A Blockchain Identity Solution Set to Change the Internet

Microsoft, IBM, Accenture and more than 70 other technology companies are working on a blockchain identity project set refurbish the Internet for the 21st century.

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Blockchain Identity Solutions
Image by Gerd Altmann from Pixabay

The way people, devices, applications, websites and even email addresses are identified on the Internet is on the verge of being disrupted in a significant way.

You could say the biggest ever change to the architecture of the World Wide Web is about to happen, and it is all thanks to Bitcoin.

In May 2017 Decentralized Identity Foundation (DIF), a consortium to explore ways of using blockchain for identity management on the Internet was founded. The membership has since grown to over 70 technology companies and startups. Some of the most active members include Microsoft, IBM, Accenture, Hyperledger and MasterCard.

For the last two years, a DIF technical team has been working on a protocol dubbed Sidetree, a second layer scaling solution on the Bitcoin network. When implemented, this protocol will enable Internet users to create decentralized identifiers (DID) on the Bitcoin blockchain with little technical hindrance or transaction throughput limitations.

This is turning out to be the most ambitious of the blockchain identity projects. Indeed, several startups that have been working on blockchain identity solutions of their own such as Civic, Identos and DIID are members of the consortium.

On May 13, 2019, the team made a major announcement concerning the development of the protocol. Stakeholders, as well as other interested parties, now have access to the early preview of the Identity Overlay Network (ION), a critical protocol interface between DID and the Bitcoin network.

“We’re announcing an early preview of a Sidetree-based DID network, called ION (Identity Overlay Network) which runs atop the Bitcoin blockchain ……. This approach greatly improves the throughput of DID systems to achieve tens-of-thousands of operations per second.”

But why is this a significant development?

At the moment, almost all identity management systems on the Internet, such as domain name and email address registries, are centralized. This goes against the spirit of Internet decentralization.

Identities are assigned, stored and updated on servers and data centers owned and controlled by mostly private companies and organizations. When you create a website, its ID is registered and accessed on domain nameserver, a database that a centralized third party maintains.

These entities, while striving to do a great job, are major single points of weaknesses.

The risk of massive data theft always exists as all it often takes to get control of the identity details of millions of users is to compromise single access points. With centralized data points, it is easier to carry out targeted sabotage attacks.

Indeed, the current architecture is designed in a way that the security of the system depends on being successful at blocking bad actors from accessing it.

What are the advantages of using blockchain for identity management?

Meanwhile, using blockchain for identity what Decentralized Identity Foundation is offering are identities that are not only secure, verifiable and censorship-resistant but also self-sovereign. What that means is that the identity can stand by itself with no need of it being referenced on a centralized registry, but even more, the user can carry it across platforms without the need to get permission from anyone.

The technology offers true ownership of identity on the Internet. Through public-private key cryptography, users have full control and can decide who to share details of their identities with.

The technology offers true ownership of identity on the Internet. Through public-private key cryptography, users have full control and can decide who to share details of their identities with.

In addition to a user not needing permission to create, update, share or move an identity, no one has the power to take it away from them. The current identity systems, it is possible to arbitrary remove users from registries, and that opens a window for censorship if the authorities in charge feel compelled to.

The security of each identity on the bitcoin network supported identity management systems is achieved through high-level cryptography. While it is possible to compromise access to a particular identity primarily through phishing, an attacker has to attempt a single identity at a time. There are no admin credentials one can steal to get access to multiple accounts or massive user data like it is the case with centralized systems.   

The Bitcoin network will provide the decentralized identity system with a ledger on which to create and secure user identity. It will also make the data related to identities immutable through the mining process or timestamping.

This is a powerful feature as even if users have full control of their identities, they are not able to go back in history to arbitrary make changes to suit particular current contexts. In other words, identity on the blockchain becomes verifiable even when it is the owner who controls its accessibility.

What this means for the Bitcoin network

With the decentralized identifiers system on top of its network, the value of Bitcoin is going to increase significantly, and I mean more than in terms of the price of its native coin (bitcoins) at the marketplace. The decentralized identity system is going to make Bitcoin even more powerful and useful.

In the previous post, we looked at how Bitcoin gets its value. Perhaps the most important takeaway from it is that the value of anything is considered to come from its usefulness in satisfying our needs.

And that is according to Carl Menger, who was a professor of political economy at the University of Vienna in the late 19th century and the founder of the Austrian School of economics.

If you haven’t read the post, take a moment to go through it.

After its launch, for a while, the general understanding was that Bitcoin’s best application is online money to be used in the place of fiat currencies like the US dollar. In particular, the kind that those who have something to hide can use to escape surveillance.

It turns out Bitcoin and the technology that powers it can do more than a digital currency for the dark web. Every sector you look at right now there is a startup building a robust and needed solution using the technology behind Bitcoin.

Why the Bitcoin blockchain?

With that said, there has been another misconception. And that is while the blockchain technology that Bitcoin introduced to the world can be applied in multiple use-cases, Bitcoin itself is rigid, and little innovation can be done on it to support more applications.

The Bitcoin network is now considered the world’s most powerful computer. In fact, it is more powerful than the world’s top 500 supercomputers.

The most cited weakness is its low transaction throughput. It is the reason the likes of Ethereum, NEO and EOS blockchains came into being. They were meant to overcome the shortcomings of the Bitcoin blockchain and make more decentralized applications possible.

However, Bitcoin remains the most secure blockchain owing to the amount of hashing (computer) power its network provides. The Bitcoin network is now considered the world’s most powerful computer. In fact, it is more powerful than the world’s top 500 supercomputers.

It is probably with this particular reason that the Decentralized Identity Foundation choose to use it instead of the others or to build a completely new one. The Identity Overlay Network that is out for early preview is meant to overcome the challenges of capacity and interoperability of the Bitcoin network.  

 

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