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Introduction: Verifiable Credentials, User Authentication, and Web 3.0
The internet is evolving rapidly. From the early days of Web 1.0, we transitioned to Web 2.0, and now we’re striving towards embracing Web 3.0. As we journey into this new era, we’re witnessing the development of innovative tools and a transformation in how the web functions.
Web 3 promises to streamline and provide a more secure authentication process. As a result, there’s no longer a need for passwords, PINs, and emails that were common in the Web 2.0 era. One of the driving forces behind this technological improvement is called “Verifiable Credentials (VCs)”.
What are Verifiable Credentials (VCs)?
Verifiable Credentials (VCs) are a new technology that makes it possible to digitally sign and cryptographically secure credentials, documents, or personal data. They go beyond digital versions of physical credentials by offering significantly improved efficiency, speed, and security in issuance and verification.
Verifiable credentials come with increased privacy protection compared to traditional documents or data-sharing methods. During verification, a user can choose to disclose or submit only necessary information without revealing additional personal details.
For example, consider a scenario where a user needs to prove they are over 18 years of age. Instead of submitting an entire international passport, the user can provide a verifiable credential. This credential specifically confirms the user is over 18, without revealing the exact date of birth.
Compared to the traditional means of verification, the user would have needed to reveal the complete international passport document, which would’ve also shown the user’s middle name, address, etc. Cryptography helps to confirm the trustworthiness of this information, document, or data using the attached public key of the issuer.
What Is User Authentication?
User Authentication is the method a system, like a website or app, uses to confirm a user’s identity. It’s a crucial step to make sure the person is really who they say they are before letting them into the system or giving them access to data and resources. It’s a key part of cybersecurity, ensuring that only the right people get access. In the era of Web 2.0, this usually means users logging in with things like email addresses, passwords, PINs, or even biometric data.
Challenges and Vulnerabilities of Traditional Authentication
While traditional authentication has served us for many years, it’s not without its flaws. Understanding these issues helps us see the value of newer solutions like verifiable credentials. Here are some key vulnerabilities of older methods:
1. Brute-Force Attacks
This is when hackers keep trying different passwords and usernames until they find the right match. Some even use software to speed up this process, targeting many accounts simultaneously.
2. Weak Passwords
Many people use simple passwords, like their birthdate or basic personal details. This makes it easy for hackers. Plus, using the same password on multiple sites increases the risk.
3. Phishing Attacks
Hackers send fake emails or messages to trick people into sharing their login details. They might create fake login pages that look real to deceive users.
4. Issues With Two-factor Authentication (2FA)
While 2FA enhances security, it’s not immune to threats. In a SIM swapping attack, for example, a hacker could intercept the one-time password sent to a user’s phone. Once they have this, they can access the user’s account and change the password, locking out the legitimate owner.
5. Insider Threats
Sometimes, employees with access to systems misuse their power, potentially harming the system for personal gain. This type of attack is known as an insider threat and it can be very difficult to detect and prevent. It can involve accessing the system without permission, stealing confidential information, or even disrupting the system.
6. Man-in-the-Middle (MitM) Attacks
Here, attackers secretly intercept and possibly alter the communication between a user and a system to steal information or spread harmful software.
7. Social Engineering/Psychological Attack
Attackers often use psychological tricks, sometimes referred to as “emotional scams,” to manipulate users into sharing their login details. By pretending to be trustworthy or friendly, they deceive users into revealing sensitive information. This tactic is particularly common on social media platforms.
8. Ease of Attack of Centralized Databases
Traditional methods often store user data in one central place, which can be a target for attacks.
How Are Verifiable Credentials Changing User Authentication?
Verifiable credentials have the potential to streamline identity verification, enhancing the user experience across websites and applications. Here’s why you should consider adopting verifiable credentials:
1. Reduced Password Fatigue
Remembering multiple passwords is a common challenge. With digital ID wallets storing verifiable credentials, users can authenticate across various platforms without the need for passwords. According to Business Reporter, employees reportedly spend an average of 11 hours per year remembering or resetting passwords.
2. Improved Security and Privacy
Verifiable credentials elevate data sharing security. Users only share the necessary details for a transaction, minimizing data exposure of personal information and reducing risks like breaches and identity theft.
3. Clear User Consent
Users’ consent to data is crucial in 2023 due to privacy laws like GDPR and CPRA. By using verifiable credentials, users consciously and explicitly consent to sharing their data, since the data is entirely under their control, not the third party’s.
4. Empowering Users With Data Control
Third parties do not have absolute control over users’ data, as users are the custodians of their own data. In fact, many users have the ability to control how and when they share their data, as well as how and with whom they share it. Users can also make money from their digital identity and online footprint if they choose to, a reality that was vague under Web 2.0 but profiting companies like Facebook, Google, and Amazon.
5. Decentralization Benefits
Verifiable credentials are built on decentralized ledger technologies, similar to blockchain. This approach diverts user data away from centralized entities that profit from it. Users can now store their identities in self-sovereign wallets, a departure from the centralized storage methods prevalent in Web 2.0.
6. Interoperability Across Different Platforms
Verifiable credentials promote seamless interactions between platforms. An organization can issue these credentials to a user, and another entity can verify its authenticity without a central authority’s involvement.
7. Trust and Verification
The essence of verifiable credentials lies in their trustworthiness. Decentralization means any organization can validate a credential without a third-party mediator when it is issued by another organization. The credentials are cryptographically signed by the issuer, and the recipient can verify the signature using the public key of the issuer. This ensures that the credential is authentic and has not been tampered with.
8. Multiple Verifiable Credential Use Cases
While verifiable credentials offer interoperability, they go a step further by providing a unified solution for both online and physical access. Unlike traditional methods where emails and passwords are primarily for online access and access cards, VC’s serve both purposes. For example, a VC can be used to unlock a door to a physical building or to access an online account. Their user experience is similar to biometric authentication, allowing seamless access both online and in physical locations.
Verifiable Credentials lead the way into a new era of user authentication in a world where digital identity and data protection are of the utmost importance. They represent a paradigm shift because they restore power to individuals, guarantee the security of our digital communications, and free us from the burden of constantly changing passwords.
Verifiable credentials improve internet development and offer a better future for digital authentication by addressing privacy, security, and user-friendliness. This new technology has changed digital identity verification forever.
Decentralization, ease of user authentication, data protection using blockchain, and tools like verifiable credentials are a few of the things we stand for at identity.com. Our company 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.
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 for more info about how we can help you with identity verification and general KYC processes.