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Blockchain reinvents Digital Identity
The concept of Digital Identity has become increasingly important in our lives as the boundaries between real life and digital life blurred. As a result, and to the same extent that we digitize our multiple "selves", we become aware of the associated inconveniences of the process.
We all complain about repeating our data every time we register for a service. Or the difficulty of managing multiple identities simultaneously and in isolation. We are also aware of the need to take control of the personal data we provide about ourselves, the risk of data breaches this poses, or giving away more data than necessary.
Digital Identity and Blockchain
We have repeatedly heard that Blockchain is the ideal technology to reinvent digital identity as we know it. It can also solve or minimize the difficulties mentioned. By means of a decentralized and immutable registration mechanism, such as Blockchain, it would be much simpler to authenticate and verify what we know as digital identity while also preserving the user's privacy.
Using Blockchain it would be much simpler to authenticate and verify digital identity, while also preserving the user's privacy.
In addition, to solve the famous problem of repeating the same data in all registration processes and not knowing where or to whom we are giving it, with this technology, as everything is always shared, it would be possible to reuse the same data from an identity and provide traceability and transparency every time a user shares part or all of their data with an entity. However, this always starts with the requirement that companies that want to use our data are on the same Blockchain network.
Sovereign digital identity, or recentralization vs. decentralization
Based on these premises, many companies have bet on reinventing digital identity with Blockchain technology. There are currently several solutions available on the market, both proprietary and open-source solutions, such as uPort or Sovrin. All of them create a completely decentralized ecosystem where the concept of Sovereign Digital Identity is implemented.
However, each solution is specific to a platform. In other words, we are once again creating multiple, isolated digital identity applications that cannot interoperate despite being decentralized.
From a technological point of view, this fragmentation is also reflected when developing applications based on Blockchain technology. Every time we want to work with these networks, whether they are public like Bitcoin or Ethereum or private like those based on Hyperledger Fabric, we have to create a specific identity to operate on them.
It is increasingly necessary to create interoperability mechanisms that allow us to create a single digital identity. This identity, while being decentralized, can operate with different technologies and applications.
If we also add the need for a multi-platform system that has some authentication mechanism and is easy to monetize, the decentralization trend turns around and becoming the opposite: recentralization.
For this reason, it is increasingly necessary to create interoperability mechanisms that allow us to create a single identity that is truly decentralized (i.e., without a single issuing entity that creates, maintains, validates, and guarantees it) and capable of operating with the different technologies and applications available in the market. In these cases, native decentralization is limited, and we need to decentralize the decentralized and make it interoperable.
What is a (truly) Decentralized Identity?
Just as in the original Blockchain networks, trust is placed in the network as a whole, composed of its members, and not in any specific relationship between them. The same should be true for identity. For example, let's consider a bond issuance on a Blockchain network that involves three banks.
Why do we have to create a user account on that specific network created for that purpose to operate? If we join the network, what meaning does the identity created for us by the administrators (the three banks collectively) have for operating on that network? Why couldn't we operate with those bonds without having to participate in the network?
What would be desirable is for each network to be able to offer me its services without knowing me. Or, in other words, to present myself to that network anonymously but with credentials that allow me to identify and verify my identity on any occasion.
An example of providing a service to "verified" strangers
It is somewhat similar to what telecommunications networks do when one of our subscribers visits another country and connects to a different mobile network while roaming. The visitor (roamer) is unknown to the visited network, which does not know who the owner of that mobile line is.
But instead of giving them a new identity, it uses the identity verified by their home network and provides them with service, even though it does not know who they are or what their data is (name, surname, or account number to bill them).
In this way, it would be possible to offer our customers digital identities that are not dependent on a single platform, service, or issuer, but on several. And also provide them with a much simpler and easier-to-manage user experience. Likewise, it would be possible to ensure that identity is not tied to a single decentralized access point or a single specific set of organizations or entities.
Identity in Blockchain networks
For all these reasons, interoperability between Blockchain networks, understood as the ability to operate with the same identity on various networks, is a necessary mechanism for the creation of a true decentralized identity.
However, it is not enough for an identity issued on one network by one organization to be accepted by another entity on another network. True interoperability will exist when unknown networks trust each other when verifying a user's credentials and allow them to operate without any prior agreement, integration, or interconnection between them.
True interoperability will exist when unknown networks trust each other when verifying a user's credentials
Thanks to these relationships of trust, which we could call implicit, we would significantly streamline the processes of provision and onboarding in business processes.
For example, we could create a Blockchain network to manage the supply chain without provisioning or registering suppliers in it. These would begin to operate without registering, but by sending transactions signed with their identity previously validated or issued in other sectoral, geographical, or functional networks.
Requirements could also be imposed for operation based on their solvency through credentials issued in a network where such attributes are managed. Or if they have a legal entity with a tax address in a specific region, accepting digital certificates issued for legal entities by the administration.
At Telefónica Tech, we have experience developing this type of solution in the TrustID project, released as open source through a project in Hyperledger Labs.
Featured photo: Vadim Bogulov / Unsplash
