Key Takeaways:

 

In the digital world, you might assume you’re in charge of your online identity. However, massive corporations like Google and Facebook have access to your personal information, including your name, email address, and sometimes even your location. These companies retain this information, using it as they please. This is a major issue with current online identity systems, which allow these businesses to store and control your data on their centralized servers.

However, a new identity solution called Self-Sovereign Identity (SSI) is here to change that. It aims to provide users with complete control over their own digital information, taking power away from major tech corporations.

What Is Self-Sovereign Identity (SSI)?

Self-Sovereign Identity (SSI) is a digital identity model that puts you in control of your own data. You can securely store your credentials and selectively share them with websites and services, eliminating the need for them to manage your information. This significantly reduces the risk of data breaches and identity theft.

How Does Self-Sovereign Identity (SSI) Work?

Current centralized data storage systems are highly susceptible to cyberattacks and may be unreliable when critical verifications are required. Additionally, the credential verification process often proves time-consuming, leading to an increase in fraudulent IDs and unchecked certifications. SSI addresses these challenges and more, moving beyond simply restoring data control to users.

Currently, accessing services requiring verification necessitates users retrieving their IDs from their wallets. However, verifying the authenticity of an ID can be challenging. Some organizations attempt to verify ID validity through centralized online databases, but this proves impossible without an internet connection or when the website or server is inaccessible. As a result, vendors or entities may have no choice but to accept an ID, hoping it is valid.

These situations arise frequently, leading to the undetected circulation of fake credentials. In the worst-case scenario, a database responsible for ID authentication can be hacked, introducing more fake IDs and compromising the central server or database.

Redefining the Identity Landscape with SSI

Federated identity management, overseen by government-centralized systems and tech giants such as Facebook, Twitter, and Instagram, contributes to the rise in fake IDs, identity theft, and identity fraud.

The Three Pillars of Self-Sovereign Identity (SSI)

 

 

Digital identity encompasses all traceable data or internet footprint associated with an individual or entity. While centralized identity management allows easy tracing of data, SSI utilizes users’ information in unrelated patterns, enhancing privacy. SSI’s three pillars actively contribute to the creation of fraud-proof digital identities and credentials. The technology behind SSI is unique, ensuring secure and tamper-proof credentials without relying on centralized storage. Additionally, the owner’s real-world identity can be easily verified through a blockchain-powered Uniform Resource Identifier (URI), known as Decentralized Identifiers (DIDs).

These three pillars of self-sovereign identity are: Decentralized Identifiers (DIDs), Verifiable Credentials (VCs), and Blockchain.

Pillar 1: Decentralized Identifiers (DIDs)

DIDs, or Decentralized Identifiers, are a type of Uniform Resource Identifier (URI) that are globally unique and built on decentralized databases. Unlike traditional third-party identifiers that rely on centralized databases, DIDs operate on the decentralized blockchain framework. This eliminates the need for a central authority, enabling individual identification and verification on the blockchain.

One of the key features of DIDs is that they are based on encryption and decryption technology, making them cryptographically verifiable. Furthermore, DIDs do not contain any personally identifiable information (PII), which enhances privacy and security. DIDs are created, owned, and controlled by users and are independent of any organization. Check out this extensive article about Decentralized Identifiers (DIDs).

Pillar 2: Verifiable Credentials (VC’s)

Verifiable credentials (VC’s) offer a more secure and tamper-evident means of digital credential presentation than simply converting physical copies into digital copies. VC’s rely on digital signatures for ensuring validity and authenticity. This means they cannot be forged or faked without proof of tampering, making them highly secure.

VC’s can be presented to organizations or verifiers as a new form of digital credential.

The validity and authenticity of VC’s can be verified directly from the issuer within seconds. This makes them a highly efficient means of digital credential verification. Moreover, the ecosystem known as the “trust triangle of verifiable credentials” or the “three participants of SSI” oversees the issuance, validity, and authenticity of verifiable credentials. This ecosystem includes the holder, issuer, and verifier, all of whom play a critical role in ensuring the security and authenticity of VC’s. To learn more about verifiable credentials, check out this extensive article.

Pillar 3: Blockchain

Verifiable credentials and decentralized identifiers closely connects with blockchain technology. This makes self-sovereign identity (SSI) secure, private, and accessible anywhere and anytime. Blockchain is a decentralized database or ledger shared across a network of computers globally, known as a blockchain network. Each computer within the network is individually recognized as a node. These nodes collectively form an ever-active network that persistently records information in a decentralized manner, with each node possessing a copy of the data.

The blockchain system is an excellent example of a distributed ledger technology (DLT) because it is impossible to alter data stored on a blockchain through the backdoor. This is due to the blockchain system’s design, which makes it impossible to hack or cheat the system, even with the most powerful supercomputer in the world. This is because you would have to hack all the connected nodes of thousands of computers scattered globally, which is practically impossible.

Information on the blockchain is stored in blocks. Each block contains information about the previous block, known as a “cryptographic hash,” as well as a timestamp and transaction data. These pieces of information are verified through computing before being added to the existing blocks. Adding new blocks to the previous blocks forms a chain of blocks, hence the name “blockchain.” The information stored in these blocks is immutable and cannot be backdated, denied, or destroyed. Blockchain technology is the foundation for self-sovereign identity (SSI), making it the best development for identity management.

Self-Sovereign Identity (SSI): Empowering Individuals, Organizations, and Developers

The American Association of Retired Persons (AARP) released a report revealing that victims of identity theft lost over $50 billion in 2021. Thousands of credit/debit cards were compromised, and personal information was stolen from millions. Additionally, the Federal Trade Commission (FTC) has reported on the increasing cases of identity theft based on consumer reports.

These alarming statistics highlight the critical need for a more secure and reliable identity verification system. Self-Sovereign Identity (SSI) offers a robust solution, providing users with greater control over their online identities and credentials, and protecting their data from unauthorized access. The advantages of SSI extend beyond individual users, benefiting organizations and developers as well.

Key Benefits of Self-Sovereign Identity:

For Individuals:

• Enhanced Privacy: You own your data and decide who sees it. No more relying on vulnerable centralized servers.
• Control & Autonomy: You control your digital identities, choosing what information to share selectively.
• Convenient Digital Wallets: Securely store and manage credentials on your device, eliminating password overload.
• Revocation of Access: Manage your online presence effectively by revoking data access whenever needed.

For Organizations:

• Streamlined Credential Issuance: Issue credentials faster and more cost-effectively.
• Improved Verification Efficiency: Verify identities instantly and accurately, bypassing manual checks.
• Enhanced Security: Advanced cryptography ensures credential authenticity, reducing fraud for everyone.
• Continued Verification: Credentials remain valid even if the issuer goes offline.

For Developers:

• Seamless User Experience: Create passwordless and user-friendly experiences through SSI-powered wallets.
• Strong Authentication: Offer a secure and user-friendly alternative to complex authentication methods.
• Selective Disclosure: Empower users to share only essential information, protecting sensitive data.
• Direct Data Exchange: Enable peer-to-peer data exchange, boosting privacy and security by removing intermediaries.

The Three Pillars of Self-Sovereign Identity (SSI)

 

 

Self-Sovereign Identity (SSI) relies on a collaborative ecosystem to establish trust and validity of digital credentials. This mirrors traditional credential issuance, where a university issues a degree a student presents to a potential employer. In SSI, this three-way interaction is known as the Trust Triangle, consisting of the issuer, holder, and verifier.

1. The Issuer: The Credential Source

The issuer, often an organization or accredited individual, holds the responsibility for creating and issuing verifiable credentials. Examples include universities, healthcare providers, governments, and banks. Their role is to validate and securely issue credentials to individuals.

2. The Holder: The Credential Owner

The holder is the individual who possesses and manages their verifiable credentials. They have complete control over their data, deciding when and how to share it. Holders can selectively disclose specific credential information to different verifiers, ensuring privacy control.

3. The Verifier: Trustworthy Credential Validation

Verifiers are entities or organizations that request and validate the credentials presented by the holder. They rely on this information to make informed decisions, like granting access to services or benefits. Verifiers can easily confirm the authenticity and validity of credentials by directly interacting with the issuer, eliminating manual checks and intermediaries.

Managing Self-Sovereign Identity with Digital ID Wallets

Digital ID wallets are essential tools for seamlessly managing digital identities and verifiable credentials. They provide secure, decentralized storage for credentials, guaranteeing integrity and accessibility. Unlike traditional methods relying on email or downloads, digital ID wallets securely store credentials on users’ devices.

Additionally, these wallets streamline access to credentials. Users can easily share required information directly from their digital wallet when verifiers request proof of identity or specific credentials. This eliminates the need for multiple passwords or physical documents, simplifying identification and verification processes while empowering individuals to manage their self-sovereign identity effectively.

The 10 Principles of Self-Sovereign Identity (SSI)

In 2016, Christopher Allen introduced ten critical principles that underpin any effective Self-Sovereign Identity (SSI) system. These principles guide the development and implementation of secure and trustworthy SSI solutions.

1. Existence

Digital identities must be grounded in reality, connecting to a verifiable physical entity or individual. This ensures a reliable and authentic link between the digital and physical worlds.

2. User Control

Individuals have the ultimate authority over their digital identities. This includes control over access levels and permissions granted to others regarding their data.

3. Unrestricted Access

Users should always have unrestricted access to their own identity data. This prevents third-party service providers from arbitrarily denying access to personal information.

4. Transparency by Design

The operations and management of SSI systems should be transparent and open for scrutiny. This fosters trust and accountability for all stakeholders involved.

5. Persistence for Life

Digital identities should be long-lasting, allowing individuals to maintain them over time. If termination is necessary, the decision should lie with the user, not the system.

6. Portable Identities

Identity information and associated services should be portable. Users should be able to effortlessly transfer their credentials and data between different SSI providers. This portability ensures continuity and prevents vendor lock-in.

7. Interoperable Systems

SSI systems should be designed for interoperability. Identities should function seamlessly across various platforms and gain international recognition.

8. Consent is Key

Obtaining user consent before sharing and utilizing identity information is crucial. This ensures individuals maintain complete control over data disclosure.

9. Data Minimization

Individuals should only disclose essential data in specific situations. Sharing sensitive or unnecessary personal information should be minimized whenever possible.

10. User Data Protection

Users’ rights to their identity data should always be protected. This protection should remain steadfast even in the event of conflicts or disagreements between the SSI system and the individual.

Conclusion

Web 2.0 has made it harder for users to control their data, but many new developments and protocols are changing this. One of these is Self-Sovereign Identity (SSI), which will give people more control over their digital identities. This will change the way we interact online and could disrupt the business models of internet-based marketing platforms. This is bad news for tech giants, but it is good news for people who care about their privacy.

Identity.com

The SSI approach to identity management aligns with what Identity.com represents. One of our pursuits is a user-centric internet, where users have control over their data. More reason why Identity.com doesn’t take the back seat in contributing to this future via identity management systems and protocols. We also belong to the World Wide Web Consortium (W3C), the standards body for the World Wide Web.

The work of Identity.com as a future-oriented company is helping many businesses by giving their customers a hassle-free identity verification process. Identity.com is an open-source ecosystem providing access to on-chain and secure identity verification. Our solutions improve the user experience and reduce onboarding friction through reusable and interoperable Gateway Passes. Please get in touch or visit our FAQs page for more info about how we can help you with identity verification and general KYC processes.