Decentralized Identifiers

Last updated on Jan 13, 2023

I. Introduction

Explanation of what decentralized identifiers (DIDs) are

Decentralized Identifiers (DIDs) are a new way of managing digital identities that are based on decentralized and self-sovereign principles. Unlike traditional digital identity systems, which rely on centralized authorities to verify and manage identities, DIDs allow individuals to have full control over their own identities. This is achieved by using decentralized technology, such as blockchain or linked data, to create a tamper-proof and immutable record of an individual's identity.
A DID is a unique identifier that is associated with a specific individual or entity. It is created and controlled by the individual or entity it represents and is not controlled by any centralized authority. This allows individuals to have full control over their own identities and personal data, and eliminates the need for centralized authorities to manage and verify identities.
DIDs are also interoperable, meaning they can be used across different systems and platforms. This allows individuals to use their DID to authenticate themselves and access different services and resources, without the need for different identities or logins for each service.
DIDs are designed to address many of the problems with current digital identity systems, such as centralization, lack of control over personal data, and vulnerabilities to hacking and data breaches. They also provide a more efficient and interoperable way of managing digital identities.

Brief overview of the current state of digital identity management

Digital identity management is the process of creating, storing, and managing digital identities for individuals and entities. It is an essential aspect of today's digital world, as it enables online transactions, access to resources, and communication. In recent years, the use of digital identities has grown exponentially, and it has become increasingly important to have secure and efficient ways of managing them.

The current state of digital identity management relies heavily on centralized systems, where a centralized authority, such as a government or a corporation, verifies and manages identities. These systems often require individuals to provide personal information and rely on password-based authentication methods. This approach has several drawbacks, including a lack of control over personal data, vulnerabilities to hacking and data breaches, and inefficiency and lack of interoperability.

Another problem with the current state of digital identity management is the use of multiple identities across different platforms and services. This often requires individuals to create and remember multiple usernames and passwords, which can be a hassle and increase the risk of identity theft.

In recent years, with the growing concern about data privacy, more people are seeking more control over their personal data, and more secure and transparent ways of digital identity management. As a result, there has been a growing interest in decentralized identity management systems, such as Decentralized Identifiers (DIDs), which provide a more secure and efficient way of managing digital identities.

In conclusion, the current state of digital identity management relies heavily on centralized systems that have several drawbacks, such as lack of control over personal data, vulnerabilities to hacking and data breaches, and inefficiency and lack of interoperability. The growing concern about data privacy has led to the development of decentralized identity management systems such as Decentralized Identifiers (DIDs) which provide a more secure and efficient way of managing digital identities.

II. The problems with current digital identity systems

Centralization and lack of control over personal data

Centralization is a major problem with the current state of digital identity management. Centralized systems rely on a central authority, such as a government or a corporation, to verify and manage identities. This means that individuals have to entrust their personal information to these centralized authorities, who then have control over it. This lack of control over personal data can be a major concern for individuals, as it increases the risk of data breaches and identity theft.

Centralized systems also make it difficult for individuals to access and manage their own personal data. In many cases, individuals have to contact the centralized authority and go through a cumbersome process to access their personal data. This can be a major inconvenience and can make it difficult for individuals to ensure that their personal data is accurate and up-to-date.

Furthermore, centralized systems can also limit the interoperability and portability of digital identities. This means that individuals may have to create multiple identities and go through different verification processes to access different services and resources.

In contrast, Decentralized Identifiers (DIDs) provide a solution to the problem of centralization by allowing individuals to have full control over their own identities and personal data. DIDs are created and controlled by the individual or entity they represent, and are not controlled by any centralized authority. This allows individuals to take back control over their personal data, and eliminates the need for centralized authorities to manage and verify identities.

Vulnerabilities to hacking and data breaches

Vulnerabilities to hacking and data breaches are major concerns with the current state of digital identity management. Centralized systems store personal information in a central location, making them a prime target for hackers. Once a hacker gains access to the central system, they can potentially access the personal information of many individuals at once. This can result in large-scale data breaches that can have serious consequences for individuals, such as identity theft and financial loss.

Centralized systems are also vulnerable to social engineering attacks, where a hacker tricks an individual into giving away their personal information. This can be accomplished through phishing emails, where a hacker poses as a legitimate organization and tricks an individual into providing personal information.

Another vulnerability of centralized systems is the use of password-based authentication methods. Passwords can be easily guessed or cracked, and if an individual reuses the same password across multiple accounts, a hacker can gain access to multiple accounts with just one password.

Decentralized Identifiers (DIDs) provide a solution to the problem of vulnerabilities to hacking and data breaches. DIDs use decentralized technology, such as blockchain or linked data, to create a tamper-proof and immutable record of an individual's identity. This means that once a DID is created, it cannot be altered or deleted, making it much more difficult for hackers to tamper with the identity. Additionally, DIDs can also use other forms of authentication such as biometric or multi-factor authentication, which makes it harder for hackers to gain unauthorized access to an individual's account.

Inefficiency and lack of interoperability

Inefficiency and lack of interoperability are major problems with the current state of digital identity management. Centralized systems often require individuals to go through a lengthy and complex verification process to create an identity. This can be a major inconvenience for individuals and can also create delays in accessing services and resources.

Additionally, centralized systems are often not compatible with each other. This means that individuals may have to create multiple identities and go through different verification processes to access different services and resources. This can be a major hassle for individuals and can also create confusion and errors.

Furthermore, centralized systems can also limit the scalability and adoption of digital identities. It can be difficult for new service providers to integrate with existing centralized systems and for individuals to use their identities across different platforms.

Decentralized Identifiers (DIDs) provide a solution to the problem of inefficiency and lack of interoperability. DIDs are interoperable, meaning they can be used across different systems and platforms. This allows individuals to use their DID to authenticate themselves and access different services and resources, without the need for different identities or logins for each service. Additionally, DIDs can also be created and managed in a more efficient way, as they are not dependent on centralized authorities.

III. How decentralised identifiers solve these problems

Decentralized and self-sovereign identity management

Decentralized and self-sovereign identity management is an alternative approach to digital identity management that is based on decentralized and self-sovereign principles.

Decentralized identity management refers to the use of decentralized technology, such as blockchain or linked data, to create a tamper-proof and immutable record of an individual's identity. This allows individuals to have full control over their own identities and personal data, and eliminates the need for centralized authorities to manage and verify identities.

Self-sovereign identity management refers to the idea that individuals should have complete control over their own digital identities and personal data. This means that individuals have the power to create, manage, and share their own digital identities, without relying on centralized authorities. This gives individuals more control over their personal data and ensures that their personal information is kept private and secure.

Decentralized and self-sovereign identity management is an important aspect of Decentralized Identifiers (DIDs), as it allows individuals to take back control over their personal data, and eliminates the need for centralized authorities to manage and verify identities.

Immutable and tamper-proof record of identity

An immutable and tamper-proof record of identity is a key feature of decentralized identity management systems such as Decentralized Identifiers (DIDs). It refers to the ability of these systems to create a record of identity that cannot be altered or deleted once it is created.

In traditional centralized identity systems, personal information is stored in a central location, which makes it vulnerable to tampering and hacking. This means that an attacker could alter or delete personal information, potentially creating serious consequences for the individual, such as identity theft or financial loss.

An immutable and tamper-proof record of identity is achieved by using decentralized technology such as blockchain or linked data. These technologies provide a mechanism for creating a permanent and unchangeable record of an individual's identity. The record is stored across multiple nodes, making it almost impossible for an attacker to tamper with or delete it.

In addition, decentralized systems use cryptographic methods to ensure the authenticity of the identity, such as digital signature, that ensures that the record is signed by the legitimate owner of the identity.

Immutable and tamper-proof record of identity ensures that an individual's personal information is kept private and secure, and that the identity cannot be tampered with or deleted. This is an essential aspect of ensuring the security and reliability of digital identity management systems.

Interoperability and compatibility with other systems

Interoperability and compatibility with other systems is an essential aspect of decentralized identity management systems such as Decentralized Identifiers (DIDs). It refers to the ability of these systems to work seamlessly with other systems and platforms, allowing individuals to use their digital identities across different services and resources.

In traditional centralized identity systems, individuals often have to create multiple identities and go through different verification processes to access different services and resources. This can be a major inconvenience and can also create confusion and errors.

Decentralized Identifiers (DIDs) are interoperable, meaning they can be used across different systems and platforms. This allows individuals to use their DID to authenticate themselves and access different services and resources, without the need for different identities or logins for each service. Additionally, DIDs can also be linked to other forms of digital identity, such as Public Key Infrastructure (PKI) credentials, making it easier to authenticate oneself across different platforms.

Furthermore, DIDs can also be implemented using different technologies such as blockchain or linked data, and can be linked to different blockchain networks, allowing for interoperability across different networks.

IV. Use cases for decentralised identifiers

Digital identity verification

Secure online transactions

Access control for online resources

Decentralized identity verification for IoT devices

V. Implementations of decentralised identifiers

Blockchain-based DIDs (e.g. Ethereum, Bitcoin)

Linked Data-based DIDs (e.g. W3C DIDs)

Comparison of different implementations and their advantages and disadvantages

VI. Current challenges and future developments

Scalability and adoption challenges
Interoperability with existing systems
Future developments in decentralized identity management

VII. Conclusion

Summary of the benefits and potential of decentralized identifiers
Call to action for further exploration and adoption of this technology.

A decentralized identifier (DID) is a unique and verifiable digital identifier that is created and stored on a decentralized network, rather than being controlled by a centralized authority.

A DID is a simple text string consisting of three parts: 1) the did URI scheme identifier, 2) the identifier for the DID method, and 3) the DID method-specific identifier.

A diagram showing the parts of a DID. The left-most letters spell 'did' in blue,
are enclosed in a horizontal bracket from above and a label that reads 'scheme'
above the bracket. A gray colon follows the 'did' letters. The middle letters
spell 'example' in magenta, are enclosed in a horizontal bracket from below and
a label that reads 'DID Method' below the bracket. A gray colon follows the
DID Method. Finally, the letters at the end read '123456789abcdefghi' in
green, are enclosed in a horizontal bracket from below and a label that
reads 'DID Method Specific String' below the bracket.

Architecture Overview

DIDs and DID documents are recorded on a Verifiable Data Registry; DIDs resolve
to DID documents; DIDs refer to DID subjects; a DID controller controls a DID
document; DID URLs contains a DID; DID URLs dereferenced to DID document
fragments or external resources.

DIDs and DID URLsA Decentralized Identifier, or DID, is a URI composed of three parts: the scheme did:, a method identifier, and a unique, method-specific identifier specified by the DID method. DIDs are resolvable to DID documents. A DID URL extends the syntax of a basic DID to incorporate other standard URI components such as path, query, and fragment in order to locate a particular resource—for example, a cryptographic public key inside a DID document, or a resource external to the DID document.

DID SubjectsThe subject of a DID is, by definition, the entity identified by the DID. The DID subject might also be the DID controller. Anything can be the subject of a DID: person, group, organization, thing, or concept.

DID ControllersThe controller of a DID is the entity (person, organization, or autonomous software) that has the capability—as defined by a DID method—to make changes to a DID document. This capability is typically asserted by the control of a set of cryptographic keys used by software acting on behalf of the controller, though it might also be asserted via other mechanisms. Note that a DID might have more than one controller, and the DID subject can be the DID controller or one of them.

Verifiable data registries In order to be resolvable to DID documents, DIDs are typically recorded on an underlying system or network of some kind. Regardless of the specific technology used, any such system that supports recording DIDs and returning data necessary to produce DID documents is called a verifiable data registry. Examples include distributed ledgers, decentralized file systems, databases of any kind, peer-to-peer networks, and other forms of trusted data storage.

DID documents contain information associated with a DID. They typically express verification methods, such as cryptographic public keys, and services relevant to interactions with the DID subject. A DID document can be serialized to a byte stream.

DID methods are the mechanism by which a particular type of DID and its associated DID document are created, resolved, updated, and deactivated.

DID resolvers and DID resolutionA DID resolver is a system component that takes a DID as input and produces a conforming DID document as output. This process is called DID resolution. The steps for resolving a specific type of DID are defined by the relevant DID method specification.

DID URL dereferencers and DID URL dereferencing A DID URL dereferencer is a system component that takes a DID URL as an input and produces a resource as output. This process is called DID URL dereferencing.

DIDs allow for greater privacy and control over personal data, as individuals are able to create and manage their own identifiers without the need for a centralized entity to verify their identity. This eliminates the reliance on a third party to authenticate and authorize access to one's personal information.

DIDs are based on blockchain technology, which allows them to be stored on a decentralized, distributed ledger. This ensures that they are tamper-proof and cannot be altered or deleted by any single entity. Additionally, DIDs use digital signatures to confirm the authenticity of the identity being represented, and can be linked to other data and information about the individual, such as public keys for encryption.

One of the main advantages of DIDs is that they can be used to create a decentralized system for authentication and authorization. This allows individuals to prove their identity and access resources and services without having to rely on a centralized authority. This can also be beneficial in areas where traditional forms of identification are not easily accessible, such as developing countries or areas affected by conflict or displacement.

DIDs can also be used in various areas such as banking, healthcare, education, and many others. It can be used to give access to various services or sensitive information. This would enable secure sharing of personal information, with the user having control of who has access to it. The transparency and trustworthiness of the decentralized network ensures that the personal data is not tampered with or misused.

In summary, Decentralized Identifiers are an innovative and secure solution for creating digital identities. By being based on blockchain technology and decentralized networks, they provide a means of creating unique and verifiable identities that are under the control of the individual, without the need for centralized authorities. This offers a wide range of potential use cases and can benefit individuals, organizations, and society as a whole.