Despite objections from several prominent consortium members, the W3C consortium has decided to move a specification for Decentralized Identifiers (DID) to W3C Recommendation status.
While still in its early stages, DID promises to give web users more control over their digital identities.
What is a Decentralized ID?
Decentralized IDs (DIDs), also known as decentralized identifiers, are digital IDs where individuals’ identifiers are replaced with self-owned IDs stored on the blockchain, and their associated data is stored on personal devices.
You can create your own DID or have a DID provider. Then, for verification, you turn to issuers (e.g., government, school, bank) to provide claims against it.
These DIDs have numerous use cases, such as enabling credible and private customer KYC, eVoting, tax payments, event check-ins, etc.
What are Verifiable Credentials?
Verifiable Credentials are an authentication method that verifies the selected identity aspects of the holder. The selective nature of VCs is important because, unlike traditional credentials or accounts, Verifiable Credentials don’t need to store all personal or account information.
This is all kept in your digital wallet. VCs only prove your specific rights about the issuing service.
Life writes the best scenarios. The need for VCs had proven very practical in recent months when refugees from Ukraine arrived in Poland, in many cases with no or incomplete documents.
Verifiable Credentials could help solve this problem. Once issued, people can prove at any point that the authority issued such a document.
The Benefits of Decentralized Identity
Data Ownership- Today, most people voluntarily share their personally identifiable information (PII) (e.g., name, age, phone number, etc.) with brands in exchange for easy and personalized experiences.
Unified Identifiers- DIDs provide users and businesses with a single version of the truth as they represent all the information about an individual, including their demographics, financials, and social status. This eliminates the need to create multiple identities for different platforms as we do today (e.g., for each social media platform, we have a different account).
Data Protection- Sharing personal data with businesses increases its exposure to cyber-attacks and breaches. It’s been reported that by the end of 2021, more than 4,000 data breaches were disclosed publicly, exposing ~22B private records. Leveraging DIDs to communicate your data with businesses protects your data from being stored on centralized and breachable databases. However, this would leave you responsible for protecting the data stored on your devices. This represents an opportunity for businesses to ensure their compliance with global data privacy regulations while maintaining credible and verifiable KYC journeys.
Final Thoughts
Decentralized IDs are digital identifiers that aim to put users back in control of their identity and associated attributes. A decentralized ID has three aspects: The issuers, the verifier, and the ID owner.
The need for DID and VC see becoming more important this season.
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