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Decentralized Identity (DID): All you need to know


Traditionally, identification of individuals has been done through a centralized system. Hospitals, schools, banks etc. have developed systems to help them uniquely identify and keep records of persons within their respective jurisdictions. Blockchain technology has enabled for a new form of identification. A decentralized identity (DID) is a set of characteristics that uniquely defines objects. Unlike conventional methods that delegate generation and management of these unique identities to a single entity, an individual’s DID remains under their control. Decentralized identity management (DIDM) is built on common trust among members on the platform. Trust is derived directly from the individual rather than through a single entity, as is the current practice with other models of identification.

Advantages of Decentralized Identifiers

Security of participants and assets on the blockchain ecosystem has remained a key pillar towards the adoption and success of the technology. DIDM uses private keys to secure each record cryptographically. The private keys remain under the control of the individual whose identity it contains. This makes it a very secure form of identification protecting users from the risk of their information being stolen; common in centralized systems that keep records of identities in a single database.

DID has also been developed to operate on different blockchains. This has removed the barrier inherent in conventional methods where an individual is required to use a different identity in order to access services from one platform to another. This simplifies the management of user activities enabling for faster and more efficient transactions across different platforms.

Structure of a Decentralized Identity

DIDs are designed to be flexible and robust in terms of the kind of information it may contain about the owner. Records such as the date it was created, updates and changes made on a document and other identities allowed access to that particular DID among many more can all be included as part of a decentralized identity.

Applications for Decentralized Identifiers

Unlimited DIDs for Different use cases

First, it is important to note that an individual can have more than one DID for different use cases. DIDs are also not limited to people. DIDs are therefore not proof of uniqueness of an individual or object but are simply tools of identification.

Assignment of Unique Identities

They can also be used to assign unique identities to objects, organizations, contracts and much more. A DID provides very little information about its owner. However, various protocols can be built on top of a DID for verification. A DID Auth, for example, is an authentication tool that uses challenge/response protocol to prove ownership and allow forth the use of a particular decentralized identity.

Verifiable Credentials

Verifiable credentials are another means by which we can prove facts about the owner of a DID. A verifiable credential is simply a collection of attributes about the owner of a DID. It is not limited to the type or number of attributes that can be used. An individual can use any of these attributes as a tool to prove ownership of a particular identity.

Online Shopping

An example of an activity whose efficiency would be greatly improved is online shopping. Often, once you have placed a purchase, you are required to provide certain information to facilitate payment and shipping. Since a DID has the capability to contain this information and much more, a buyer may simply provide a decentralized identifier from which the merchant can get the information required. The user has the capability to decide on which pieces of information can be shared with depending on the need. This would make the purchase process faster and more convenient.

Social Interactions & Networking

Social interactions and networking can also be enhanced through DIDs. Individuals can connect with other individuals or objects (e.g. companies, contracts etc.) using their decentralized identities. They can select the kind of information they wish to share for each party creating a lifelong link that cannot be broken by 3rd parties.

Security of Decentralized Identities

Information regarding owners of a DID is encrypted using private keys which remain under the owner’s control. This makes it difficult for unauthorized persons to gain access to personal information on the owner. The DID owner retains control over the DID and decides the kind of information to include and who to share it with.

Decentralized Identifiers (DID) are stored in a permission blockchain. Records on transactions involving a decentralized identity are updated on the blockchain and form part of the DID. The advantage of blockchain here is that it does not allow for changes to be made in the history of a DID. All actions performed on an identity cumulatively contribute to the DID’s current state.

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