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What Is Decentralized Identity?

Decentralized Identity empowers individuals by giving them full control over their digital identities, removing reliance on centralized authorities such as companies or social media platforms.

Also known as Self-Sovereign Identity (SSI), decentralized identity is both guided by core principles and built on technical standards designed to put you in charge of your digital life. Together, these principles and standards ensure your identity is secure, private, and managed by you.

Principles of Decentralized Identity​

The foundation of decentralized identity lies in its core principles, which emphasize individual empowerment and privacy:

  • Control: You have control over your digital identities without unnecessary reliance on external authorities.
  • Portability: Easily transfer your identity data and credentials between different services and platforms.
  • Interoperability: Your digital identity is compatible across various systems, ensuring seamless interactions.
  • Consent: Share your personal information only with your permission.
  • Minimal Disclosure: Provide only the minimum required information for any interaction, protecting your privacy.

Read Christopher Allen's Ten Principles of Self-Sovereign Identity, for more context on the principles behind this approach.

Key Technical Concepts & Standards​

To put these principles into action, decentralized identity uses key technical standards and concepts:

  1. Decentralized Identifiers (DIDs): These are unique digital identifiers that you create and own independently of any organization or authority. DIDs allow you to prove ownership and control of your identity across different platforms without relying on centralized entities.
  2. Verifiable Credentials (VCs): VCs are cryptographically secure digital proofs of your credentials, skills, and achievements. They enable you to share specific information about yourself with others in a way that is secure and verifiable, while also allowing you to reveal only what is necessary, protecting your privacy.
  3. Agentic Storage: Agentic storage refers to decentralized storage solutions based on open standards — such as digital wallets, Decentralized Web Nodes (DWNs), or data hubs — that put you in control of your data. With agentic storage, you decide what information is stored, where it's stored, and who has access to it, eliminating reliance on third-party data holders. This means your personal data is managed securely by you, enhancing privacy and reducing the risk of unauthorized access.
  4. Standards-Based Communication & Exchange Protocols: Open communication protocols like DIDComm define how wallets, service providers, and other entities securely communicate and exchange information within the decentralized identity ecosystem. These standards ensure interoperability and seamless, secure, trustworthy interactions across different platforms and services.

The Impact of Decentralized Identity​

Decentralized identity ensures:

  • Empowerment: You gain control over your digital identity and personal data.
  • Privacy: You share only what’s necessary, with no excess data exposed.
  • Security: Reduce risks of identity theft and data breaches.
  • Seamless Interactions: Enjoy smoother experiences across different platforms and services.

This places control back in the hands of individuals, ensuring secure and private online interactions.

How It Works​

With decentralized identity, you create and control your own identifiers (DIDs), unlike traditional systems where service providers assign identifiers to you. These DIDs allow you to interact directly with services.

When combined with Verifiable Credentials (VCs), DIDs allow you to prove key details—such as your age or qualifications—without revealing unnecessary data, ensuring privacy and security. The Key Components section covers DIDs, VCs, and other elements critical to understanding decentralized identity in practice.

Advantages of Decentralized Identity​

  • Self-Sovereign Identity (SSI): With DIDs and VCs, users control their own data.
  • Cross-Platform Reuse: DIDs and VCs follow open standards, enabling use across different platforms, ensuring smooth interactions without being tied to a single provider.
  • Streamlined Experience: Use your credentials anywhere without repeatedly entering the same information, saving time and effort.
  • Confidence: Mutual authentication ensures that both parties in a communication know who they are interacting with, reducing phishing and fraud risks.
  • Portability: Your data and reputation follow you across services and devices, ensuring your identity remains intact and verifiable wherever you go.
  • Trust and Verification: Verifiable credentials allow for trust without intermediaries, fostering direct user-to-service interactions.

Decentralized identity ensures that individuals can verify, communicate, and engage securely across contexts, offering a future where identity is truly in your control.