We use so many different applications that give several service providers and multiple third parties access to our data, which contains our own digital identities. This often makes it hard for us to govern our data and even revoke access to our digital identities. Being that our digital identities are linked through several apps, services and devices as well, we give full control to services providers over our digital identity data. And this often leads to the use of our personal data fraudulently or data breaches that end up affecting not only our social and financial lives but our professional lives as well.
Storing our personal information such as our names, credit card information, and addresses on several sites can be very risky. We are all aware of the numerous drumbeats of users using weak passwords, phishing schemes that reveal passwords to criminals, theft, fraud, and breaches from companies and businesses that find it hard to comply with regulations that protect customer data. With decentralized digital data all these will eventually be curbed.
This is because users will be able to create and manage their own digital identities without any use of third parties or service providers. Decentralized identities operate based on trust for identity management.
The key characteristics of Blockchain technology that make it appealing for the decentralized digital identity landscape are:
· Data Integrity: The stored data in Blockchain is immutable and permanent, therefore any deletions or modifications by third parties are not possible. The decentralized identity systems utilize this mechanism to mitigate any breaches or theft of users’ identity information.
· Trustworthy: Blockchain technology utilizes a consensus approach to ensure data is authenticated via several acts and nodes as the source of trust to verify user identity. Along with the data, each highly encrypted block has a hash that will change indicating that someone is or has tempered with the stored data.
· Security: Another crucial factor when it comes to storing decentralized data is maximum security. Blockchain is designed to protect data through a highly encrypted feature. Blockchain also considers the consensus algorithms, digital signatures, and cryptographic hash functions to protect user identities.
· Simplicity: Identity issuers leverage the flawless process of creating digital identities. They can efficiently integrate new users and verify the information. Identity owners can also easily store and control their identities within their identity wallet
· Privacy: Blockchain comes with a pseudo-anonymous identifier (decentralized identifier), which can help mitigate the privacy concerns among the identity owners.
So how does the decentralized identity system work with Blockchain?
The layout of decentralized identity with the incorporation of Blockchain typically consists of the following elements:
· Identity Owner: The user who creates their decentralized identity.
· Issuer/Verifier: issues and verifies identity information by signing the transaction using their private key.
· Identity Wallet: An application that enables users to generate their decentralized identity and control access to service providers.
· Service Providers: Applications that accept the authentication using the decentralized identity and access Blockchain to look for the decentralized identifier (DID) that the user shared.
· Blockchain/Distributed Ledger: A decentralized and distributed ledger that provides the mechanism and features for DIDs and functioning.
· DID (Decentralized Identifier): A unique identifier that contains details such as the verification information, public key, and service endpoints.
Through the identity wallets, the user creates their own identity which afterward cryptographic keys are generated. These are the public keys and the private keys. The identity wallet then hands over a registered payload containing the public key to Blockchain, which in turn generates a distinctive identifier against the user’s wallet. The user’s identity wallet retains the private key which will be used in the authentication.
During verification of the respective identity information by issuers such as the universities, government, and financial institutions, the users are required to sign using their private keys.
Decentralized identity with Blockchain can be leveraged to transform the digital identity outlook. Users will be able to authenticate themselves easily without the need to share their personal information that would otherwise be breached. The decentralized identity is much safer for users since it enables service providers and users to have excellent authority over their data and identity, unlike the centralized system which makes the users’ identity susceptible to privacy breaches and cyber-attacks.
