Whether it’s a social media username, a bank account number, or a phone number, everyone has unique identifiers to engage with society. Our identifiers follow us everywhere, and it is hard to survive in this complex modern world without them.
The emergence of blockchain technology has enabled us to create advanced identifiers that deliver enhanced security and privacy without the need for a central authority. This article will be a beginner-friendly guide to these decentralized identifiers.
We will check how these identifiers function by detailing the process in simple terms. Additionally, we will cite prominent DID technologies and also provide a guide to setting up your own DID. Let’s begin.
What is a Decentralized Identifier?
In an encoding system, an identifier is a unique word, letter, or symbol that identifies an object. As the name suggests, decentralized identifiers (DIDs) allow individuals and institutions to create and verify identity without reliance on a centralized authority. People, organizations, assets, and even bots can have their DIDs to engage with online and offline networks.
The traditional unique web2 identifiers like email IDs and passwords were always vulnerable to hacks, especially from SQL injection, XSS attacks, and SSR forgery, mainly used for identity thefts and data forgery. DIDs solve these issues to an extent through the enhancement of user control.
How Do the Decentralized Identifiers Work?
Usually, blockchain-based DIDs work by the principles of self-sovereign identity (SSI), a system that facilitates the user’s management of data, where the user can choose who should have access to it.
When a subject creates its identifier, it is converted into a unique document that cannot be altered by others. Then it is shared among other computers of the blockchain which acts as a verifiable data registry.
Apart from the individual, issuers like governments, universities, or social media communities can issue unique identifiers to the user as a blockchain document. Users can present their identifiers to their clients such as an employer or a bank to verify.
Apart from the issuance and verification by external parties, these DIDs are 100% self-managed where it verifies an identity within seconds without the intervention of a third party. Also, the user doesn’t need a secret password for the identifier. While centralized identifiers have authority as a middle person, DIDs don’t need any Google or Facebook to store your data.
The Best Use Cases Decentralized Identifiers
There are various serious use cases for DIDs, and the prominent one is document verification. Countries such as the U.S., U.K., and India are using DIDs for document verification in universities. Here is a list of some of the major use cases:
- It can be used to verify driving licenses by the authority.
- A company can use DIDs to verify the documents submitted by the employee.
- Law enforcement agencies can use DIDs to find those who are not the real culprits.
- Governments and companies can use DIDs tissue ID cards.
How to Set Up a DID?
The World Wide Web Consortium (W3C) keeps a record of DIDs where you can view the unique identifiers. Also, you can submit your own DID which will become a new standard. To do this you have to fund your crypto wallet to cover the storage price. Then you can input the content in your document and create a new DID for it.
The document will not be stored in the blockchain. It only verifies that the document is authentic by accessing the digital fingerprint. Users can create the fingerprint through a process called anchoring.
Final Thoughts: The Future of DIDs
Decentralized Identifiers will emerge as the primary candidates for verification processes shortly unless a better system arrives. It can prevent identity thefts, reduce time and cost, and enhance the overall efficiency of verification.
Beyond the government and other public institutions that use DIDs, the usage of private DIDs between two parties will increase exponentially in the coming years. However, the traditional identifiers will most likely co-exist instead of extinction.
