Self-sovereign identity (SSI) has seen a rapid adoption within finance, interestingly both centralised (CeFi) and decentralised (DeFi). In the context of DeFi, it is often referred to as its enabler. Beyond finance, its application has been growing too — spanning travel, e-commerce, supply chains, crypto, and other sectors. What remains a stumbling block for many is understanding what SSI is and what is so magical about it that it can fill in so many cracks across industries?
In this blog, this is exactly what we’re looking to address. Now, imagine, you need to open a bank account. Instead of bringing a ton of paper documents, you can simply show your digital identity (ID) to prove your identity in a matter of seconds, and the bank accepts it. Sounds like a dream? Nope, self-sovereign identity (SSI) makes it possible already. To understand how to let’s delve into the concepts of identity and credentials first.
Identity and credentials
Identity literally means the quality of being identical. To what? To yourself. According to the Mirriam-Webster dictionary, identity is: “the condition of being the same with something described”. In an everyday sense, a credential is an attestation, evidence or proof of qualification, competence or authority issued to an entity, either individual or person, by a third party with relevant authority or assumed competence to do so. This may be evidence of authority, status, rights, entitlement to privileges, or the like, usually in a written form. Essentially credentials are a means to verify identity. Historically we have relied on public issuing bodies to verify our identities — i.e. passports, driving licences, birth certificates, etc. These credentials go on throughout our lives, being issued to us or requested by us at times when we need them. We provide them to others regularly, without ever wondering what happens to them, where they now sit, and how long they’ll be retained.
Why the current model of identity doesn’t work
Digital trust is currently predicated on constant check-ups. To prove an attribute or claim, a third party is needed to certify or verify that…