Identity in a Decentralized World 👥

Hey everyone!

How excited were you to get a driver’s license or passport? (*Gives a second to reminisce*) Yeeaaaaah there’s something special about having that printed piece of identification in your hand for the first time. Now are you ever afraid of losing it or that info getting in the wrong hands? (*Gives another second to day dream*). Whether it’s losing your passport while traveling or wondering if your personal data was a part of a company data breach, losing your ID is a scary thing. And sadly, there’s limits to how our identities are currently organized. But thankfully, as you may have guessed it, web3 provides a new way to manage and secure your personal information. So today, we’re going to give you an overview of what digital identity looks like on blockchain. Let’s go!

What is digital identity?

This is an interesting question and, depending on who you ask, you may get different answers. While your 13-year old cousin may say it’s their presence on TikTok, others may say it’s their email address. As is the case with most identity related questions, both IRL (in real life) and digital, there are several ways that people and organizations can identify themselves. We find it most helpful to break it down into three buckets:

• Individuals: On an individual level, we typically consider core aspects of our identity to include things such as our names, birthday, nationality, race, license, passport, etc. Our identity is an integral part of how society sees us and the ways in which we interact with other people and entities. Typically, these data points about us are stored by the government and items such as our passport, license, and SSN are “printed” and given to us to keep with us for life. Shoutout to everyone who kept their special documents in boxes under their beds growing up! 🗃 Definitely not the most effective or the safest, but it got the job done 🤷🏽‍♀️. 

• Companies: We all know that companies typically collect loads of data about each of us in order to create more customized experiences as we engage with content. However, with the introduction of privacy-centric regulations, such as GDPR, keeping this data stored away makes it more difficult for the companies to leverage our data without our consent. This is a bit of a double-edged sword though. On one hand, our data is protected, but on the other hand the very reason we love how effective Google’s search algorithms are is because they leverage our data and are able to target us based on our digital personas. 

• Internet of Things (IoT) devices: With 7-billion internet-connected devices across the world, these devices are responsible for securely managing access to both sensitive and non-sensitive data on the individuals and entities that use them. However, the security factor is usually an afterthought that leads to large scale hacking becoming more prevalent. And no one wants their data to be the one that gets stolen because that could be very, very bad.  

Blockchain technology will disrupt the way we store and manage our digital identities. 

There are 3 main issues with digital identity today:

1. Data security – In 2018, 2.8 billion consumer data records (estimated to cost more than $654 billion!) were exposed by hackers. 2.8 billion. That’s a wild feat! The only reason it was possible to accomplish this is because we store our most valuable identification information on centralized government databases, mostly still supported by legacy software. This makes it EXTREMELY attractive to hackers to gain access to personally identifiable information (PII) of millions of users. 

2. Inaccessibility –  Did you know that 1.1 billion people around the world have no proof of identity? And that 45% of those without an identity are among the poorest on the planet? In a world where you have to show your birth certificate to enroll in school and apply for jobs, not having proof of your identity is a severe roadblock to gaining access to opportunity. 

3. Identify fraud & theft – If you’ve ever received an Instagram or Facebook message from a friend asking you to report a page that’s imitating them, then you probably understand just how easy it is to impersonate someone on the internet.  Aside from users having multiple identities associated with their usernames, there is typically a weak link between digital and in-person identities which makes it easy to create fake accounts. This means that someone can go on your social media account right now, steal your pictures, pretend to be you, then DM everybody and their mama asking if they can hold a dollar. Scary hours out here. 

Lol @ this classic scene from The Office ^

Blockchain enables us to build secure decentralized identities. 

Simply put, decentralized identities give people official proof of identity and complete ownership and control over their identities in a secure and user-friendly way. Users are able to control their own PII and provide only the information that is required to be verified, which ultimately promotes transparency and security. These are powered by decentralized identifiers (DIDs) which give users a private key that can prove that they own or control their identity.

So, what does this mean for you?

Data Monetization: 

The world is headed to a point where corporations will no longer own and profit off of our data without consent or compensation. This means more control and more quantifiable economic benefit for the everyday person. There are quintillion bytes of data created each day, by 4.39 billion internet users. We expect that over 60% of the global GDP is going to be digitized by 2022, which means that personal data will continue to increase in value. individuals will eventually be able to monetize their personal data, for example, by renting it to AI training algorithms or choosing to sell their data to advertisers. *cues BBHMM by Rihanna* 

Self Sovereign Identity: 

Self-sovereign identity (SSI) is the idea that people and businesses can store their own identity data on their own devices and choose which pieces of information to share, without relying on a central repository of identity data. These identities could be created independent of centralized entities, including nation-states, corporations, or global organizations.

Data Portability:

Data portability refers to a person’s ability to have their personal data transmitted directly from one place to another in order to enhance the user experience and cut down on the need to reverify their identity across different platforms. It’s similar to when you log into a website using your Gmail account, instead of having to make a brand new account for each website, but this time it’s for your more personal information. It saves time and energy, and ultimately leads to greater user adoption. A marketer’s dream. 

With all of the innovation happening in the space, we’re looking forward to the day when all of our important documents and digital identifiers live on the blockchain in a secure and private way! There’s even an opportunity for ENS domains (remember wayyy back in this post when we talked about these?) to serve as a hub for us Until then, we’ll keep putting our birth certificate and social security card in random corners and file cabinets in our homes. 🥲

Thanks for reading!