When you’re online, you may think you control your digital identity. However, large corporations such as Google and Facebook have access to your personal details, including your name, email, and sometimes even your location. They retain this information, utilizing it as they see fit. This is a significant issue with the current online identity systems, which allow these companies to store and control your data on their centralized servers.

However, a new solution known as self-sovereign identity (SSI) is here to change this scenario. It aims to give users full control over their own digital information, taking power away from big tech companies.

What Is Self-Sovereign Identity (SSI)?

Self-Sovereign Identity (SSI) is revolutionizing the digital identity landscape by providing individuals with full ownership and control over their digital identities. Unlike traditional centralized database systems, SSI gives users the power to determine the extent to which their data is disclosed to websites, applications, and services. This level of control helps to prevent large-scale centralized server breaches that often result in identity theft and fraud.

SSI works by storing and managing digital identities on a decentralized ledger (such as a blockchain). This means that users have complete control over their own data and can choose to share it with whomever they want, whenever they want.

One of the key advantages of SSI is the ability for users to use their smartphones as digital ID wallets to store their identities and personal information. This innovative approach ensures convenient access to personal data at any time. It effectively transforms smartphones into digital ID cards with various verification credentials.

Why Self-Sovereign Identity (SSI) Is Non-Negotiable

Centralized data storage systems are highly vulnerable to hacking and may be unreliable when crucial verifications are required. Additionally, the verification process for credentials is often time-consuming, leading to an increase in fake IDs and unchecked certifications. SSI tackles these challenges and more, going beyond simply returning data control to users.

Currently, credentials require users to retrieve an ID from their wallets to access services that require verification. However, ensuring the authenticity of an ID can be challenging. Some organizations attempt to verify IDs’ validity through central online databases, but this is 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 occur frequently, leading to the undetected presence 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.

Self-sovereign identity (SSI) is revolutionizing the identity ecosystem, which is estimated to be worth $1 billion by 2024 and is predicted to become the next trillion-dollar market within a few years. While concerns about SSI security have been raised, the pillars of SSI are proving to be a secure solution to combat global identity theft, which costs billions of dollars annually.

The 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 identity and credentials. The technology behind SSI is highly unique, ensuring that credentials remain tamper-proof while avoiding centralized storage. Additionally, the owner’s real-world identity can be easily verified through a blockchain-powered Uniform Resource Identifier (URI), called Decentralized Identifiers (DIDs). The three pillars of SSI are:

1. Decentralized Identifiers (DIDs)
2. Verifiable Credentials (VCs)
3. 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. DIDs, unlike third-party identifiers that rely on centralized databases, operate on the decentralized blockchain framework. This allows for individual identification and verification on the blockchain, eliminating the need for a central authority.

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 (VCs)

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 VCs. 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 in the network is known as a node, and together they form a continuously active network that records information in a dispersed manner.

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.

The Benefits of Self-Sovereign Identity (SSI) for Individuals, Organizations, and Developers

The American Association of Retired Persons (AARP) released a report highlighting 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. The Federal Trade Commission (FTC) also shared identity theft cases based on consumer reports.

These alarming statistics underscore the urgent need for a more secure identity system. SSI offers users enhanced control over their online identity and credentials, safeguarding data from bad actors. The benefits of SSI are not just for individuals; they extend to organizations and developers as well. Here are the key benefits of Self-Sovereign Identity:

Individual Benefits:

• Enhanced Privacy: Full ownership of personal data, minimizing dependence on breach-prone centralized servers.
• Control and Autonomy: Complete control over digital identities, with selective data disclosure.
• Convenient Digital Wallets: Secure storage and management of credentials on personal devices, eliminating multiple passwords.
• Revocation of Access: Ability to revoke data access, ensuring effective online presence management.

Organizational Benefits:

• Streamlined Credential Issuance: Faster and cost-effective credential issuance.
• Improved Verification Efficiency: Instant and accurate identity verification, bypassing manual checks.
• Enhanced Security: Advanced cryptography ensures credential authenticity, reducing fraud risks.
• Continued Verification: Credentials remain valid even if the issuer is offline.

Developer Benefits:

• Seamless User Experience: Passwordless and smooth user experiences through SSI-powered wallets.
• Strong Authentication: A secure and user-friendly alternative to complex authentication methods. Instead, it provides a simpler, more secure, and user-friendly alternative.
• Selective Disclosure: Users share only essential information, protecting sensitive data.
• Direct Data Exchange: Peer-to-peer data exchange enhances privacy and security, removing intermediaries.

The Three Participants of an SSI System

 

 

SSI system consists of three parties that make a credential credible and valid, just as it is in traditional credential issuance and presentation. For example, a university issues a result for a graduating student, who then presents it to a company for a job application. The traditional process involves three parties: the university, the student, and the company that wants to hire the graduate. The issuer, the holder, and the verifier respectively represent these three participants. In the Verifiable Credential Ecosystem, the three participants of self-sovereign identity are the “Trust Triangle” which contains the issuer, holder, and the verifier. 

1. The Issuer

This entity, whether an organization or an authorized individual, plays a crucial role in issuing verifiable credentials to individuals. Examples of issuers include educational institutions, healthcare centers, government agencies, and financial institutions. They are responsible for validating and issuing credentials to individuals in a secure and trustworthy manner.

2. The Holder

The holder is the individual who receives and holds the verifiable credentials. They have complete control over their own credentials and decide how and when to share them. The holder can selectively disclose specific information to different verifiers, maintaining control over their personal data and privacy.

3. The Verifier

Verifiers are the entities or organizations that request and verify the credentials presented by the holder. They rely on the information provided in the credentials to make informed decisions or grant access to certain services or benefits. Verifiers have the ability to instantly verify the authenticity and validity of the credentials. They can achieve this by interacting directly with the issuer, eliminating the need for time-consuming manual checks or intermediaries.

Secure Storage and Easy Access with Digital ID Wallets

Blockchain-powered digital ID wallets play a critical role in facilitating the seamless management of digital identities and verifiable credentials. These wallets provide secure and decentralized storage for individuals’ credentials, ensuring their integrity and accessibility. Unlike traditional systems that rely on email attachments or downloadable files, digital ID wallets keep credentials securely stored on the user’s device.

Digital ID wallets also enable easy access to credentials when needed. When a verifier requests proof of identity or specific credentials, the user can simply share the necessary information directly from their digital wallet. This eliminates the hassle of remembering multiple passwords or carrying physical documents, streamlining the identification and verification processes.

Ten Principles of Self-Sovereign Identity 

In 2016, Christopher Allen wrote about Self-Sovereign Identity with a list of guiding principles to which any SSI system must adhere. The following principles serve as a foundation for the development and implementation of self-sovereign identity:

1. Existence 

A digital identity should tie to a physical entity or individual. This ensures a reliable and authentic connection between the two.

2. Control

Individuals must have ultimate control over their own identities, including the level of access and sharing permissions granted to others.

3. Access 

Users should always have access to their own identity data, preventing third-party service providers from arbitrarily denying access.

4. Transparency

The operations and management of SSI systems should be transparent and open for scrutiny by all stakeholders, ensuring trust and accountability.

5. Longevity 

Digital identities should be persistent, allowing individuals to maintain their identities over an extended period. If permanence is not possible, the decision to terminate an identity should rest with the individual, not the system.

6. Portability

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

7. Interoperability

SSI systems should be designed to facilitate interoperability, enabling identities to work across various platforms and be internationally recognized.

8. Consent

9. Minimalization

In specific cases, individuals should only disclose necessary data, minimizing the sharing of sensitive or unnecessary personal information.

10. Protection

Users’ rights to their own identity data should always be protected. This protection should remain in place, even in cases where conflicts or disagreements arise 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.