Software development

Decentralized Identity

By March 3, 2022 No Comments

Traditional financial systems make it very hard to shape — or even access — one’s own credit history. The portability and accessibility of decentralized identities, on the other hand, could allow us to significantly disrupt how our reputations are used within our current financial systems. For example, on-chain reputations could enable an internet-native credit score that would unlock a variety of financial use cases, including issuing loans, performing tenant checks, or establishing credit. At the moment, blockchain technologies are often opaque to the average consumer, largely configured for financial transactions. To make decentralized identity useful and widespread, it is important to introduce on-ramps for people to record their experiences and affinities on the blockchain, such as their educational accomplishments, professional achievements, or fanships. But in order to mainstream decentralized identity, we must first establish systems that map people’s relevant off-chain experiences and affiliations on-chain.

We’re still in the early days of blockchain, but through communities like Hyperledger Fabric, hosted by The Linux Foundation, we’re seeing how its applicability can be endless. From currency to identity and further afield, blockchain is moving quickly beyond the buzzword stage and becoming critical to the evolution of services in the digital age. There is a lot of blockchain hype to be sure, but for identity blockchain is going to be really helpful.

Why do you need a blockchain for digital identity

Here especially, however, there needs to be strong consideration of how users might be able to add context and curate their permanent public histories to avoid undue prejudice. It would be important to circumvent the digital equivalent of getting evicted, hindering your ability to obtain future housing. Despite these challenges, we believe on-chain reputation will unlock a wide array of use cases. Some of these uses are explored below, but many are beyond our ability to imagine yet. By moving identities on-chain, we could upend archaic financial processes and provide equitable access to capital, re-architect how talent is matched with projects, and provide entirely new paradigms for recognizing and compensating labor online.

Emerging Architectures For Modern Data Infrastructure

The scheme allows for easier national identification of German citizens for public and private needs. During credential verification, the user might also get a one-time password to authenticate the process. Service providers, like banks, will only see encrypted codes rather than personally identifiable information or PII. SSI works in a simple way where an issuer will issue digitally signed documents for you. The issuer will also establish document trust through a blockchain network. You’ll receive your documents in a digital wallet, mostly a blockchain-based app.

Derived on-chain reputations will bring about massive opportunities for business and society. But as we traverse this new territory, we will be forced to consider the implications of permanence. Inevitably, we’ll need to find a balance between what is ephemeral and what should be forever.

Document issuer will create DIDs in a censorship-resistant blockchain environment. There will be an encrypted link of the DID to a signed document by an authority. Imagine a version of Behance in which a designer’s portfolio is populated based on automatically tracked and verified projects, thus enabling direct, blockchain-mediated recruitment. In the realm of talent sourcing, decentralized identities promise “open CVs” based on fine-grained records of professional activities and accomplishments. This could allow for a fuller picture of someone’s past work and provide more granular insight into their skills and contributions. Moreover, on-chain systems are easily portable across borders and applications, unlike current credit scoring systems.

Legal Entity Identifier verification allows for auditing of offshore or cross-country financial services. Governments around the world enforce patient medical record privacy as a mandatory compliance practice for the health care industry. Lumedic Exchange is the pilot project that ensures patient data privacy by transmitting health care records through SSI-based authentication between hospitals, insurers, and drugstores. Additionally, there’s a whole class of applications based around the use of reputation to incentivize new forms of creation or contribution. Currently, it is difficult to decipher who is a subject-matter expert and to recognize and reward them.

If decentralized identity is the future of the web, then the contributions that you accumulate in your crypto wallet — the articles you write, the content you curate, or the things you buy — will become very important. They’ll become the carrier signals of who you are online and the basis for your reputation. SecureKey changed consumer single-sign-on for the better when we introduced the concept of triple-blind authentication with SecureKey Concierge.

Identity Management

A digital identity solution aims to address the problems of privacy, access rights control to personal data and records, and the means of storage for important identifying information. Since identity information is very confidential, it must be properly secured, and the user must be enabled to use this data in a self-determined way. NDIP assigns prospective borrowers a digital wallet to access funds, and each transaction is recorded using DLT to provide a means of verifying identity and of ultimately building a credit history. For the sake of logistical simplicity (and because different facets of a person’s identity naturally overlap and interact), it makes sense to store one’s relevant activities and contributions in a single wallet. But any given person isn’t solely a creator, builder, investor, or collector; they’re many things at once.

Why do you need a blockchain for digital identity

Identity has never been easy, but it’s particularly tricky in the digital age. For too long we’ve been forced to use outdated processes to prove who we are when we’re trying to get things done. After gaining substantial experience in technology, finance, and business processes in his previous job in an IT consulting company, he adopted writing as a full-time profession 3 years ago. While not writing about productivity and the latest tech news, he loves to play Splinter Cell and binge-watch Netflix/ Prime Video. SSI can improve employee identification systems for access to company resources in a cost-effective way. Such a digital identification system also facilitates unrestricted movements during emergencies.

Processing Reputation Data

For example, Bonifii’s MemberPass® is an SSI-based identity authentication system that resolves many problems related to Credit Union services in the USA. Blockchain is the fundamental technology behind SSI, like the Ethereum blockchain. Blockchain participates as a trusted source for DID publications or revocation registry transactions. In addition, crypto wallets offer little protection against data being lost or compromised. Before crypto can serve as a mainstream repository for identity and reputation, it will need to provide the sorts of security protections we are used to from other services.

Why do you need a blockchain for digital identity

Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by a16z. While taken from sources believed to be reliable, a16z has not independently verified such information and makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. A system built around permanence also presents challenges around escaping past versions of one’s identity, as is evident in credit scores and other long-run reputation mechanisms today. The site consists information on business trends, big data use cases, big data news to help you learn what Big Data is and how it can benefit organizations of all size.

Health Care Data Privacy

SSI technology will benefit both the service provider and the beneficiaries. Access systems based on SSI will become transparent, easily auditable, free from human error, and more secure. EIP-780 Ethereum Claims Registry allows for creating, getting, and deleting identity issuing claims. Any authorized government agency or public service provider issues claims to its beneficiaries through a bytes32 type key.

Ceramic helps applications keep track of high volumes of mutable data and encode relevant information on-chain, allowing viewers to compare people’s contributions to distinct projects at a high level. When running SSI on an Ethereum blockchain, the ERC-1484 protocol aggregates DID data. SSI democratizes online identity sharing by enabling you to decide what kind of data and at which level you want to share with the web pages or apps. For example, you may want a prospective employer to have access to information about your educational qualifications and previous work history, but not see that you are the president of the One Direction fan club. Currently, this information is kept separate by virtue of the fact that different third parties hold such information.9 However, it also means that the individual has little to no control over when and to whom the information is shared. Startupy, for instance, incentivizes experts to contribute startup knowledge and gain an internet-wide reputation in specific domains.

  • The simple idea was that using a single credential could actually increase privacy, because none of the transaction participants got a complete picture of the user’s transaction.
  • For too long we’ve been forced to use outdated processes to prove who we are when we’re trying to get things done.
  • For the sake of logistical simplicity (and because different facets of a person’s identity naturally overlap and interact), it makes sense to store one’s relevant activities and contributions in a single wallet.
  • Thus, we need some way to take parts of their decentralized identity and showcase them in different digital spaces to distinct audiences.
  • When an eligible person approaches the service point to use a social or public service, the service provider can effortlessly authenticate the beneficiary from the DID exchange.
  • Despite these challenges, we believe on-chain reputation will unlock a wide array of use cases.

With decentralized identities that track contributions across the internet, we will be better able to gauge how early someone was to a topic or trend and how much value someone is contributing to a subject matter. More broadly, it is essential to expand access to sources of on-chain reputation. If the playing field for building on-chain identity isn’t leveled, this new source of reputation will accrue primarily to the already privileged, exacerbating existing social and socioeconomic divides. From there, we can start to explore the many use cases enabled by factoring on-chain reputation into offline activities based on the openly queryable nature of decentralized identities.

The combination of an extensive government infrastructure for identifying identities with a digital identity platform designed for security, privacy and scalability is a great value for both citizens and private sector enterprises. In addition, it provides citizens with greater security, privacy and control over their personal data. Blockchain identity solutions is the best-known technology to ensure the security of personal data.

Chain Of Authority

The simple idea was that using a single credential could actually increase privacy, because none of the transaction participants got a complete picture of the user’s transaction. The bank does not see your online destination, the government does not see which bank you used or your account details and SecureKey does not know who you are. The challenge for us when we moved beyond accessing services to registering for new ones was how to implement the triple-blind model for identity information. SSI technology can increase the processing speed of the financial services sector.

What Can I Do To Prevent This In The Future?

The site is dedicated to providing the latest news on Big Data, Big Data Analytics, Business intelligence, Data Warehousing, NoSql, Hadoop, Mapreduce, Hadoop Hive, HBase etc. ERC Lightweight Identity designates the smart contract Ethereum DID registry. However, it also works as a common resource for every user in the blockchain network.

Sierra Leones National Digital Identity Platform

Then we must build mechanisms to standardize, process, and prioritize the influx of data that will be added on-chain. On the way, we’ll need to solve endemic challenges to decentralized identity, including the lack of context around on-chain records and issues around gaining access to the decentralized web. In contrast to most web2 profiles, decentralized identity is not ephemeral. This means that an NFT of a diploma in your crypto wallet, for instance, would turn into a permanent academic certification. Likewise, each piece of content you post online would be permanently linked to you .

Information relating to internet transactions is arranged in the form of consecutive data blocks. One block contains information about a certain number of transactions, then after it is saturated, another block of data is created, etc. Its most important advantages Blockchain Identity Management are that it is safe, anonymous and non-modifiable backwards. Many experts predict that blockchain-based solutions can significantly affect not only the world of technology, but also play a huge role in the economy and contribute to the development of the economy.

Thus, we need some way to take parts of their decentralized identity and showcase them in different digital spaces to distinct audiences. Imagine a design in which the wallet’s overall content was kept private, but accessing a specific facet of a person’s reputation required a specific access key. While it might sound far-fetched today, a real opportunity here is in leveraging on-chain reputation for off-chain uses. In the creator economy, for instance, we might see a web3 version of YouTube where the videos don’t belong to the platform, but to the creator. So the creator could bring their videos with them to any online space and reap any value tied to those assets. Likewise, on-chain data could be used to gauge engagement or interest in specific creators or brands.

Web3 is based on the premise that each internet user will have a unique internet identifier, like an email address, that can be natively linked to any piece of software and stored on a blockchain. As part of someone’s “decentralized identity,” a portion of a person’s online activity would then be “on chain,” meaning that it would be public and easily searchable via their individual crypto wallet. DLT and cryptocurrency were originally introduced to address the “double-spend problem” inherent in virtual or digital currencies. However, DLT platforms have emerged as an alternative mechanism for storing and transmitting all types of data, by giving users access to a decentralized, synchronized record of transactions. DLT platforms are constructed as networks of computer nodes in such a manner that, once a transaction is verified by the network nodes, it is combined with other transactions to create a new block of data for the ledger.

For example, a digital driving license that allows you to drive cars is one example of a verifiable credential. Jad Esber is cofounder of the web3 company Koodos and is an affiliate at the Berkman Klein Center for Internet & Society at Harvard. This is the second installment of a two-part series on reputation systems in web3.

Violet aims to authenticate off-chain, personally identifiable information on-chain. Organizations, groups, humans, machines, and bots will use unique, recognizable proxy profiles in any SSI system. ERC-725 will define the standard protocol for such proxy accounts or profiles. EIP-1078 protocol of an Ethereum blockchain enables password-free sign-ins for the SSI ecosystem.

As the technology relies on blockchain, your identity is virtually unhackable. SSI will function as a tamper-free digital identity based on blockchain technology. When you use SSI to log in for any services, you’ll control the data related to your identity and not the service provider. Online service providers will also experience increased system efficiency and business opportunities by giving you more control over your data. For a public scheme and social services SSI ecosystem, a government agency will create digitally verifiable identity profiles or DIDs for the beneficiaries. Such DIDs will save beneficiary information like name, SSN, date of birth, age, etc.

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