According to Sovrin, Self-sovereign identity (SSI) is a term used to describe the digital movement that recognizes an individual should own and control their identity without the intervening administrative authorities
SSI allows people to interact in the digital world with the same freedom and capacity for trust as they do in the offline world.
An Era of Identities
“What the Fourth Industrial Revolution will lead to is a fusion of our physical, our digital, and our biological identities” — Klaus Schwab, WEF
Decentralized identity has revolutionary benefits for businesses, too. They can eliminate burdensome identity verification and provide seamless and secure online experiences for users. And by committing to protecting user information, organizations can build trust and enjoy better relationships with customers.
Why Is Decentralized Identity Important?
1. Easier Authentication
Decentralized identity can eliminate passwords and annoying multi-factor authentication protocols. With password-less authentication, using online services becomes easier and faster since you don’t need to enter long passwords.
Organizations can quickly verify user identities without forcing them to undergo burdensome KYC processes. Loan applications, government registrations, website sign-ups—all of these would happen faster because service providers can verify your identity via third-party utilities.
2. Better Data Safety
As explained earlier, many organizations require new users to submit identity information. That wouldn't be a problem, except that companies are provably sloppy at safeguarding user data. Modern data centers are honeypots for hackers, and data breaches have led to massive losses for businesses and consumers.
A decentralized identity framework removes the need for centralized storage of user information. This is especially important when dealing with personally identifiable information (PII), such as your medical history or credit card information. Sensitive ID information would be safely stored in your digital wallet, allowing you to share it when necessary.
Decentralized identity systems will also reduce cases of identity theft. Your personal information and credentials aren’t sitting in a data silo for a hacker to steal. Neither do you need passwords for website access, so phishing attacks will inevitably fail.
3. Personal Ownership and Control of Data
Decentralized identity is described as self-sovereign identity because it puts control of personal data in the hands of individuals. Your private information doesn’t become the property of third parties, to be stored in centralized databases.
In a decentralized identity system, you decide what information is privy to third parties. Zero-knowledge proofs further protect your privacy by eliminating the need to reveal sensitive information. For example, you could prove your age without showing your address or nationality to a service provider.
Since Verifiable Credentials are digital, your identity becomes portable. You don’t need to carry around a Driver’s License or an immunization passport to prove your vaccination status.
VCs can be independently verified, so you’ll never have to rely on an issuer to verify your claims. At all times, your personal information and credentials remain under your control.
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