What Are Decentralized Identifiers (DIDs)?

Key Takeaways:

• Decentralized identifiers (DIDs) are globally unique identifiers that can be used to identify an entity without a centralized authority. By using DIDs, users gain control over their personal information, ensuring secure and private digital interactions.
• DIDs use cryptographic techniques to ensure the security and authenticity of identities. This provides a tamper-proof and verifiable method for managing digital identities across various platforms.
• DIDs are interoperable, meaning they work seamlessly across different systems and platforms. This ensures that users can maintain a single digital identity for multiple services, simplifying processes for both individuals and service providers.

The ever-evolving digital landscape demands secure and efficient identity management solutions. Traditional identifiers like email addresses and phone numbers, reliant on third-party issuers, are vulnerable to control and revocation, creating complexities for users. This issue is exacerbated by the increasing number of digital identity verification checks.

Role of DIDs in Eliminating Single Points of Failure

The increasing frequency of identity theft, often linked to compromised email accounts, highlights the urgent need for improved control over personal identifiers. Decentralized identifiers (DIDs), powered by blockchain technology, offer a compelling solution. By distributing control and leveraging encryption, DIDs significantly reduce the risk of identity theft. Additionally, DIDs are persistent and independent of central authorities, eliminating potential single points of failure.

The decentralized nature of Web3 and blockchain technologies makes them ideal for solving the challenges of modern identity management. DIDs and decentralized identities present a promising path forward, crucial for enhancing security in the digital age. Understanding DIDs is essential for unlocking the potential of decentralized identity in Web3.

What Are the Core Properties of Decentralized Identifiers (DIDs)?

Decentralized identifiers (DIDs) distinguish themselves from traditional Uniform Resource Identifiers (URIs) through four fundamental properties. These distinctive characteristics have led the World Wide Web Consortium (W3C) to standardize DIDs.

• Permanence: DIDs are designed to be persistent, ensuring they remain valid over time. Unlike traditional URIs, they are resistant to link rot, guaranteeing continued accessibility to the associated information.
• Resolvability: DIDs are uniquely resolvable. This means users can retrieve the information linked to a DID by accessing its corresponding DID document. This document contains details about the identity, service, or other data associated with the DID.
• Cryptographic Verification: DIDs leverage cryptographic algorithms for security and verification. Public keys linked to a DID enable anyone to easily verify its authenticity.
• Decentralization: Unlike centrally controlled identifiers, DIDs operate on decentralized databases like blockchains or distributed ledgers. This decentralized approach empowers users with greater control over their identities.

Importance of Cryptography in Securing Decentralized Identifiers

Cryptography is fundamental to the security of decentralized identifiers (DIDs). It employs mathematical algorithms to protect data integrity, confidentiality, and authenticity.

Core Cryptographic Principles:

• Confidentiality: Ensures data is accessible only to authorized parties.
• Integrity: Protects data from unauthorized modifications.
• Non-repudiation: Prevents denial of sent messages or actions.
• Authentication: Verifies the identities of senders and receivers.

Cryptographic Methods:

Two primary cryptographic methods are employed in DID systems:

• Symmetric Encryption: Uses a single shared key for encryption and decryption.
• Asymmetric Encryption: Employs a public-key/private-key pair. Asymmetric encryption is particularly crucial for DIDs as it allows for secure identity management and verification without compromising control or privacy.

What Is the Role of the DID Controller in Decentralized Identity Management?

A DID controller is the administrator of a decentralized identifier (DID). This can be an individual, organization, or even an abstract entity. When creating a DID, the controller specifies its purpose, such as identifying a person or a company. This empowers users with significant control over their digital identities, eliminating the need for external authority approval. Notably, a DID can have multiple controllers, as determined by the DID method.

For example, parents might create a DID for their newborn child and link it to birth certificates. Initially, the parents would serve as DID controllers. This illustrates the flexibility of assigning multiple controllers to a single DID.

What Is a DID Document?

A DID document is a critical component of the DID ecosystem. It contains information about the DID subject, including:

• Public keys and verification methods: For authenticating the DID subject during interactions.
• Services: Associated with the DID subject, which can be used for identity verification.
• Service endpoints: Enabling issuers to provide associated services.
• Additional information: Such as digital signatures, timestamps, past resolved keys, and other cryptographic proofs or metadata related to delegation and authorization.

A collection of DID documents forms a record base, verifying the DID’s authenticity and consistency. DID documents use graph-based data structures and can be represented in various formats, with JSON-LD being a common.

What Is a DID Resolution?

DID resolution is the process of retrieving the DID document associated with a specific DID. A DID resolver, which can be software or hardware, translates the DID into its corresponding DID document. This document contains information about the DID subject, including public keys, services, and other relevant data.

What Is a DID Method?

DIDs have a unique structure differentiating them from other URIs. Different databases utilize various DID methods, as they are not tied to a single network or database. For example, some DIDs reside on the Bitcoin or Ethereum blockchains. A DID method establishes a framework for resolving a DID within a specific blockchain or distributed ledger, outlining the creation and update process for DID documents.

While sharing core functionalities, DID method implementations vary. Each DID method defines processes for creating, updating, resolving, and deactivating associated DID documents. A typical DID method structure follows this pattern:

did:example:123456789abcdefghi

Where:

• did: is the scheme identifier.
• example: is the DID method.
• 123456789abcdefghi is the DID method-specific identifier.

As of July 19th, 2022, there were 103 experimental DID Method specifications and 32 experimental DID Method driver implementations. Examples of DID method structures include:

• did:example:123456789abcdefghi
• did:sov:NRfXPgBdantKVUbEJH8pW
• did:btcr:xz35-]zv2-qqs2-owjt
• did:v1:test:nym: 3AEJTOMSxDOQpyUft juoez2Bazp4Bswj1ce7F JGybcuu
• did:ethr:0xE6Fe788d8ca2144080b0f6aC7F48480b2AEfa9a6

Types of Decentralized Identifiers (DIDs)

Decentralized Identifiers (DIDs) come in various forms, each designed to cater to specific needs and functionalities within the digital identity ecosystem. Here’s a breakdown of the four main types of DIDs:

1. Ledger-based DIDs

2. Ledger Middleware (“Layer 2”) DIDs

Building on blockchains, these DIDs introduce an extra storage layer. This layer, often a Distributed Hash Table (DHT) or a replicated database, facilitates more scalable and cost-effective DID management. It allows for creating and managing a large number of DIDs with minimal blockchain interactions, making it faster and more economical.

3. Peer DIDs

Designed for privacy and security in closed groups, Peer DIDs are only resolvable within those networks. They leverage agent protocols for secure exchanges and maintenance, offering core DID functionalities while prioritizing user privacy.

4. Static DIDs

What Are Verifiable Credentials and How Do They Work with DIDs

Imagine controlling your online identity and effortlessly sharing credentials with anyone, securely and reliably. Decentralized Identifiers (DIDs) and Verifiable Credentials (VCs) make this a reality.

Decentralized Identifiers (DIDs) provide a unique and secure way for individuals and entities to control their identities online, while Verifiable Credentials (VCs) offer a tamper-proof format for issuing and storing credentials.

What Are Digital ID Wallets?

Digital ID wallets are applications enabling individuals and entities to securely manage their digital identities and verifiable credentials. These wallets are central to the management of digital interactions, offering functionalities that enhance security, privacy, and operational efficiency. Here’s what they do:

• Manage Identifiers and Cryptographic Keys: Digital identity wallets handle identifiers and associated cryptographic keys, similar to password managers like LastPass or Dashlane.
• Manage Public Keys and Ledger Information: These wallets manage public keys and other information published to the distributed ledger, facilitating interactions between network participants.
• Exchange Credentials: The core functionality of digital ID wallets is securely exchanging credentials between holders, issuers, and verifiers. This underpins trusted identity-enabled transactions while preserving privacy.

Use Cases for Decentralized Identifiers (DIDs)

Decentralized Identifiers (DIDs) offer a wide range of potential applications. Here are a few examples:

• Applying for a job: Instead of submitting physical documents, candidates can share verifiable credentials (VCs) for education and work experience linked to their DID. Employers can directly verify these credentials, streamlining the hiring process.
• Age-Restricted Content: Age verification can be achieved through VCs linked to a DID, eliminating the need for multiple website registrations or age checks.
• Border Control: DIDs could potentially replace traditional passports, enabling secure and efficient identity verification at border checkpoints.

Conclusion

In today’s digital world, all forms of communication, transactions, and social interactions take place online. Consequently, re-evaluating how people and organizations are identified becomes crucial. Decentralized Identifiers (DIDs) emerge as a solution to address several issues, including identity theft, forgery of credentials, and the reliance on centralized databases.

DIDs are not a standalone solution but rather a critical component of a larger ecosystem. They serve as a solid foundation for innovations that will transform identity, credentials, and web ecosystems. Moreover, this development will have an impact beyond these ecosystems. It relies on blockchain and decentralized ledger technologies (DLT), which various industries are increasingly adopting.

Identity.com

Identity.com, as a future-oriented organization, is helping many businesses by giving their customers a hassle-free identity verification process. Our organization envisions a user-centric internet where individuals maintain control over their data. This commitment drives Identity.com to actively contribute to this future through innovative identity management systems and protocols.

As members of the World Wide Web Consortium (W3C), we uphold the standards for the World Wide Web and work towards a more secure and user-friendly online experience. 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 for more information about how we can help you with identity verification and general KYC processes.