What is it?
DID stands for “Decentralised ID”, a proof of identity solution issued by an autonomous, independent, and decentralised system. This isn’t a brand-new concept but it’s starting to get some traction. Here is a breakdown on why you might be throwing your drivers licence out the window all too soon.
Why should you care about DIDs?
Many of us share more information with google than we do our own partners or even law enforcement. The rise of KYC is a good example of this. It is becoming so popular that even my gym wanted a facial scan in their sign-up process. To avoid it I wore a mask and sunglasses. Just to see if it would work. And it did. But this privacy method is limited in its application.
Birthdays, addresses, fingerprints, tax file numbers, and drivers licence #s are private pieces of information. And don’t even get me stated on fingerprint biometric tech… The police must believe you have committed an indictable offence (read serious crime) before they demand your fingerprints. Yet now we are in an age where corporates constantly ask for it.
But why do companies want this data? To mitigate regulatory risk at their end, and to track you as a customer. There is privacy laws that prevent certain tracking of information about people which is why it is such a concern that Bunnings, Kmart and the Good Guys are now using facial recognition software in their stores. They say it is to stop shoplifting, but the cynic in me thinks it is so they can track who you are, where you go, and what you buy. All so they can sell you more crap you don’t need.
DID’s have the potential to provide other parties proof of your identity, without handing them unnecessary and additional private information that they can be used to your detriment.
How does it work?
By engaging a DID provider, users can store nationally accepted forms of certification or data that is specifically linked to you as an individual. The identification info is stored on your digital wallet and when you provide the address to a external source you can approve what parts of the data are shared. Coinmarketcap use a great example of proving you are over 18 years of age. Buying booze doesn’t actually require your drivers licence number, or your photo, they just need to know your birthdate. DIDs in your wallet may be able to solve this problem.
DID Explainer has a great step by step example of how this works. I encourage you all to have a read of their proposed process. It’s not complex, even I could understand it. They use the example of a user who may want to switch energy providers. The new supplier asks for their existing bill so they can provide a quote based on your usage. They don’t need your private information, just the energy use for that property.
Here the consumer can access information from his current supplier, share it with the new supplier, and ensure that the regulator has certified that the consumer is who they say they are (at the appropirate stage). All by using transparent and trustless smart contracts with supporting cryptography.
Source – I put this image in to make my writing look smart 😊
But how far along is this concept, and who is working in this space?
Who is playing in the DID sandpit
Polygon are the biggest I’ve seen enter this stage. They are calling it “Polygon ID”. There are others, but let’s focus on one of my all time fav large-caps. Here is an overview of how it will work from the most likely rediculously overpaid marketing team at Poly.
So now you know what it is and who is working in this space. But like all tech, what real world problems does it solve?
Use cases
Your work decides checking the degrees you list on LinkedIn is a good idea. Previously they would need to call your Uni. And from experience they are going to be on hold for at least 30mins each time they call. DIDs mean this could be done in a matter of mins and provide verification you hold a Bachelor degree.
It’s not just you that has unique identifiers that are assigned by centralised authorities and regulators. DIDs can enter this space too. Supply chain confirmation of product authenticity is one potential use case. Not every stakeholder needs all the data, they may just need to know where the last port was the item came from, or where did it originate, or who made it, or how much it costs/sells for.
DIDs could help with anything that requires some sort of identification. Needless to say, this is a very large market. (SnappyCappy DID shitcoin coming to a DEX near you soon)
When will these be mainstream?
With huge firms like Poly playing this game, it’s bound to be sooner rather than later, but the competition is tough. Australia Post is in the sandpit as well. But considering it takes them 4 weeks to deliver a letter (which is there one job FFS), I don’t hold much hope for traditional companies being fast enough to provide a globally recognised, decentralised, and trustless solution anytime soon. Go Web3 Go !!!
I follow the KISS principles in most of what I do. If you want to dig into the detail I suggest hitting up W3c’s site.
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