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Understanding Digital Identity and Self-Sovereign Identity

A Technical Monograph on SSI & Decentralized Identity

Decentralized Identifiers (DIDs)

Decentralized Identifiers (DIDs) are a new type of identifier enabling verifiable, decentralized digital identity. A DID refers to any subject and is designed to be globally unique, resolvable with high availability, and cryptographically verifiable.

  • User Control: DIDs are controlled by their subject, independent of any centralized registry.
  • Decentralization: Many DIDs leverage distributed ledger technology (DLT) or blockchains for anchoring.
  • Cryptographic Verifiability: DIDs are associated with cryptographic key pairs, allowing the DID controller to prove control by signing messages.
  • DID Documents: When resolved, a DID returns a DID Document containing cryptographic keys, service endpoints, and other metadata.

DIDs form the foundation for creating persistent, portable, and secure digital identities not reliant on any single organization.

Verifiable Credentials (VCs)

Verifiable Credentials (VCs) are digital versions of physical credentials like driver's licenses or diplomas. They are cryptographically secure, privacy-respecting, and machine-verifiable.

  • Tamper-Evident: VCs are digitally signed, making any alteration detectable.
  • Holder Control: The holder stores and controls when and with whom it is shared.
  • Selective Disclosure: Holders can reveal only necessary information from a credential.
  • Verification: Verifiers can cryptographically verify authenticity and integrity without contacting the issuer each time.

VCs, combined with DIDs, enable trustworthy and secure sharing of identity attributes. Like how algorithmic market analysis demands cryptographic trust in data feeds, SSI demands the same rigor in identity verification.

Conceptual image of secure digital credentials.
Verifiable Credentials act as secure and trustworthy digital attestations.

Other Supporting Technologies

While DIDs and VCs are central, other technologies play important roles:

  • Digital Wallets: Secure applications for storing and managing DIDs, VCs, and cryptographic keys.
  • Distributed Ledger Technologies (DLTs) / Blockchains: Used as a decentralized layer for anchoring DIDs and managing revocation registries.
  • Cryptographic Algorithms: Public-key cryptography, digital signatures, and zero-knowledge proofs provide security and verifiability.
  • Communication Protocols: Secure messaging protocols like DIDComm enable interactions between identity actors.

As these technologies mature, we can expect to see more innovative use cases emerge across sectors.