With the rapid advances in the web’s infrastructure, digital identity is among the fields that will see significant changes likely occur soon. Web3 and the Metaverse require an identity management system that is decentralized and guarantees identity security to its customers.
What Is Decentralized Identity?
Decentralized identity is a new idea that suggests that data about identity should only be held by the individual who is the data owner.
Users can create and manage their digital identities without relying on third-party providers. In particular, decentralized digital identification (DDID) is an uncentralized system designed to recreate the current centralized identity management process using blockchain technology.
For instance, a standard for digital credentials, called verifiable Credentials (VCs), can authenticate a person’s identity and permit the storage of that information in a un custodial wallet.
Users can disclose the entire or specific aspects of their identity and personal information to third-party organizations, including banks, the government, or even schools, on their own.
It also makes storing information more easily in one source. Another example is self-sovereign identity (SSI), which concentrates on authentic and verified credentials tied to real-world verification data that is distributed.
How Does Decentralized Identity Work on Web3?
Users have total control over their personal information online through a decentralized identity. On Web3, users from all walks of life can communicate and express themselves in various ways through tools like NFTs and blockchain.
They are crucial in bringing users into a new world of empowerment and freedom. Every person can create their own NFT avatar to show their identity, and every NFT has its unique identity that cannot be duplicated. This makes it safer to interact in online groups.
Decentralized identification usually employs a decentralized storage system like a non-custodial identity wallet to store individuals’ identity decentralized (DIDs).
It could be an application or extension wallet for browsers that permits users to build their own secure identity and control access to it through other service companies.
The users are the sole proprietors of private and public-private cryptographic keys within this design. Certain wallets could utilize other authentication methods to safeguard users’ data.
For instance, self-sovereign identities (SSIs) can connect users’ credentials to verified data from the real world, such as biometrics, and save these within the blockchain.
They can also aid users in managing their digital identities without relying on third-party services. To protect personal information, SSIs keep the information in wallets that are not custodial and entirely managed by the individual.
To confirm identity within the realm of the metaverse, customers can utilize their private keys or biometric data to verify transactions with applications that offer the decentralized authentication of identities.
The service provider will then check the blockchain for the unique DID and use the decentralized ID that the user has shared.
What Are Soulbound Tokens (SBTs)?
The idea was conceived by Ethereum (ETH) co-founder Vitalik Buterin; soul bound tokens (SBTs) are not transferable NFTs that are unique to an individual and forever tied with digital wallets (Souls).
SBTs function as achievement badges and store various personal information such as educational credentials, CVs clubs, memberships to clubs, etc.
Anyone can trace them; therefore, it is nearly impossible to fake credentials. For instance, a Web3 firm hiring software developers could use SBTs to verify the candidate’s credentials, or an artist could give NFTs to their souls to provide proof of their work.
With SBTs, users can gain benefits that change how we perceive people’s social identities in real life. SBTs are an opportunity to verify who someone is as well as confirm their credibility, thereby establishing trust-based relationships in decentralized environments.
The rise of SBTs indicates that Web3 is more than just financial zed assets. They can be used to represent the user’s credentials and could bring the feeling of authentic human connections and communities to the online world.
SBTs, for instance, describe the characteristics of an individual, such as their accomplishments, abilities, and memberships.
They could be the foundational blocks that can change how people interact with one another via blockchains, for instance, an amalgamation of resumes as well as online profile pages on social networks.
Benefits of Using Decentralized Identity
Instead of relying upon a central server log, the decentralized identity gives users complete control over their digital identity.
It removes the need for users to enter an email address, password, and ID wallet, allowing users to have more control over their biometric and metaverse identities within web3. Web3 environment.
Users can choose which aspects of their data to be shared with what service providers through the decentralized identity. This gives the users control, making it easier to keep their information secure with an identity wallet that is single.
Blockchain’s use for identification that is decentralized provides strong security and security. Only information with digital signatures can be decoded and viewed, thereby protecting users from cyberattacks and identity theft.
The identity data stored on blockchains is unchangeable and more secure than data stored on central systems. Data is not erased or modified after it is stored on the distributed network, which means nobody outside can alter users’ information.
Where do blockchain data be kept?
Blockchain is not centrally managed; therefore, there is no central repository in which it is stored. It is therefore stored on computers or in systems throughout the internet. The computers or systems are referred to as nodes. Each node has one replica of the blockchain or the transactions carried out through the network.
How much storage capacity does blockchain require?
Even at a modest processing rate, storage for the Hyperledger’s blockchain ledger can be in the multi-terabyte or terabyte size. Based on the most accurate estimate of 1,000 transactions per block, for the 100 TPS Blockchain activity, 0.659 trillion TB of data storage is needed.
A decentralized digital identity is one of the most advanced technologies that can help propel the Web3 revolution. Users can access their accounts from anywhere without remembering multiple usernames or passwords.
They can also enjoy improved security and data protection in the virtual world. In the same way, companies can offer user-specific services while protecting their privacy.
The technology could come out sooner than we anticipated, with both established and new companies already taking advantage of the technology; for instance, Microsoft’s new software Entra allows users to verify and secure.
