Decentralized Identity is the Most Important Blockchain Goal

In the periodic table of the blockchain, identity (ID), is the most important element. The reason being is the technological breakthrough of self-sovereign digital money (Bitcoin, Ether, etc.) can likely only reach its full potential if it is coupled with a robust decentralized identity framework.

We tend not to think about our driver’s licenses and passports here in the United States. Unless of course, we have to go to the DMV (Department of Motor Vehicles) at which point we shake our fists at the heavens to lament our cruel fate. For many of us, identification is something we take for granted.

But our government issued IDs are nothing to scoff at and certainly nothing to take for granted.

The fact is that state-issued identity is a byproduct of a stable well-functioning government. Say what you want about the U.S. government but as far as I know, it has never run out of paper and ink to print new passports for its citizens.

Identity is still a massively unsolved global problem. There are one billion people on the planet without any access to identification. Most of them are in sub-Saharan Africa. Women also tend to fare worse than men. “For example, in Afghanistan, Benin, and Pakistan – all countries with gender gaps of over 15 percentage points – a married woman cannot apply for a national ID in the same way as a married man.”

If you don’t have a formal identity then your ability to navigate through the global and local economy is severely hamstrung. High-level goals like building credit to buy a home, or attending a university, become nearly impossible. But even relatively minor things like taking an international flight or voting in an election become insurmountable if you don’t have any form of government ID.

For impoverished countries, building the necessary infrastructure to support issuing IDs to citizens is expensive, organizationally challenging, technically complicated, and requires large numbers of government employees and agencies to maintain.

Blockchain technology has the potential to enable the poorest people and the least operationally capable governments a plug-and-play identity solution for their citizens. One that is global and extensible.

Organizations like the W3C realize this and are taking the initiative. Their Verifiable Credentials Data Model 1.0 specification is designed to allow individuals to take control over their online identities and for systems to integrate with the framework so they are interoperable.

After all, our formal identities are not only issued by governments. They are also issued by institutions of higher learning, trade certification bodies, credit card companies, and employers.

By anchoring our identities to a public blockchain and protecting our privacy through cryptographic proofs we can share only those relevant parts about ourselves to third-parties. For example, a website that requires you to be 18 or older can verify your date-of-birth but will know nothing else about you.

This puts the individual in full control of their identity. Which is really the way it ought to be.

Decentralized identity also has the power to unburden and untangle our digital lives. If you are like me, then you’ve become fragmented across different online platforms. I’ve lost track of many usernames and passwords over the years. It’s no wonder that most of us are increasingly willing to “Login with Facebook.” “Whatever I need to do to avoid creating yet another username and password so help me!”

But do we really want Facebook to be the guardians and gatekeepers of our online identity? Or have we traded privacy for convenience and conveniently given Facebook that much more power over our personal data to monetize.

“Identity is complex and decentralized identity solutions that put the user in the center of their own management of credentials is the only way through this complexity wormhole.” – Ankur Patel (Microsoft)

Imagine being able to “Login with Blockchain” instead of “Login with Facebook.” In that scenario you are 100% in control of your data and you only share what you want, when you want, with who you want. Much like the blockchain gives us total control over our digital money, it can also give us total control over our identity.

Of course the phrase “Login with Blockchain” is a gross oversimplification. There are many different decentralized identity frameworks vying to gain mass adoption. But increasingly they are working together, which is a good thing for all of us. The sooner we get to viable decentralized identity solution the faster we can all realize the blockchains full potential.

I look forward to the day when I can “Login with Blockchain.”