Decentralized Identity: Giving Consumers Power Over Their Identities




Boarding a plane? Show your government-issued ID. Getting a mortgage? Show your ID. Getting married? You guessed it — show that ID.

Our identity is deeply personal, a compilation of much more than our physical characteristics. It’s also our histories, personalities, interests, relationships and more. Why is it, then, that virtually everything about our identity is tied up in various government-issued documents and systems? Shouldn’t we, as individuals, have more ownership?

This is a question that a technology called decentralized identity attempts to solve.


    What is decentralized identity?

Decentralized identity aims to give consumers power over their own identity credentials, not by way of paper documents, but with a self-owned digital “wallet.” Think along the lines of your Apple or Android wallet where you store your payment methods.

When someone needs to prove who they are for a loan application, verify their age to enter a bar, enroll in TSA Pre-Check and everything in between, the concept of decentralized identity offers a new way of verification. It wouldn’t involve carrying around and pulling out various licenses, passports or birth certificates. All a consumer would need to do is deploy their wallet with previously verified personally identifiable information (PII) ready to share.


    Recognizing Decentralized Identity’s Value

A system like this may seem like it belongs in a sci-fi movie and not in real life. While a complete changeover to a decentralized identity system isn’t something that can occur overnight, I believe it’s one of the most valuable technology dreams worth working toward.

Why is it worthy of such a bold claim?

Decentralized identity has the potential to offer immense benefits outside of the greater identity autonomy it provides to consumers. Convenience, more access for marginalized communities and unparalleled privacy are just a few.

The idea of bringing identity into the digital realm isn’t new. In fact, it’s estimated that by this year, there will likely be 3.6 billion people globally carrying some sort of government-issued electronic ID. While this is a promising start, the goal of decentralized identity goes beyond digitizing government-issued documents. It almost serves as a larger-scale “single sign-on” by housing PII, licenses to operate vehicles, biometrics, financial data and more. When one piece of data is required by a vendor, citizens can deploy exactly the information that is needed easily and quickly from a single source.

This type of digital-first approach also benefits communities that lack access to in-person services, such as rural areas or underserved neighborhoods. While more than three billion people are expected to have an electronic ID, one billion people worldwide live without official proof of identity at all. Decentralized identity technology could play a vital role in solving this issue of accessibility. Once broader access to the internet and digital resources in these communities is available, decentralized ID could provide access to social services and government assistance, reducing the need for in-person visits.


    Privacy, Please

Of course, all of this is a non-starter without ironclad data security. The sharing and sale of personal consumer data is a $200 billion industry. Everything from email addresses to online purchase histories, aspects of personal identity and much more are currently available for sale, often without consumer knowledge or understanding. Decentralized identity technologies help to mitigate the risk of that data making its way into the wrong hands.

The transactions I listed earlier — signing up for TSA Pre-Check, getting into a bar or applying for a loan — now typically rely on explicitly sharing details with vendors or agencies. Need to prove your age? Your exact birthday is shared. Getting your credit checked? Your social security number is now in the hands of the party that is running your credit score. And with 83% of the average person’s data being held by companies they have only interacted with once, it’s not difficult to imagine how far and wide our data travels.

Decentralized identity empowers consumers to engage in the same activities and transactions without actually sharing data. Instead of sharing your PII, your ID would share proof of the verified PII, giving businesses what they need to make informed decisions about whom they do business with, without forcing consumers to circulate their information around the digital landscape. Your personal data stays securely locked in your wallet.


    The Government’s Role In Decentralized Identity

Decentralized identity isn’t without its ironies. It’s meant to decrease our reliance on the government to provide us with our proof of identity, but national governments still have a major role to play. Rather than being the owners and proprietors of citizens’ information, governments can encourage the creation of markets for decentralized identity so people have a wide variety of identity platforms to choose from.

Similar to the U.K.’s open banking system, effective regulation could create favorable conditions for both public and private agencies to participate in the decentralized identity market, either by offering a secure identity platform that citizens can use or by accepting decentralized identities during transactions.

The European Union recently announced a bold plan for their own version of decentralized identity, a wallet available to citizens that would support drivers licenses, tax filings, opening bank accounts, prescriptions, academic achievements and more, demonstrating that governments can and do have the power to support this technology.

It’s clear we have far to go to make decentralized identity a reality, but the potential value of these efforts can’t be ignored. Decentralized identity increases the standards for how consumers are treated in the economy and creates a more equitable balance of power in transactions, with no single party being forced to give up intimate personal details to participate.


Read the full article at www.forbes.com

Twitter: Tweet the Post

Linkedin: Post on Linkedin





JetCoinz News     Learn     Spend     About     Feedback