Five worthy reads is a regular column on five noteworthy items we have discovered while researching trending and timeless topics. This week, we explore decentralized identity, aka self-sovereign identity.
From boarding a plane to buying a house, we share our identity credentials, like social service numbers, with multiple people and businesses. A survey last year identified that 83% of the average person’s data is held by companies they have interacted with only once. One might not remember or track all the instances where they produced their IDs for verification or shared the corresponding details. This adds to the existing risk of data breaches and privacy infringements that organizations and individuals face every day. The decentralized identity approach leverages blockchain technology to overcome these challenges, allowing users to retract control of their personal information from the hands of service providers.
According to Gartner, decentralized identity (DCI) leverages technologies such as blockchain or other distributed ledger technologies to allow an entity to create and control its own digital identity. Every user will have a self-owned digital “wallet” containing verified identity credentials provided by certified issuers such as the government or an employer. Users can deploy this wallet at times of verification, say during hotel check-in, and the ID associated with the wallet would share proof of the verified PII. This way, only the information the user wishes to share will be shared with the service provider through the wallet.
At any point, users can update, modify, or retract the shared data. DCI allows users to own and process their personal information with complete transparency, thereby mitigating the risks of data leaks and privacy infringements.
With that said, here are five interesting reads that discuss DCI.
DCI offers immense benefits to users, including identity autonomy, ease of access, privacy, and transparency. If only one piece of information is required by a vendor or service provider, users can share exactly that easily and quickly from a single source.
By leveraging blockchain technology, DCI facilitates easier logins, faster checkouts, and smoother online experiences. Businesses have reported immediate gain in efficiency and ongoing cost savings.
DCI, also known as self-sovereign identity, requires a solid governance framework for the model to succeed. Interoperability with existing identity management systems and proper key management are essential to achieve true value out of the model.
Travel and hospitality is one industry where identity verification is crucial and mandatory. The impact of DCIy on this sector is profound and could even help service providers offer a superior customer experience based on the secure data shared by users.
The pandemic has caused vaccination certificates and passes to become verification for entry to many places. DCI provides the ideal solution to the data privacy and identity risks associated with these passes and also offers a way to save and share personal health information securely.
Gartner predicts that DCI will become the norm by 2024. DCI is proving to be the future of digital identity, allowing data sovereignty. Companies don’t have to store personal data to make identity verification work. The risk for being out of compliance with the GDPR and other data privacy laws disappears. This model is yet more proof of blockchain technology’s potential and acceleration rate.