August 15, 2020

Market News

Self-confident identities on blockchains

SSI stands for Self Souvereign Identity. And these have created a new framework for the creation and management of digital images. It is not just about people and their so-called digital twins, but also objects, goods and values, such as crypto assets in the emerging DeFi sector .

The self-confident identities can also be used for analogue interactions and are of great advantage, because they form one of the essential building blocks for the desired digitalization across all levels.

Self-confident identities for digitization

An interoperable economy realistically means for many of us that in the next few years the analogue and digital world will be connected, and identity management will become increasingly important.

Blockchain technology initially made it possible to create digital copies of our own self. The digital twin is a copy of our personal data and characteristics on a digital level. First, it was assumed that it was sufficient to have such a twin on the Internet.

But the technology of blockchain and other distributed ledgers has now taught us that we can have multiple digital images. Dedicated, equipped with different access rights and under the full control of the owner, technologies have been developed for the SSI.

Identity is at the core of every interaction

A secure and clear identity is based on trust between different identities. However, this can vary in strength or weakness and can therefore vary between transactions. It needs a kind of control mechanism that can create and manage identities at the same time. The Hyperledger Indy project of the Linux Foundation is also dedicated to this goal.

Decentralized technologies, to which the blockchain belongs, have a lot of potential. But one of their greatest strengths is certainly the completely self-sufficient process within a network of participants, in this case computers or nodes. Perfect basis for the creation of digital identities on the blockchain .

This means that the authenticity of personal data can be confirmed without a third party, regardless of whether it is analog or digital, whether human or machine. Even more, with blockchain technology, the self-confident identities can be managed at any time by the user, i.e. their owner. This includes blocking participants, deleting authorizations and the “right to be forgotten”.

Whenever we move in an analog or digital space, the way in which we exchange information must be secure, universal and, above all, compliant with data protection regulations. Because all experts agree: The protection of personal data will also be subject to strict data protection regulations in the digital age of the future.

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Decentralized identifiers manage identities

In addition to individuals, entities, i.e. goods, objects or values, can also create and manage their own identifiers in a decentralized manner. These are the technical framework for self-confident identities. No identity provider or service provider comes into play in any way.

Self-confident identities are created from the owner's point of view and do not serve the other entity's need, but only serve their owner. Only he and no one else determines the structure. In the current view, as the owner of our identity, we have to disclose personal data in the way that, for example, a service provider or an authority would like, depending on the application.

These requirements do not apply to self-confident identities, because the structures of the SSI are designed to be user-friendly and not receiver-friendly.

Web of Trust 2.svg
By User: Ogmios – This file was derived from: Web of Trust.svg , CC BY-SA 3.0 , Link

Sovereign identity model through DID

A model in which the sole control lies with the respective owner. The use of this SSI is expressed by one or more decentralized identifiers, the DIDs. Technically speaking, these are essentially a JSON representation of the respective identity. The DID document uses a public key to identify the owner of the identity. The central storage of the DIDs allows control over who can access the respective JSON document.

On a blockchain or any other distributed ledger, DIDs, the decentralized identifiers, have emerged or become possible thanks to standardization by the World Wide Web Consortium W3C. With this method of decentralized identity management, all ledger technologies can adopt and implement the specified format.

In the case of SSI, self-confidently describes the ability to control your own DIDs. They can be used to issue credentials and certificates, which for the first time allow sovereignty over one's own identity in the digital space. This approach is intended to weaken the central role of the state, but also the influence of service providers and third-party providers. It is also intended to make democratic engagement easier for citizens in the future.

Self-confident identities can be actively controlled

Self-confident identities represent an additional layer (layer) on a blockchain basis, which is also referred to as a universal digital identity layer.

Identities are made up of personal identities such as the roles of father, wife or grandmother. In addition, there are identities in the social context, such as employees, class speakers or members of the choral society. These are supplemented by the state-issued identities, such as in the passport or driver's license.

Identities are not static, but actively develop over the course of a person's life. Only the state identities are much more stable, for example in relation to the passport number or the surname.

The clear identification of an individual is the basis for the interaction with our outside world. And with the help of government issued documents, we can interact with other identities.

Identity model
Identity model

However, developments in decentralized structures, artificial intelligence and the emergence of social networks have meant that actions, actions and processes on the Internet are linked to our digital identity and not to our physical identity. The user account, the fingerprint and the speech recognition are well-known examples in this context.

Digital identities in the Internet of Things

The Internet of Things has also brought significant changes to our identity. Autonomous driving is tied to a digital identity, the machine economy with IOTA and its Tangle, for example, also allows the identity of devices and objects and this leads to the emergence of a new interaction layer.

This new layer, universally designed, could set new standards in efficiency and above all trust in the digital space. There are currently so-called data silos, such as from manufacturers or service providers, but also social networks. The data silos are full of identities, excerpts from them, personal data in poor quality, but above all unchecked and additionally linked to a whole series of user accounts on the Internet.

These data ecosystems have created a number of challenges that the Internet has so far failed to solve satisfactorily. Self-confident identities could thus be groundbreaking technology and ensure an increased adaptation of blockchain technology.