There’s no doubt that digital technology has made incredible advancements in recent years. Advanced devices, platforms, and systems have allowed for previously inconceivable possibilities.
However, as the digital realm progresses, a vexing dilemma emerges: how can businesses manage identities and how can users verify themselves across a myriad of virtual assets?
To solve this issue, one must establish a representation of a person or device within any given digital system. While the representation may vary based on requirements and circumstances, identities must be legitimate and private.
Because of this, the concept of distributed identity is gaining popularity. This strategy, which is commonly based on a zero-trust security model, combines distributed digital technologies, usually via a private blockchain. This method prevents valuable data from being kept in a central repository and acts as an immutable verification mechanism.
Web3 is built on the idea that people can own their online identities and only share their personal information if and when they choose to.
Let’s look at a real-world example of how this works. A government agency could attest to a user's age and place of birth using this approach, but it couldn't know anything more about the person's digital identity, such as the actual birthdate unless the user agreed to provide more information.
The notion of a digital ID is similar to that of a physical ID at its basic level. Both require a digital device or system to verify users.
Identity management, storage, and security are becoming increasingly complicated. Today's average person has hundreds of accounts and passwords. Organizations must safeguard this identification data while also ensuring that users can conveniently access their accounts. Unsurprisingly, this creates security issues. This is partially because end users are responsible to act in ways that do not compromise their login credentials.
This problem is addressed with decentralized ID, self-sovereign identity, and Web3. An individual utilizes a digital wallet to keep credentials and authenticate with preferred entities, instead of managing several IDs across various platforms or trusting everything to a third-party source. This enhances security by allowing consumers more control over their identity and authentication methods.
Blockchain technology can establish decentralized ID to give individuals authority over their personal information. It supports identity protection by providing an immutable and secure private ledger. This way, it is feasible to lock down data by storing an identity in a digital wallet rather than on a central server.
Decentralized identification has several advantages. The architecture eliminates third parties through sovereign identification. Also, it provides greater security and a simpler user experience.
Decentralized identity is gaining popularity. Many companies have begun to integrate this technology into numerous systems over the last few years. Furthermore, organizations like the Decentralized ID Foundation and the World Wide Web Consortium have supported and developed new decentralized identity technologies.
As Decentralized ID evolves, acceptance is increasing. According to a Gartner analysis, 35 percent of business permissioned blockchain applications will interface with decentralized apps by 2023.
The goal of Decentralized ID and Web3 is to create one source of truth in which the user is the authenticator. These technologies will provide the user-friendliness and security that are needed in today’s digital world.
Robert MacDonald is the Vice President of Product Marketing at 1Kosmos.