Decentralized identity technology aims to do much better, making users and their devices the sole authoritative sources of personal data by using digital identity wallets. These would function as if they were payment wallets, where a user could dole out as much personal data on request as they see fit to share in even more privacy-enhanced ways. Trusted issuers would lodge the data in the form of tamper-resistant verifiable credentials (VCs), and verifiers would have ways of retrieving and checking the sources of these VCs. Distributed ledgers serve to underpin issuer networks.
Admittedly, the blockchain does have loopholes that can be illegally misused, but it also provides the ingredients needed for mending this issue. In the right hands, the use of blockchain innovations, such as:
- Decentralized Identifiers (DIDs)
- Self Sovereign Identities (SSI)
- Verifiable Credentials (VCs)
- and Tokenization
will help to acquire the needed permissionless trust in the form of Trust Network.
Verifiable Credentials heavily utilize Decentralized Identifiers to identify people, organizations, and things and to achieve a number of security and privacy-protecting guarantees. They are issued and cryptographically signed documents, intended to be understood by computers rather than people.
A user identifier that is:
- In digital form
- Able of communication with decentralized ledger
- A property of its owner that is stored in a wallet
- Contains the DID data string that pairs the user’s public address with a user’s public key stored on a blockchain
- Representing user ID, diploma, and many others
DIDs enable you to reference subjects in a decentralized way. DIDs can be resolved to DID documents. DID documents allow the controller to prove they are/own the subject. A blockchain-based company generates these documents for all its accounts, which have done at least one TX. These accounts are created by publishing a certificate, which is related to a DID, thus making a connection between the DID and real-world identity. DIDs can be part of Verifiable credentials (VC), which can be used for multiple cases all around the world.