Disclosure: The opinions expressed here are solely those of the author and do not reflect the views of crypto.news’ editorial.
Determining the exact moment humanity transitioned to digital citizens is challenging. (Was it broadband? Smartphones? AI?) What we do know is that we are now, for all intents and purposes, more digital than physical. Our bodies remain flesh and blood, yet our minds—where we craft art, music, and poetry—now exist in the cloud.
Summary
- Digital identity is synonymous with personhood: Access to employment, education, and society hinges on digital IDs, making control over identity a fundamental human issue, not merely a technical one.
- Centralized identity systems pose significant risks: They centralize sensitive data into single points of failure, facilitating surveillance, exclusion, censorship, and severe breaches.
- Self-sovereign identity is the necessary solution: A decentralized, cryptographic ID allows individuals to manage their data access, verify facts without disclosure, and eliminates the need for institutions to collect personal information.
Thus, when discussing digital identity, we are essentially talking about ourselves. In the 21st century, your digital footprint forms your identity online.
Providing a person with a digital identity equips them with opportunities for work, education, and income. Removing that access effectively ostracizes them from society. A look at China illustrates this; for instance, being caught without a motorcycle helmet can lower one’s social credit score, affecting work and travel possibilities.
This does not imply that digital identity is inherently dystopian; like all technologies, it can be either benign or malignant. It is ultimately human decisions that dictate whether it fosters accessibility or restricts it, making it essential for digital IDs to serve their owners rather than the reverse. Unfortunately, due to fundamental flaws in their structure, centralized identity systems are incapable of achieving this and will inevitably be supplanted by superior technology.
The issue with centralization
Centralized ID systems accumulate sensitive data, including biometrics, credentials, financial records, and behavioral histories. As our online activities increase and more of our lives—ranging from healthcare to education—are digitized, this pool of information expands. With this growing data comes heightened risks for unauthorized access.
As our varied digital services become more interconnected, we will reach a point where a single digital identity can facilitate everything from social media logins to medical appointments. While this change will enhance convenience, it will also introduce vulnerabilities. When all data relies on one central hub, attackers need only breach that one system to gain access to everything.
A skilled hacker or corrupt government could easily expose this information. The consequences could be deplatforming, exclusion from essential services over “wrongthink,” or your credit card information being sold on the dark web. However, it doesn’t have to be this way.
We possess the technology necessary to create a future where our data isn’t stored high in central silos—because it never left our control in the first place. This necessitates moving away from centralization toward self-sovereign solutions.
Self-sovereignty as a service
Self-Sovereign Identity, or SSI, reverses the power dynamic, reinstating control with the individual. It’s your identity, and you own it. Importantly, this doesn’t entail added complexity; you don’t need to master advanced technology or manage data storage on a personal computer; it’s all encrypted and saved on a distributed ledger accessible solely by you.
Trust is maintained cryptographically, as individuals dictate their access and permissions, while the breach of one credential issuer does not affect all users’ identities. This arrangement not only benefits users but also allows governments, universities, and institutions to issue credentials without retaining them.
SSI functions by combining distributed storage intrinsic to blockchain—which eliminates centralized databases laden with sensitive data—alongside cryptographic technology, allowing only authorized entities to view the data. Privacy mechanisms such as Garbled Circuits, used by COTI, and zero-knowledge proofs permit verification of information validity without disclosing the actual contents. You don’t need to reveal your date of birth or passport scan online just to prove you’re old enough to purchase alcohol.
Decentralized ID fosters trust while eliminating single points of failure.
Why not now?
If SSI is so advantageous, you might wonder why it isn’t universally adopted. What prevents credential issuers from embracing SSI? The primary obstacle is the significant shift in how businesses perceive data and user access. Change is challenging: it’s why the internet still relies on password verification despite its known vulnerabilities.
The technology is in place, but awareness of its potential—and the readiness to implement it—is still lacking. This transition will occur, but it will require time; it took more than a decade for blockchain technology to gain widespread trust and understanding. Given that SSI builds on this foundation, it will necessitate adjustment from both users and credential issuers.
Nevertheless, decentralized identity is the unavoidable future for digital IDs. Each new database breach and data exploitation incident strengthens the argument for its implementation. Users need absolute assurance of confidential verification, knowing that companies seeking personal information verify only what is essential, rather than accumulating vast, retainable profiles. Businesses, for their part, must be freed from the responsibility of managing such data while adhering to regulations like GDPR.
Not everything online needs to be decentralized. However, the manner in which we engage with everyday platforms and services must and will be. This is the only way to build a secure internet that benefits everyone.
