Self-Sovereign Identity (SSI) as building block of the Crypto Economy
The term Self-Soverein Identity (SSI) will be omnipresent in the coming years. The entire development taking place in this area lays the foundation for our vision of a Crypto Economy which will transform the way business is done in many industries.
By implementing SSI solutions we will be able to:
- dramatically reduce (governmental) bureaucracy by providing efficient and frictionless processes
- exchange and verify (personal) data in a safe way and thus avoid the growing amount of data breaches
- eliminate fraud
- get rid of centralized logins using different authentication providers like Google, Facebook, Apple, Twitter and many more (why is that important?)
In the future, any type of certificate, attestation or authorization can be issued and verified digitally in a simple yet secure manner.
Imagine that every card we are holding in our personal wallet right now can be issued digitally and instead of having it physically in our pocket we will have it stored on our smartphone. If a service or a business needs to verify our age or any other personal or financial data we will be able to prove this within seconds by just pushing a button on our smartphone. The beauty here is that we will be able to do this (almost) completely independent from specific vendors and technologies. This is all possible thanks to Verifiable Credentials (VCs).
Sounds too good to be true? We encourage you to make yourself familiar with this topic and get in touch with us if you are interested! Here some good reading material to start with:
- Where to begin? (Decentralized Identity Foundation Blog)
- SSI101: An Introductory Course (Spherity Blog)
- Ultimate Beginners Guide (Tykn.tech)
For an identity to be self-sovereign, at least following statements must be fulfilled:
- Each individual owns their own data and does NOT rely on a central party to prove claims about themself.
- Each individual has full control on what personal information they are sharing and with whom.
- The SSI must be interoperable. Each individual can use their identity across multiple platforms and locations.
A Self-Sovereign Identity is portable, private and secure.
Trust over IP and the role of blockchain
On 5 May 2020, the Linux Foundation announced a new addition to its roster of global open source ecosystem projects: the Trust over IP Foundation. The mission of this new Foundation is to simplify and standardize how trust is established online so that everyone can feel safe, secure, and private in all of our digital interactions — whether between individuals, businesses, governments, or any “thing” on the Internet of Things.
Layer 1 can be implemented on any distributed system and doesn’t necessarily have to be a blockchain or a distributed ledger. But of course the high availability and cryptographic verifiability of blockchains enable strong roots of trust and won’t serve as single point of failure.
The most interesting work is currently happening on Layer 2 and Layer 3. If you want to dive deeper into that topic you should get in touch with the different working groups of the Digital Identity Foundation and take a closer look at Hyperledger Aries. It is for example possible to prove facts that are written in a VC without having to reveal all the information the VC contains. This is called selective disclosure and can be achieved by making use of Zero-Knowledge Proofs (ZKP).
Solution approaches and initiatives
In Germany alone we have many players working on exploring and implementing SSI solutions. The German ministry for economic affairs and energy (BMWi) is currently running an innovation competition called Secure Digital Identities where many different smaller and bigger companies collaborate in consortiums to transform the way we will manage our digital identity in the future.
For the project Mobility Blockchain Platform (MBP) of the Daimler Mobility AG Blockchain Factory, which we have accompanied since the beginning, SSI plays also a very important role. We worked together with companies like evan.network, Blockchain Helix, Spherity and Ontology to provide users access to services of the MBP with an SSI based solution.
Status quo & outlook
From the perspective of a company that builds and makes use of SSI based solutions we can certainly say that SSI is here to stay and that we can already build upon a set of technologies and frameworks to make our vision of a Crypto Economy reality.
Of course there are some technical and practical challenges like communication, interoperability and key management (including key recovery) which is being heavily worked on. But we are confident that it is just a matter of time until we can hide this complexity and make it as easy as possible for businesses and individuals to make use of SSI solutions.
The biggest challenge right now is to explain the value that SSI represents to businesses and people.
In the book “Self-Sovereign Identity Decentralized Digital Identity and Verifiable Credentials”, which isn’t finished yet and will approximately be published in summer 2021, the authors have written a whole chapter to guide people how to explain SSI to businesses!
51nodes GmbH based in Stuttgart is a provider of Crypto Economy solutions.
51nodes supports companies and other organizations in realizing their blockchain projects. 51nodes offers technical consulting and implementation with a focus on smart contracts, decentralized apps (dApps), integration of blockchain with industry applications, and tokenization of assets.