We are continuously exposing our digital identity over social media platforms, e-commerce websites and banking websites. There seems to be no end to digitization, which is still expanding by multiple folds. We seem to be ignorant about the fact that digitization is also causing relentless theft of our digital identity data.
Hackers have turned our identity data into a pool of digital data that is fueling the growth of cybercrime.
Despite signing up for account alerts, placing a security freeze and securing the devices, the global fraud count is growing. The number of fraud victims recorded in 2017 was 1 million more than those in 2016. All these frauds were highly sophisticated in nature which has rendered the existing combat mechanisms incapable.
As per the Federal Track Commissions’ reports for 2017, the identity theft ranks third in the fraud category list and the credit card frauds topped the list with 133,000 reported incidents. All these imprints are our permanent digital identity which can be exploited by anyone.
Blockchain 1.0 offered us an immutable distributed ledger to record data in a secure manner while maintaining its transparency. As the technology matured with Smart contracts, visionaries started using it to secure identity data. Many governments are already issuing digital identifies over Blockchain to their citizens, ensuring that they are not victimized by cyber crimes.
Government based identity management solutions are converging legacy systems and Blockchain:
A government authority will issue a token of identity over Blockchain and the hash will be recorded. Using an App, the identify holder will be able to retain a digital copy of his identity. He will also have the public key to the token hash that gives him access to his identity data.
But there is a flaw in such a system, the identity issuance still remains centralized. This is where the concept of Decentralized Identity (DID) comes into the picture. It allows an individual to maintain a self-sovereign identity.
Decentralized identity allows identity owners take the control of their identity management back in their hands.
They can take complete control and protection of their digital identity using the decentralization nature of Blockchain.
By definition, a decentralized identity (DID) is basically a specification defined by W3C (World Wide Web Consortium) that has a global document format to recognize the identity owner.
DIDs are the root of decentralized identity which empowers people and organizations with immutable digital identifiers that are fully under their control. This eliminates the need for a central authority or third party to maintain records.
Legal identity management systems were centralized, with the advent of distributed ledger technology (DLT), the element of complete decentralized identity management was established.
Devoid of any single point of failure and centralization, the entities can create and control the identifiers known as DIDs in a trustless environment. Each DID is defined by DID Documents which are a set of service protocols.
Each distributed ledger stores a specific DID method which defines how a DID is registered, resolved, updated and revoked.
The DID methods can also be developed for centralized systems and this is how interoperability Blockchains and centralized networks are maintained.
DIDs are being used to identify a person, product or an organization. Multiple DIDs need to be established for multiple purposes like age, name, address and more unique data. A DID is just a unique identifier of each such set of data.
The practical usage is rendered to DID when certain protocols are used on top of DID. These protocols are known as DID Auth and they render real-world application to DIDs