are essentially a centralized service.

Kr: Is there anything in particular that you find exciting right now?

California: Seeing how the NEST team grows and how things come together is one. I’ve been upside down in the garage for four or five years, and that was a period with an incredible amount of stress without having any validation that my ideas were correct.

What really motivates and excites me is the introduction of choice and control for people. I never imagined that a bank would use AML or KYC and then provide privacy control. When you break that ability to compromise and control and reposition the power of that structure, and see how it spills over into markets and niches, and the way people use it; seeing all this change really excites me.