The 4P's of Decentralized Identity
November 4, 2022
Much of the focus surrounding Decentralized Identity and Verifiable Credentials technology focuses on the way in which distributed ledgers enable trust between parties online.
Decentralized identity is an open-standards based identity framework that uses digital identifiers and verifiable credentials that are self-owned, independent, and enable trusted data exchange.
Verifiable Credentials are identity claims, or attestations, like proof of a workplace or student ID, official memberships, or any other information from any trusted issuer. People access and control their verifiable credentials using a secure, encrypted digital wallet stored locally on a smart device.
Essentially, these technologies make it possible to establish Digital Trust at a massive scale which is critical to enabling new forms of commerce to take place online in a secure manner. It is also an opportunity massively upgrade privacy protection of every individual. This is the core reason why Decentralized Identity will make the next era of the internet a simpler, safer, and more secure place for everyone. By everyone we mean individual end users that may be customers, citizens, or employees but also the private and public-sector organizations that serve these individuals with digital experiences.
When the internet is safer and more trustworthy, more things can be done online. For example, a bank might be able to trust digital credentials (i.e. Drivers License, Passport) in such a way that opening a bank account will not require a visit to the local branch where these two pieces of physical photo ID would typically be verified and photocopied. This example also highlights how an increase in Digital Trust enables a more convenient experience for the end user. Moving an offline activity to an online activity is just the tip of the iceberg when it comes to convenience.
There are limitless opportunities to streamline experiences at the same time as we increase digital trust. Decentralized Identity can do much more than just add digital trust. Decentralized Identity makes identity digitally native which creates other new advantages that improve user experience by making identity more frictionless, portable, machine-readable, and re-useable.
Typically, most digital interactions that require varying levels of digital trust can be broadly divided into four end user motions which are Pay, Prove, Pass and Prefer.
Pay – Banks, credit card companies, merchants and consumers all benefit from an increase in digital trust as it relates to online payments. Decentralized Identity technologies can help to reduce the risk of fraudulent transactions and identity theft by helping to ensure that only the authorized consumer is able to use their own payment methods.
Prove – There are many ways in which people and organizations benefit from the ability for people to prove something about their identity in a simple and easy manner. For example, the ability to digitally verify skills and certifications in a hospital can help a new nurse get to work faster and potentially save lives. A recent University graduate seeking a new job could streamline the proof of his or her education credentials without having to call the registrar’s office, and then picking up a physical copy and telling the employer to call the University to confirm. A Verifiable Credential, including proof of education, could save time and money for the graduate, the university, and the employer.
Pass – Often, tickets or passes must be trusted as well. For example, airport security, airlines, and passengers all benefit from digital boarding passes that streamline the check-in process, reduce wait times, and give passengers more choice. Imagine the convenience of a digitally native passport and boarding pass being presented with a single tap of your phone at the various checkpoints throughout the airport. This would also make our borders more secure. After arriving at your destination, you might check into your hotel where tying a digital identity can further increase convenience. For example, you might prefer a firm pillow or possess a ticket for a golf excursion, which brings us to our fourth motion.
Prefer – There are limitless ways that secure and interoperable preferences tied to a digital identity can be used to make the internet a simpler, safer, and more convenient environment for everyone. As the line between online and offline worlds continues to blur, terms like ‘Phygital’ remind us that our identity data being portable can help those preferences be used at a physical store, an online store, in the ‘metaverse’ or anywhere in the world to which we travel. Today, whenever you visit a hotel, you check-in, go up to your room, check the pillow, call the front desk agent, who calls the housekeeper, who then brings you a new pillow at some point, hopefully before you want to go to sleep. If this preference was attached to a secure digital identity, then the process could be streamlined such that at the time you book your hotel room, the housekeeper is made aware of your pillow preference and places the correct pillow in your room before you arrive.
Today, user data associated with preferences is often used for the purpose of personalizing digital experiences for online advertising or when shopping online. This is generally done using Cookies which are not particularly portable, secure and have very poor user control. While this class of data has generally required less Digital Trust it has, frankly, been abused as a result. The reason for this abuse is that unlike banking or airport security, online shopping and browsing has remained largely unregulated. The General Data Protection Regulation (GDPR) legislation passed in the European Union was a good first step toward mandating the protection of all user data and beginning to limit the potential for abuse and putting data at risk of a breach. All that being said individuals and businesses enjoy the benefits of preference-based personalization online and as a result, it is important that it continue, and that it enters the Phygital world in such a way that protection of this information also continues to evolve.
Decentralized Identity can help protect privacy by giving users ownership and control of their own data in a manner that gives them explicit consent and greatly improved control over who can access what information about them. Protecting this type of information also becomes more important in the real world when we consider how physical location can introduce new attack vectors. More importantly for the Prefer motion, Decentralized Identity offers a frictionless, portable, machine-readable, re-useable and generally smarter approach to personalization based on customer preferences that works in a convenient manner anywhere.
If the objective of your organization is to offer the best digital experience to customers, citizens, or your workforce then you must recognize the importance of considering how to blend the Pay, Prove, Pass and Prefer motions into user experiences that apply the full set of advantages that Decentralized Identity can offer to streamlining every moment of the user journeys you offer.