Surveys show that people often use the identity management systems they
don’t want to use. They don’t have full control over their information, have no
way to know what is shared with other parties and are dependent on trusted
parties when logging in to websites.
The Dutch IRMA project (short for: I Reveal My Attributes) uses strong
cryptography and Attribute Based Credentials to create a Decentalized Identity
Attributes like ”I’m a student” can be digitally signed by
your educational institution and loaded on a smartcard. This could be used to
prove your enrollment when a store grants educational discounts on software.
Because of legislation, compliance and accountability it might not be possible
for parties like financial institutions to participate in Decentalized Identity
Management System where the origin of such claims can not be traced back,
since they are required to monitor their data exchanges and be able to validate
the origin of claims made.
A well-designed Decentalized Identity Management System is expected to be
beneficial for organizations, removing the need to implement one-to-one proprietary integrations (silo’s) between back-end systems and reducing dependencies on centralized systems.
Furthermore, it offers organizations with thorough and regulated identity establishment processes (”Know Your Customer”) like banks, which are relatively expensive; to create a business case out of sharing their verified attributes with entities like mortgage lenders and insurance companies. Because of the sensitivity of the data, this requires high requirements on privacy and confidentiality.
This could be solved by exchanging claims (answers to questions, like ”Are
you 18?”) instead of sharing the raw data. The claim that you are older than
18 is a lot less sensitive than your birth date. Instead of a fully decentralized
architecture this allows for a more distributed landscape. The information required to make a claim remains at the issuer, but the claim itself is available on the distributed ledger of claims.
Blockchain technology could function as the foundation of such system being
a network for decentralized trust and exchange. Because everyone can participate as issuer or acquirer (and both), there are low adoption barriers and low costs.
This allows new business opportunities for governments, banks and other authorities and more transparency and control for end-users, working towards a self-sovereign identity platform based on blockchain technology.