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Benefits of Decentralized identity

Some weeks ago, Jack Dorsey, the ex-CEO of Twitter, announced the web 5.0 project following his criticism of web 3.0. Dorsey pointed out the existing limitations in web 3.0 by stating that ownership is still a myth as venture capitalists and limited partnerships would take on a major share of the web. In his words, web 3.0 would maintain centralization in many aspects, thereby calling for the development of web 5.0.

One of the prime use cases for web 5 is empowering users with control of their identity, which we all refer to as , used interchangeably with Self-Sovereign Identity (SSI), an approach to digital identity that gives individuals control of their digital identities.

Why did Jack introduce web 5? Why does an increasing number of people want to take back control of their data through decentralization and blockchain? What benefits does this hold for people and organizations? I’ll be answering some of these questions in this article.

Benefits of decentralized identity for Organizations

  1. Decentralized Identities allow organizations to verify information instantly without having to contact the issuing party, like a driver’s licensing organization or university, to ensure that IDs, certificates, or documents are valid. It takes a lot of time, sometimes, weeks and months to manually very credentials, which slows down recruitment and processing times while using a lot of financial and human resources. With DIDs, we can be able to instantly verify someone’s credentials in seconds by scanning a QR code or running it through a credential verifier tool.

Here is a typical example of how a company can leverage decentralized identity technology to hire efficiently:

  • Anita, a job applicant, manages her decentralized identity and Verifiable Credentials on her phone with a Wallet and wants to apply for the company looking for a community manager.
  • A Bootcamp she attended issues her a community management certificate as a Verifiable Credential that she stores on her digital wallet and this credential can’t be faked.
  • The company makes a job offer and they just need to check that her certificate is authentic.
  • The company requests her data and she is prompted on her phone to give authorization to the company to show her certificate
  • The company receives a QR code and simply scans it to instantly confirm that her community management certificate is authentic.
  • They offer Anita the job.

The traditional, manual verification process would have taken several weeks or months to achieve the same outcome.

2. DIDs enable issuing organizations to conveniently provide Verifiable Credentials to people and prevent fraud which in turn, greatly reduces costs and increases efficiency. A lot of people use fraudulent and forged certificates to get jobs, even in very high-risk jobs. A university can issue fraud-proof credentials, which the recruiting organisations can easily verify, thereby reducing the possibility of forgery.

Benefits of decentralized identity for Individuals

  1. Decentralized identity increases individual control of identifying information. Decentralized identifiers and attestations can be verified without relying on centralized authorities and third-party services.
  2. People can decide which information they want to reveal to specific parties, such as the government or employers.
  3. Decentralized identity makes identity data portable. Users store attestations and identifiers in mobile wallets and can share them with any party of their choice. Decentralized identifiers and attestations are not locked into the database of the issuing organization. Assume that someone called Anita has a digital wallet that helps her to manage authorizations, IDs and data for connecting to different applications. Anita can use the wallet to enter her sign-in credentials with a decentralized social media app. The app knows her identity as Anita and she wouldn’t have to worry about creating a profile. Her interactions with the app will be stored on a decentralized web node. What Anita can do now is, to switch to other social media apps, with the social persona she created on the present social media app.
  4. Decentralized identity enables anti-Sybil mechanisms to identify when one individual human is pretending to be multiple humans to game or spam some system. Since the user will have to log in with the same credentials, it often becomes impractical to do so multiple times without the system detecting a duplication.


Decentralized Identity has a lot of pros, and so many individuals and organizations are already keying into it. Companies like , , , , , etc have worked hard (and are still) in creating decentralized identity solutions. I hope to see where these efforts lead and look forward to seeing DIDs become more used in a bunch of applications as well.

Learn about DIDs with me

This article is part of the DID monthly series, where I write articles that will enable anyone new to the Decentralized Identity ecosystem to learn the basics of DIDs. Stay up to date on the latest additions to this series by following us on or .

Other articles in this series so far



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Amarachi Johnson-Ubah

Amarachi Johnson-Ubah


Front End Web developer | Community Relations Aficionado