The 16 billion password credentials hack is no longer news. Global news broke out last week, alerting users of major tech firms such as Apple, Google, Facebook, etc, that they had suffered a massive data breach affecting billions of user accounts. Of course met with different reactions, such events underlines the relevance of decentralized data storage and management.
Especially for web3 for identities, such events must be prevented, requiring the need for password elimination and users self-protecting their data, to avoid loss from centralized breaches and password hack compromises. Therefore, in today's article, we shall be discussing why passwords don’t belong in web3, and how passkeys act as the perfect alternative to secure users from password based hacks and compromise.
Passwords remain a critical vulnerability in today’s digital world, even within decentralized systems. Although Web3 aims to give users control over assets and identity, most users still rely on weak, centralized authentication methods like passwords to achieve this. This reliance contradicts the core principles of decentralization, and leaves systems vulnerable to phishing, malware, and credential reuse attacks. And at this moment, the illusion of user sovereignty crumbles when it hinges on just a string of characters.
With respect to the hack above, researchers uncovered a record-breaking leak of over 16 billion credentials, gathered from individual user devices infected by infostealer malware. These credentials included access to major platforms like Google and Facebook, compromising both traditional and Web3 accounts. While the leak didn’t breach decentralized infrastructure directly, it exposed how much of the online user layer still depends on centralized login habits.
For the web3 space, this leak highlights a major point for concern. This means crypto wallets can be compromised through weak browser security, and even while using dApps that depend on extensions which are vulnerable to phishing. Without securing the way users authenticate, decentralization remains incomplete and open to malicious attacks.
Therefore, to move forward, the ecosystem must adopt modern, passwordless alternatives. Such as Passkeys, Decentralized identifiers (DIDs), Biometric identity security, etc, without requiring users to manage passwords or seed phrases at all.
Passwords have long been the weak link in digital security. Guess-able, reused across services, and frequently stolen through phishing or malware, they account for over 80% of data breaches. In contrast, passkeys offer a modern solution that eliminates the majority of the risks that password usage creates, while providing a smoother user experience.
A passkey is a cryptographic credential tied to your device. Instead of typing a password, you authenticate using a biometric method like a fingerprint or Face ID, or a device PIN. Behind the scenes, your device uses a private-public key pair to achieve this: the public key is shared with the service you’re logging into, while the private key remains securely stored on your device. When you sign in, your device signs a challenge using the private key to prove who you are, without transmitting any secrets.
Unlike passwords, passkeys:
According to the FIDO Alliance, passkeys can reduce account takeover risk by 99.9% when used with on-device biometric security. Tech giants like Apple, Google, and Microsoft now support passkeys across platforms, enabling secure sync and seamless logins across phones, laptops, and browsers.
In Web3, this shift is more than a convenience, it’s a necessity. While decentralized protocols aim to eliminate single points of failure, passwords still reintroduce centralization at the user level. Web3 wallets, identity apps, and dApps that adopt passkey-based authentication gain a major security upgrade while staying true to decentralization’s core principles. In short, passkeys enable trustless access that’s actually safe and trustworthy for users.
Introducing passkeys into a platform’s authentication system significantly strengthens both security and customer support operations. Most traditional support teams often spend a large portion of their time addressing password-related issues such as forgotten passwords, account recovery after phishing attacks, and compromised login credentials. And these issues not only increase operational costs but also expose users to repeated security risks. This is another key benefit of passkeys.
Passkeys eliminate several of these pain points by design. Since there is no password to forget, reuse, or phish, support teams see a drastic reduction in common issues like account lockouts due to incorrect password attempts, credential theft from phishing or malware, unauthorized access via reused or leaked passwords, and recovery requests hacks tied to insecure email or SMS channels. This allows support staff to shift focus from reactive problem-solving to proactive user education and onboarding. For by helping users understand how passkeys work and how to use them across devices, support teams can empower users with safer authentication habits from day one.
To normalize this standard, proper education is key. Users should learn:
i. How to register and back up their passkeys using trusted device ecosystems (like Apple iCloud or Google Password Manager),
ii. How to set up biometric authentication securely,
iii. What to do if they lose access to their device and how to recover through linked devices or secure sync,
iv. Why passkeys are safer than traditional passwords or 2FA codes.
This education is where support teams play a crucial role, charged with the responsibility of providing well-crafted help center content, in-app walkthroughs, and guided assistance. This is to ensure that they can empower users not only to adopt passkeys, but also on how to use them securely and confidently. Over time, this reduces both support volume and user risk exposure, while increasing overall trust in the platform’s security posture.
Summarily, by replacing passwords with passkeys, organizations don’t just improve security, they create a smoother, more resilient support experience that aligns with the principles of decentralization and user empowerment.
Web3 was never meant to be a patch on old internet habits. At its core, the movement is about user sovereignty where owning your identity, data, and assets happen without intermediaries. But true sovereignty is impossible if users are still relying on outdated, centralized security mechanisms like passwords. So long we keep dragging legacy vulnerabilities into new systems, we limit the very potential that decentralization promises.
This is the time for Web3 builders to design with the future in mind. That means integrating technologies like passkeys and decentralized identity from the ground up, not as afterthoughts, but as foundational components. By building products that are secure by design, not just secure in theory, we move closer to a Web3 that is actually trustless, user-owned, and resilient at scale. The next generation of decentralized apps won’t just remove middlemen, they'll remove old risks entirely.
