In a digital age where the population is increasingly aware of the importance of privacy and data security, decentralized identity emerges as a transformative solution that allows individuals to control their digital identity.
This article delves into the fundamentals of decentralized identity.
What it is
It is an identity system or model in which users have full control over their identity, who can access it and to what extent.
Unlike centralized systems, in which a single entity controls and verifies identities, decentralized identity leverages blockchain technology to distribute and protect personal information across a network of nodes.
It has three main components
Blockchain Technology: At the core of decentralized identity is the use of blockchain which ensures that identity data is secure, inviolable and accessible only through cryptographic keys.
Self-sufficient identity: This is a fundamental concept in decentralized identity. It allows individuals to own, control and share their identity elements without relying on a central authority. Users own their credentials and decide when and with whom to share them.
These credentials can represent information found on paper credentials, such as a passport or license, and digital credentials with no physical equivalent, such as bank account ownership.
Decentralized identifiers (DIDs): DIDs are a new form of identifier, created, owned and controlled by the subject of the identifier (the individual). They are linked to cryptographic keys stored on the blockchain, ensuring secure and verifiable identification.
Designed to decouple from centralized registries, identity providers and certificate authorities, DIDs allow users to demonstrate control over their digital identity without the need for third-party permission.
How it works
To have your own decentralized identity you must create your decentralized identifier (DID).
The most common way to create your DID is by creating a digital cryptocurrency wallet. The most common of these is Metamask. Here is a guide on how to create yourself a Metamask wallet.
Another way is by using a platform that offers these services. The main platforms are uPort, Sovrin, Microsoft ION, Hyperledger Indy and Blockstack.
Next, regardless of the method you choose, you have to generate the decentralized identifier. Follow the registration or onboarding process, which involves generating cryptographic keys associated with your identifier.
Securely store your private key in a hardware wallet or secure device. You can also write it down on paper and store it in various places in your home. You must understand that your private key is crucial for authentication and must be kept confidential to maintain control over your decentralized identity.
Once this process is done you can enjoy your decentralized identity. You can now interact with various services, websites or applications that support decentralized identity and you will have the option to selectively share information without compromising your overall identity.
Use cases
1. Financial services:
Decentralized identity can transform the way people interact with financial services. It enables secure and efficient Know Your Customer (KYC) processes without compromising user privacy. Which is quite a revolution.
2. Healthcare:
In healthcare, decentralized identity ensures the secure exchange of patient information between healthcare providers, while putting patients in control of who accesses their data.
3. Education:
Decentralized identity simplifies verification of educational credentials. Individuals can share their verified educational achievements without relying on centralized institutions.
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