Twitter Spaces Recap — What is Decentralized Identity and why Do we Need it?

The February 19th Twitter Spaces session was an amazing opportunity for us to learn more about Decentralized identity and why we need it. For some of you who may have missed that session, read this summary article to catch up! If you prefer to listen to the recording, find it here.

We invited Chris Were, Co-founder and CEO @Verida, Daniel Buchner, Head of Decentralized Identity at Block, and Idris Olubisi, Founder @Web3Afrika to share and have a conversation with the community, on the topic of Decentralized identity and its relevance.

We started off the discussion by learning about how Chris and Daniel came into the Decentralized Identity space.

Daniel got interested in the Decentralized Identity field in 2011 when bitcoin was new. He worked at Mozilla at that point, and they were working on some identity concepts. So when he discovered bitcoin, he felt it may be a better approach to what they were building than the previous approach, so he started working on it. He later joined Microsoft, where he formed the Decentralized Identity group, and now at Block, he leads Decentralized identity.

Chris’ journey in Decentralized Identity was use-case driven. In Australia, he previously had a company that was building software for non-profit organisations and they effectively helped caseworkers in these organizations manage the data for all of their clients. They provided software that helped very sensitive information about the individual to be managed in a secure way, and through his work there, he realised that they had a structural problem where an individual would go and get some report from someone and they would have to tell the story to somebody just so that their story can be stored into a computer and then that person will be referred to another case where there are 3 or 4 people. An individual will have to repeat the story over and over again and he realized that the fact that people didn’t have their own digital identity and data that allowed them to have their own story they can easily share, was a structural problem in terms of the way they used technology. And so he exit the company and started to look deeper into how blockchain allowed people to own their own crypto assets, and how it helps people own their identity and data. He tried to use this technology for a broader use case and the greater good.

We went further to talk about Decentralized Identity, and some shortcomings of web2 that makes it necessary to decentralize

The concept of Decentralized Identity borders on identity management where entities have full control of their data — they can share it on a need-to-know basis without relying on any centralized entities like corporations, intermediaries and govt, Idris Explained. Decentralized identities are unique to digital identifiers and stored on the blockchain which allows for secure and temper-resistant storage of personal information.

Throwing more light, Chris mentioned that lot of it is based on public-private keys, and there’s an inherent ability to leverage cryptography schemes that brings a big amount of trust to interactions that individuals and systems can have when interacting with Decentralized Identity. An individual can sign some data and be trusted and verified that it has been signed by the holder of that identity, similarly, those keys can be used to leverage for encryption and secure communication. Enhanced trust, privacy and security are fundamental technical benefits of DIDs.

Users have the ability to control their identity and data, which brings about increased portability not dependent on a central platform to provide API. Individuals have more control over how their data and identity are used. These are some of the important differences to understand between how web2 operates and how we’re expecting DID to work in a future world.

Daniel mentioned that the concept of identity is in pretty much everything we do, app data, information, and everything tied to us.

What are some Use Cases for Decentralized Identity?

1. Healthcare:
   a. As a doctor, you can have a credential that approves that you have a particular qualification that proves you’re a doctor which in turn allows you to get access to an online discussion forum with other doctors with similar qualifications. You can also use the same credential to access a building in the hospital or to unlock secured encrypted data storage, with access to patients’ data needed to do your work. You might be able to encrypt messages using your doctor’s identity and decrypt peer-to-peer messages from other doctors.
   b. A patient can anonymously use social recovery to access health data in event of a medical emergency.

We’re still a ton away from realizing some of these use cases, and there can be severe implications on the kind of health services that can be provided with the patients not having access to and full control of their data.

How can we create interoperability in a Decentralized Identity Ecosystem?

If you’re using decentralized Identity tools and you’re looking to ensure interoperability, Chris itemized how you can do this;

1. Become familiar with the standards.
2. Use established libraries like Veramo. Don’t reinvent what exists already if you don’t have to. There is a lot of nuance in these identity standards and a tool like Veramo has important tooling infrastructure to enable interoperability across different projects.
3. Be aware that things are constantly changing. Know that what you’re using today may not be what you’ll use next year. Join conversations and work groups working on standards, follow their mailing list and keep up to date with conversions happening there. Join online communities building in the space and discussing the different standards.
4. If you’re a builder or developer, have a lot of empathy. There are always new concepts to learn.

Questions from the community

1. Is Decentralized Identity needed for Decentralized Exchanges?
   Daniel: We are working on this right now at Block. We believe that you need a decentralized identity for decentralized exchange. You can’t really separate this two.
2. What do you think about decentralized KYC?
   Daniel: We are working on KYC right now, I don’t like it. But as a regular institution, KYC is interesting because a lot of governments don’t allow it to be privacy-preserving which is unfortunate. I don’t know if there’s something like decentralized KYC because the only reason we’re collecting KYC is that we’re told to by an entity. I wish it didn’t exist, and I hope so in the future.
   Chris: KYC is a form of credential and on a technical level, is a part of trust and reputation that need to flow between individuals and entities in centralized and decentralized networks.

Although the Twitter space ended on a cliffhanger due to technical issues, we sure had a good hour of sharing and learning about decentralized identity, and are thankful to our speakers and everyone who joined us.

If you’re a Web3 organization looking to solve identity issues, we’d love to hear from you! You can join the conversation on our Discord. We’re also on LinkedIn and Twitter if that’s more your thing.

More Twitter Spaces to come in the future so stay tuned.