35 Use Cases of Decentralized Digital Identities that Will Make Your Life Easier
Digital identities will become the next linchpin of economic growth in developed economies and will penetrate even faster in emergent nations, so much so that McKinsey estimated that a full digital identity coverage “could unlock economic value equivalent to 3 to 13 percent of GDP in 2030.”
Traditionally, governments have been the main and most trusted providers of identity proofs, all in physical format. National ID cards, passports, and driver’s licenses are such examples. Around 2005, some nations started digital identity programs with the main purpose of providing online access to government services, and today over 80% of countries with national ID schemes are running some sort of eID program.
In the last couple of years, a new technological approach that inverts the fundamentals of authentication management has increased in popularity: decentralized digital identities (also known as self-sovereign identity or blockchain-based digital identity). Read my previous post to learn more about how they work.
The innovation lies in the capability to obtain digital credentials from different issuers worldwide — beyond just governments — in a standard format that everyone recognizes and trusts, so that a comprehensive identity is built and controlled by the user to serve any authentication purpose, instead of hundreds of siloed and scattered identities, each servicing a specific purpose. In addition, decentralized identity providers do not store and manage identity information in a central database. Instead, users receive it directly from issuers, store it in their phones, and choose whom they share it with, thus minimizing — if not eliminating — the risk of information tampering and massive hacking attacks.
Thus, there is a growing consensus that decentralized digital identities will extend globally and will soon become the new authentication standard. The proof of this is that many countries are already deploying decentralized digital identity projects leveraging existing technology providers and W3C standards or running their own implementation efforts. And this exponentially growing interest is due to the potential to move the GDP needle and improve such a wide range of industries in a meaningful way.
In this post, we wanted to explain this potential by listing all relevant use cases in which a user could take advantage of their decentralized digital identity. Below you will find a graphical representation of 35 relevant use cases across 10 different industries.
The idea of using one single identity to access any and all of these services sounds exciting, particularly because its design ensures privacy and security, and because there is no giant company managing and controlling your data -just you.
In order for this to happen, we need to create public private partnerships where opportunities are identified and tested. If our goal is to advance our economies, compete on innovation, and improve the lives of everyone, then digital identities should be a top priority for governments and regulatory bodies. Will this be easy to achieve? Hell no. Will it be worth it? Absolutely. One thing is clear: first countries to adopt this technology will achieve efficiency levels and new business opportunities beyond imagination.
Disclaimer: this does not intend to be a mutually exclusive or collectively exhaustive list. If you can think of any additional authentication use case worth adding, please comment on this post, and we will update the diagram accordingly.
Quick note about us: at GATACA, we are building decentralized identity technology with a unique approach that enables global adoption via integration simplicity, a focus on reducing KYC costs for businesses, and a radically improved onboarding experience for users.
Side note: I first wrote this article 3 years ago. Since then, a lot has happened in the SSI space and governments indeed consider digital identities a top priority, particularly in Europe. A few follow up readings:
- An updated version of this post adding small descriptions of popular use cases for different industries.
- An intro to SSI
- An intro to Verifiable Credentials and DIDs
- An analysis of how SSI will impact on DeFi
- An overview of eIDASv2, the new European regulation on digital identities
- An analysis of the reference framework for the European ID Wallet
- An analysis of selective disclosure methods, including ZKP
