What is decentralized identity in blockchain?

Self-sovereign id is an idea that refers to using distributed databases to handle PII.

The notion of self-sovereign id (SSI) is core to the thought of decentralized id. As an alternative of getting a set of identities throughout a number of platforms or a single id managed by a 3rd celebration, SII customers have digital wallets through which numerous credentials are saved and accessible via dependable purposes.

Consultants distinguish three primary elements generally known as the three pillars of SSI: blockchain, verifiable credentials (VCs) and decentralized identifiers (DIDs).

Blockchain is a decentralized digital database, a ledger of transactions duplicated and distributed amongst community computer systems that document data in a means that makes it troublesome or unimaginable to vary, hack or cheat.

Second, there are VCs known as tamper-proof cryptographically-secured and verified credentials that implement SSI and shield customers’ knowledge. They’ll characterize data present in paper credentials, corresponding to a passport or license and digital credentials with no bodily equal, corresponding to, as an illustration, possession of a checking account.

And final however not least, SSI consists of DIDs, a brand new kind of identifier that permits customers to have a cryptographically verifiable, decentralized digital id. A DID refers to any topic like an individual, group, knowledge mannequin, summary entity, et cetera, as decided by the controller of the DID. They’re created by the person, owned by the person and unbiased of any group. Designed to be decoupled from centralized registries, id suppliers and certificates authorities, DIDs allow customers to show management over their digital id with out requiring permission from any third celebration.

Alongside SII, which is rooted in blockchain, DIDs and VCs, decentralized id structure additionally embraces 4 extra components. They’re a holder who creates a DID and receives the verifiable credential, an issuer that indicators a verifiable credential with their non-public key and points it to the holder, and a verifier that checks the credentials and might learn the issuer’s public DID on the blockchain. Furthermore, a decentralized id structure encompasses particular decentralized id wallets that gas the entire system.

How decentralized id works

The idea for decentralized id administration is using decentralized encrypted blockchain-based wallets.

In a decentralized id framework, customers make the most of decentralized id wallets — particular apps that enable them to create their decentralized identifiers, retailer their PII and handle their VCs —as an alternative of protecting id data on quite a few web sites managed by intermediaries.

Apart from distributed structure, these decentralized identity wallets are encrypted. Passwords to entry them are changed by non-phishable cryptographic keys that don’t characterize a single weak spot within the case of a breach. A decentralized pockets generates a pair of cryptographic keys: private and non-private. The general public key distinguishes a concrete pockets, whereas the non-public one, which is saved within the pockets, is required through the authentication course of.

Whereas decentralized id wallets transparently authenticate customers, in addition they shield customers’ communications and knowledge. Decentralized apps (DApps) retailer PII, verified id particulars and the knowledge wanted to determine belief, show eligibility or simply full a transaction. These wallets assist customers give and revoke entry to id data from a single supply, making it sooner and simpler.

On high of that, this data within the pockets is signed by a number of trusted events to show its accuracy. For instance, digital identities can get approval from issuers corresponding to universities, employers, or authorities constructions. Utilizing a decentralized id pockets, customers can current proof of their id to any third celebration.