The facts of life have changed in the digital age; identity is everything the way we receive services, prove we do exist in the digital identity and the way we deal with governments, business and social online spheres. However, the conventional identity systems have been entrapped with confusion, insecurity, and central control. The emergence of blockchain digital identity is the rebranding of individual control over their personal data, finding an uprising trend toward decentralized identity model and self-sovereign identity (SSI).
In this blog we are going to discuss about the promise of blockchain-based identity solutions and underlying technologies. These solutions are Decentralized Identifiers (DIDs), zero knowledge proofs and how they are transforming digital identity as we know it in this era of Web3.
So what is Digital Identity?
A digital identity can be defined as a set of attributes that describe a person or an organization uniquely and can be electronically stored that can enable an online authentication and verification. It mostly comprises:
- Name
- Birth day
- Biometrics
- Email address
- Access credentials or passwords
Digital identities were able to create huge online ecosystems but it has also put the users in danger of being spied on, swindled, and having their data stolen- in most cases because of centralized data silos.
Centralized identity vs. Decentralized identity
Centralized Identity System
Historically, identity verification is dominated by the government and financial institutions and major tech platform that are Facebook or Google. Such systems lock personal information in centralized databases, which present single points of access and the place to target by hackers.
The Trend to the Decentralized Identity
Decentralisation of identity abolishes central authorities and puts control in the hands of the individual. Rather than using institutions to manage identity, with blockchain technology peer-to-peer identity systems may be realized, where individuals own and are in control of their own verifiable credentials and can share them with others.
The essence of the Blockchain Digital Identity
Technology can power an identity solution without a centralized source, and Blockchain is that technology.
The decentralized, read-only, and durable blockchain structure allows it to be a secure system to place identity credentials. So here is how it works:
DIDs (Decentralized Identifiers): Identifiers, which each person can generate and control without the use of a central registry.
Verifiable credentials: Documents signed by trusted sources (e.g. Universities, Governments) and stored in a digital manner.
Blockchain Authentication: The public blockchains have the DIDs, as well as credentials metadata, stored and verified in a manner that guarantees authenticity.
Major Capabilities of Blockchain Identity Solutions
- User Control: You determine what, when and who will see what.
- Security: Cryptographically-protected tamper-proof credentials.
- Interoperability: Standards such as SSI blockchain as well as W3C DIDs enhance co-platform use.
- Portability: Your digital ID moves with you between platforms, countries and ecosystems.
- Self-Sovereign Identity (SSI): Digital Ownership of the Future
What is SSI?
Self-sovereign identity refers to the idea that humans ought to possess end-to-end the ownership and control of the identities they explore digitally without the need of a central-issuing body to validate the identity. SSI expands on Web3 identity management concepts giving the user:
- Credential ownership
- Sharing on bases of permission
- Full use audit trails
- Opportunities of SSI Blockchain Solutions
Benefits of SSI Blockchain Solutions
- Less Fraud: Single point of failure gone:
- Increased Privacy: The users only post what is a necessity (selective disclosure)
- Trustless Verification: There is no necessity to rely on mediators
It is becoming apparent that SSI is already the mainstay of identity in Web3, where a transparent but confidential system is provided to control online digital presence.
Applications of Blockchain Digital Identity
1. Finance and Banking
Blockchain identity verification also optimizes KYC (Know Your Customer) and AML (Anti-Money Laundering) operations, keeping them cheap and safe against fraud.
2. Healthcare
Decentralized identity platforms allow patients to take control of access to their medical records, and their data can be easily transported with high levels of data privacy and security.
3. Education
Universities can also establish plastic credentials such as diplomas or certificates on blockchain, which remove the possibility of credentials fraud.
4. The government and eGovernance
Voting systems, national IDs, and other public records can be digitized and made secure with an authentication mechanism through the blockchain.
5. Border Control and Travel
Decentralized identity administers faster border crossings due to pre-verification of digital IDs in the wallet of a traveler.
Blockchain Digital Identity Technologies
Decentralized Identifiers (DIDs)
DIDs are cryptographically verifiable, immutable and globally unique identifiers that do not need centralized registration. They can be intertwined with blockchain registries in order to verify identity without the intervention of a third party.
Zero-Knowledge Proofs Identity (ZKP)
Zero-knowledge proofs enable a user to demonstrate that a given statement is correct (such as age, citizenship, or credit score) without producing the information. This is imperative in privacy preserving identity systems.
Case in point: Showing that you are 18 years and up without having to give your date of birth.
Front Running Platforms & Protocols in Decentralized Identity
A number of organizations are leading the way of decentralizing identity:
- Microsoft ION: This is based on bitcoin and counts on DIDs to provide safe identification.
- Sovrin Network: A public utility of SSI in form of open-source.
- uPort (by Consensys): Ethereum-based self- sovreign identity
- Civic: A decentralized verification and digital identity application using blockchain to support identity verification without sharing a large amount of data.
- Polygon ID: is a newly developed Web3 identity management scheme that is centered on ZKPs.
These avenues promote the use of interoperability where even digital identities can be easily used across different ecosystems.
Blockchain Digital Identity Security: Are Blockchain Identities Safe?
One of the best reasons why blockchain is optimal to digital ID is security:
- Immutable Ledgers: Stop tampering and loss of data
- Public-Private key encryption: The rightful owner can access data and share data only
- Decentralization: dispenses with single points of failure
- User-Centric Permissioning: Nothing obtainable without a myriad of consent of the user
Nonetheless, there are still issues, as the management of keys (key management) (losing your private key can mean you lose your access), and the regulatory assistance (six more at the list), and many other issues.
Regulatory and Ethical Consideration
Regulators and governments across the world are tentatively considering blockchain digital identity. The priority issues are:
- Privacy rights: What is the balance between transparency and personal privacy.
- Laws on data ownership: Who owns the digital credentials in the law?
- Standardization: The development of jurisdictional universality.
Nevertheless, there are many obstacles on the way to the digital identity of tomorrow moving towards consumer power and trans-national interoperability.
Future Hurdles to Decentralized Identity
Although the potential is huge, adoption hindrances are:
- User Experience: Keys and wallets are complicated to handle by non-technical users.
- Network Effects: SSI and DIDs can only make strides when they have plenty of institutional support.
- Trust Frameworks: So who determines which issuers are to be trusted? What can be done to stop identity fraud in decentralized systems?
To overcome them, governments, technical firms and standard bodies have to work together.
What Is in the Future of Digital Identity?
As Web3 reaches maturity, Web3 identity will form an infrastructure of online communication. These trends should be expected:
- Broader Government Use: National blockchain based digital ID efforts
- Interopenable wallets: A single wallet to access the services across the world.
- Biometric Integration: Managing Blockchain with biometrics to get multi-factor authentication.
In AI + Blockchain scenery, data integrity will be ensured by blockchain, and fraud could be detected by artificial intelligence.
Finally, we can also expect that the future development of the digital identity will be the creation of the trustless, unsafe and user-owned internet.
Conclusion:
In conclusion, the individual strengths of Personal Information Empowerment in a Decentralized World.
The change to which we are witnessing is a paradigm shift to decentralized identity ownership driven by a paradigm shift in centralized data control. Blockchain digital identity and self-sovereign identity technologies present not only an enhanced security of digital IDs, but also a more morally acceptable and more inclusive perspective to the identity in the digital age.
As innovation continues to pick pace and economic belief systems located around conventional systems falls reduce, the blockchain based identity options will present a new way of authenticating, communicating and living online.
The doubt now is no longer whether, but when decentralized identity will be the new normal.
