What is a Decentralized ID

decentralized_id

As you may guess, the Decentralized Identity also known as Blockchain Identity or Decentralized ID is linked to WEB 3’s evolution and the belief that one should dispose of their own personal data on the Internet.

Crypto and Blockchain technology opened the door to an incredible new world where users can set their IDs via privately-owned domain names (WEB 3 domains), crypto-wallets, and various non-fungible tokens (NFTs) on a blockchain environment, surpassing any regulation, censorship, or interference from the biggest players like the Internet regulator ICANN or corporations like Meta (Facebook and Instagram).

The Decentralized ID is a step in the same direction.

Dislike what we all have to do when setting up an account for a social media channel, the online bank office, a new email address, etc., etc, the Decentralized ID will help us redirect to the desired channel without setting new credentials. One ID to link all potential logins and credentials.

Instead of inventing different and more complicated passwords for each website that requires them, our wallet will keep the key to our Identity to present ourselves whenever needed without linking additional data.

The fact that the Decentralized ID is entirely under the ownership and the control of its user, will prevent controlled and uncontrolled data breaches of transfers of web identities made by private corporations, state bodies, or criminal parties.

So, How does the Decentralized ID work?

As mentioned above, the Decentralized Identity helps the user to present a single key, held in the ID wallet for all platforms they want to access.

These platforms are created in a blockchain environment. They can be anything from ID card, driving license, employment card, passport, library card, social media, anything that requires online account and verification and is on the blockchain.

  1. The user will get credentials from the issuer in return of an ID presented online. These credentials will then be stored to the user’s digital wallet.
  2. All this is possible on the blockchain ledger where instead of an authority holding all their users’ data, there is an environment where two parties can present and verify their IDs directly.
  3. When a Company needs to verify a customer’s proof for ID, they check if the digital wallet contains the correct key – online ID. No need for the user to present or send hard copy documents to prove their identity. The proof is already there, in the user’s digital wallet.

The above accelerates the process of verifying individual ID credentials, without the exposure and personal data transmission. This allows faster transactions, ease of credentials proof and ID confirmation.

The service providers

By focusing on users’ benefits, we may forget that the Companies and the other service providers are also taking advantage of this decentralized, more democratic environment:

  • – Service providers will hold less user data which will decrease significantly the threat of security risk linked to data breaches and data leaks.
  • – Less data means limited cyber-attacks interest.
  • – The service providers will target the right audience and the marketing budget will be better optimized.

The users

But how can the digital wallet guarantee the safeguard of its user’s identity?

The wallet keeps users’ biometrics, previously required informed consent among other identificaors by using encryption in a decentralized storage environment, the blockchain, which is initially designed to be impenetrable. The encryption allows to conceal the metadata and therefore prevent hacking.

Among the benefits for the users are:

  • – No more usernames and passwords. One ID to enter all the accounts.
  • – Decreased risk of passwords and data leak.
  • – Important documents like travel visa, driving license, university diploma, entry permit, and other credentials, all kept in the wallet without the need to present them physically or scanning and then sending online.
  • – Done with the unwanted advertising and social targeting. Since the users decide whom to approach and what data to present and since users are the keeper of their digital ID, fewer third parties will be allowed to contact the customers.
  • – Data and digital ID kept with the owner and not with the authorities.

Conclusion

The Decentralized ID is in the basis of establishing a new level of trust between Companies and Service Providers on one side, and the customers and users, on the other. Among the players to enter the decentralized universe are also the government bodies.

A new environment to benefit us all where undesirable targeting and data breaches will be way more difficult.

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