Identity plays a vital role in our daily digital lives, from accessing websites and apps to proving our credentials online. Today, traditional identity systems are no longer reliable following countless data breaches and the unethical use of consumer data by companies for advertising, market research and algorithms.
Enter Decentralized Identity, a revolutionary concept that aims to set higher standards in data privacy and user empowerment.
In this article, we dive into the world of decentralized identity, explaining its principle and its key components. We will also talk about how decentralized identity systems powered by blockchain technology are being used to revolutionize the way we use the internet.
What is Decentralized Identity?
Decentralized identity, also sometimes referred to as self-sovereign identity, refers to the concept of self-owned digital identities that are not controlled, managed, and stored by centralized third parties.
Decentralized identity technology aims to ensure that each person has full control and privacy over their credentials. At the same time, the technology seeks to provide a universal and trusted system where digital IDs can be used seamlessly for personal verification on the Internet and in person.
Blockchain technology is used as the underlying infrastructure for decentralized identity solutions. Indeed, public blockchains provide (almost) immutable databases that can be used to store and retrieve data in a decentralized manner. Blockchains like Bitcoin and Ethereum are distributed databases with a diverse, global network of participants that verify and process transactions. The decentralized nature of these public blockchains makes it extremely difficult for a centralized entity to take over, modify or hack into the system.
Principles of Decentralized Identity Solutions
Decentralized identity solutions are modeled on the following principles:
Decentralized identity solutions must be secure enough to prevent data leaks, hacks, and identity theft. Ideally, they also ensure that verifying your identity does not require disclosing all of your personal information.
Decentralized IDs ensure that users have full control over their personal data and information and prevent users from being tracked by websites.
Decentralized IDs should be open to everyone, regardless of age, gender, race, nationality, political status, and socio-economic status. Decentralized identification solutions must be easy to use and readily available in order to be universally recognizable.
All components of decentralized identification technology must be sufficiently decentralized. This could encompass credential solutions, underlying databases, authentication and authorization protocols, recovery solutions, etc.
How do decentralized identity systems work?
A decentralized identity system relies heavily on its underlying network called a trust system, which can be a blockchain protocol or a non-blockchain protocol. In the case of blockchain, the many independent nodes that maintain and update the blockchain ledger in a decentralized manner help establish a trustless system.
Decentralized identity systems can also be established in non-blockchain infrastructure. For example, Nostr is an open, non-blockchain protocol that provides developers with the infrastructure to build decentralized social media networks.
The two main components of a decentralized identity system are decentralized credentials and verifiable credentials.
You can compare decentralized IDs to the current usage of email addresses and social media IDs used when logging into a website. However, these Web 2.0 identifiers are not designed to protect user information and privacy.
In contrast, each decentralized ID is designed to be globally unique and verifiable across any platform. These decentralized credentials provide users with (near) immutability, censorship resistance, and enhanced security. Additionally, decentralized IDs will also allow users to delete data associated with their ID.
Verification of the authenticity of the decentralized ID is essential. This is where verifiable credentials come in. Think of them as your driver's license or passport that you can use to prove your identity.
Verifiable credentials allow users to verify their identity without disclosing too much personal information. In a decentralized identity system, the user will own and control their verifiable credentials. One of the most promising innovations in verifiable credentials in the blockchain world is called zero-knowledge proof (ZK-proof).
ZK proofs are arguably the most prominent blockchain technology that enables decentralized digital identity solutions – at the time of writing.
What is a ZK proof? A ZK proof is a cryptographic method that proves the validity of a statement without revealing information about the statement. Decentralized identities powered by ZK evidence enable personal verification and attestation without disclosing any personal information to third parties.
For example, if you want to create an account on a social media platform. You can simply submit your decentralized ZK proof ID to verify your identity. You will not be required to provide any personal information such as email address, age, name, location, date of birth, as required when "registering" or "creating an account" on a website.
All you need to perform a series of actions that can only be performed with the underlying identity information, but do not contain any of the information itself. The verifier can connect these actions to a specific cryptographic function to check if the information is valid.
ZK proofs can be used for cryptographic verification of real-world credentials such as driver's license, membership, college degrees, and national ID card. The technology will also enable passwordless login, reusable credentials, and composable verification methods on websites and apps.
Decentralized Identity Use Cases in Blockchain
Polygon ID, created by the same team as the Polygon network and token, is a decentralized identity infrastructure stack that provides developers with the tools to build decentralized and private identity solutions. Polygon ID uses ZK proof technology.
With Polygon ID, developers can create "private by default" apps that don't collect, store, or manage user data. This will not only result in the elimination of customer data management and compliance for businesses, but will also give individuals control over their private data.
Polygon ID provides the following tools for developers:
- Wallet Software Development Kit (SDK) - Tools that enable developers to create digital ID wallets and wallet identity solutions.
- Issuer Node – An application that allows users to issue and manage digital IDs.
- Verifier SDK - A set of tools that allows applications to verify user information based on digital IDs.
- Java Script SDK - allows developers to create applications, browser extensions and sender nodes. Existing applications can also use this SDK.
Decentralized social media
Decentralized social media apps are censorship-resistant social platforms that are not owned, operated, and managed by a centralized entity.
There are several blockchain-powered decentralized social platforms including Decentralized Social (social media), Status (messaging), Mirror (publishing platform) and Lens Protocol (social media) allowing users to exchange information, publish and distribute content to the public. As these platforms run on public blockchains, they offer users a decentralized underlying layer that is (almost) immutable and censorship-resistant. Some bDecentralized blockchain-based social platforms like DeSo have native crypto tokens that allow users to monetize their digital activity.
Lens Protocol is an example of a decentralized identity social network. It aims to solve the "portability" problem faced by users on Web 2.0 platforms like Twitter and Instagram. Portable accounts on Lens allow users to seamlessly transfer their content and followers between different platforms built on the Lens protocol. There are many Lens protocol-based apps in various categories including social media, games, music, live streaming, and more.
Is decentralized identity the future?
Decentralized identity could be the future and it would probably be better in the interest of internet users. Unfortunately, personal data is so incredibly valuable to businesses that it will be an uphill battle for technology.
If decentralized identities are successful, they will not only allow us to avoid the data privacy issues plaguing the Web2 space, but will also create a higher standard for data protection, privacy, and user empowerment. Decentralized identity solutions such as ZK-proof technology have the potential to have global impact and disrupt industries ranging from finance to retail.