There are many platforms working to transform the current identity management systems from centralized and insecure to decentralized and more secure systems. Among them is Microsoft, which is leveraging the bitcoin network to enable users to regain control of their personal credentials.
Before we delve into Microsoft’s decentralized identification system, let’s have a clear understanding of a decentralized ID.
What is a decentralized identity system?
Unlike traditional ID systems that are controlled by centralized authorities, decentralized identities put the responsibility and control of personal information back into the hands of the individual. It is up to everyone to decide what portion of their personal credentials they’d like to share when to share, and with whom to share such information for whatever they deem necessary.
Enter Microsoft’s decentralized identification system.
Microsoft’s decentralized Id system known as ION is an open-source - layer 2 solution built on top of the bitcoin blockchain. It is completely free from censorship (even from Microsoft itself), and anyone can review and contribute to the network.
For those hearing this for the first time, ION (Identity Overlay Network) is basically the name of the technology given to Microsoft’s decentralized ID system just like the bitcoin’s layer 2 scaling solution is called the Lightning Network.
ION consists of decentralized identifiers or DIDs, which enable users to create decentralized credentials like college certificates, individual licenses, or basically any digital document that can be used to identify the person online. Think of a DID as a globally unique identifier that does not need the permission of any central authority for registration since they operate on distributed ledgers or other forms of decentralized technology.
With the help of ION, users would be able to use their decentralized credentials to login to websites and other applications that support them. So instead of using third-party websites like Facebook or Google (which would normally keep track of your online activities), individuals can take advantage of their decentralized identities to sign up for any service/offer on the web; thus preventing unauthorized use of their private info.
Decentralized Identity management systems also make use of digital wallets, but not to store your regular bitcoins or other cryptocurrencies. This time around your digital wallet is used to store all digital aspects of your decentralized ID that can only be used when you grant access to it.
Why do we need decentralized IDs?
We all saw it in 2018 how Facebook misused over 87 million user profiles, giving away their personal information. Even before that, Equifax in the previous year had breached the privacy of over 147 million people and lots of personal information was exposed (social security numbers, driver’s licenses, credit card numbers, home addresses, etc). These are just two of the many instances that prove how vulnerable and insecure centralized identity management systems are. So why do we need a decentralized infrastructure? Below are some of the reasons.
1.. You can easily regain your ID when you lose the original copy.
People Misplace original copies of their ID every day and getting another one from a centralized entity is usually time-consuming as people have to start from scratch to provide all the requirements needed to obtain another copy of their ID. Not only that, but people might also incur additional financial charges. This is even more frustrating to poor and homeless people living far away from government offices or from places where such centralized services are provided.
With a decentralized identity management system though, individuals can easily be issued duplicate ID proofs thanks to the temper proof nature of the blockchain and other decentralized technologies.
2.. A secure and trusted place to manage our IoT (Internet of Things) devices.
We are living in a time when IoT devices (eg fitness trackers, smart appliances, etc) are increasingly becoming a part of our daily lives. And because some of these devices store sensitive data, there’s every reason to need a decentralized infrastructure for their secured management as it gives users the power to decide when and what type of information to give out.
3.. A decentralized system provides you with a self-sovereign identity.
This is pretty simple and straight forward. You own and control every aspect of your digital life. Even when people do gain access to your personal information, they cannot alter it without your permission.
4.. Avoid being tracked.
People give away personal information to internet service providers to gain access to the internet. Most if not all of these Internet service providers track you and make money off of your personal information by selling it to other parties without your consent. This problem can easily be avoided with a decentralized ID system since unauthorized use of their information is not possible in the first place.
5.. Avoiding third parties when logging into websites.
People sign up for different kinds of services online. And when they do, their passwords, usernames, etc are stored by the custodian. Hackers can and have often succeeded to access this info by exploiting vulnerabilities in the security systems of these online service providers. This can only be avoided if you own and manage your personal information from your (decentralized) wallet.
Closing thoughts.
Even though there are many platforms working on decentralized management systems to provide people with self-sovereign IDs, it is very exciting to see tech giants like Microsoft becoming a part of such initiatives. Not only will this help to accelerate the adoption of decentralized IDs, but also in raising general awareness on blockchain and other decentralized technologies.
You can watch a video presentation of this article on YouTube.
