I researched 50+ sources about decentralized identity and summarized what I learned here


I researched 50+ sources about decentralized identity and summarized what I learned here

This is an extension of my original tweet on Twitter: https://twitter.com/DreamerlyHQ/status/1586024999638470656

The Twitter version is short and sweet while this post digs a little deeper into the subject. If you enjoy this post, please consider following our Twitter (@dreamerlyHQ) https://twitter.com/DreamerlyHQ (it really motivates me to write more cool and interesting stuff in the future, so thank you for following!)

Let’s dive in!

Why should you care about decentralized identity?

A big part of our modern life happens online. As a consequence, you need an identity to represent you in the virtual world. When we talk about identity, particularly online identity, what we think of is stuff like username, avatar, number of followers, content that you share online, or anything that separates you from others. Such information is essentially entries stored in the databases of Meta, Google, and Twitter.

And here is the thing: you don’t own it. Meta, Google, and Twitter do.

Now, most people already know that fact, but what’s so wrong with not owning your data? After all, we need tools to function our daily lives, and those platforms still work okay (most of the time) for us. What to complain about?

Probably nothing, except for when we are banned from accessing the service (if you have ever been suspended on Reddit, welcome on board!), when their algorithms change in less favor of our benefits, or when the platforms shut down (you think Facebook will last your entire lifetime?).

I know, I’m being extreme. Most of us are just regular users. We comply with the rules, we are not bots, and we don’t do anything that violates the policy. But it is also the fact that we are just regular users that make us feel powerless when we don’t own our data. Most of the time, we are compliant users, but once in a while, we may do unintentional things that could accidentally make those platforms think we are harmful. And since you are a regular user, it is extremely difficult to deal with the platform. It is the risk of accidentally getting harmed by the platform that makes not owning your data a problem.

That’s just the first unpleasant thing about not owning data. Of course, it is just a possibility, but the next unpleasant thing is not a probability, it is a sure thing: those platforms (and the third parties) will use your data to fuel their services. We have to consent to give away our data although we actually don’t want to!

Next comes the security problem. Those user databases are so valuable that they have become honeypots for hackers. At this point, I truly believe that my data has been leaked somewhere, just not sure where. Remember the Facebook-Cambridge Analytica scandal? Million of users have their data leaked and the hacked data is used to send political advertising to the users.

That’s not all. The database is not only centralized but it is also siloed by each network. Facebook has a version of you, Twitter has another, and Instagram has another. While it’s cool that I have a different self on each of the platforms, I am tired of rebuilding my profile and my reputation again and again. And if those platforms shut down or I get banned, I will lose all the things I have on that platform. (Actually, I can download my data on Facebook, but what can I do with it? Import such data onto Twitter? Elon, can we do that yet?)

Alright, enough for ranting. Time for a solution.

Enter Decentralized Identity

What can we do to solve these problems? Decentralized identity might be a good answer.

So what is decentralized identity? Let’s have a high-level understanding of decentralized identity before we dive into the working mechanism of decentralized identity under the hood.

The key difference between web2 identity and web3 identity is centered around two things: identity ownership and portability (another word is interoperability).

Identity ownership is the most important trait of decentralized identity. The word decentralized implies that the ownership is dispersed from the centralized identities and is restored to users’ hands.

The second interesting trait of decentralized identity is portability, which means you can use your identity to access different platforms seamlessly.

Now, let’s get under the hood of how Decentralized Identifiers (DID) works.

Currently, the most accepted standard for DID is made by World Wide Web Consortium (W3C). As per the standard of W3C, a DID is a URI (similar to a URL) that can resolve to (i.e., look up to) a DID document. Let’s pause a little and look closely at each element.

- URI: URI is pretty similar to URL. It is used to identify a logical or physical resource on the internet.

- DID document is a document that contains information associated with the subject that DID refer to (DID subject).

- DID document is stored on a verifiable data registry, which can be a blockchain or decentralized storage (eg., Ceramic Network)

- The last component in the DID infrastructure is DID controller, which controls (changes or updates) DID. DID controller can sometimes be DID subject.

Below is the graph that shows the infrastructure of DID (source: W3C)


Another decentralized identity standard is Verifiable Credentials. While DID represents your identity, VCs represent your achievements, certificates, and participation. For example, a VC can be a badge that helps a member of a DAO prove their contribution to the community and thus, receive more voting power.

Besides using DID and VC to create decentralized identity, another way to create decentralized identity is to wrap the identity in a token, such as an NFT or a Soulbound Token. This token will contain the data that make up its owner’s identity. Since user owns this token, they can use it to access any platform across web3 (portability).

Top projects in decentralized identity

Enough for theory. Let’s explore the top projects working on making decentralized identity a reality.

1/ Disco (disco.xyz/)

Although still in the beta phase, Disco has attracted a lot of attention. It helps users create their identity in web3 and they can take this identity with them to access any apps and spaces in the ecosystem, all in one “backpack”.

Currently, Disco stores user data on Ceramic Network, a decentralized storage, but will integrate more storage solutions over time.

Recently, Disco integrated with Guild to allow gated access and customized roles using VCs.

2/ Spruce (spruceid.com/)

Spruce is building infrastructure for decentralized identity. Its DIDKit helps developers build DIDs and VCs functionality for their projects across platforms.

Spruce also offers Kepler, a decentralized storage, which is an important component of DID system.

The company is funded by Y Combinator and a16z.

3/ Lens Protocol (lens.xyz/)

Lens Protocol is a decentralized social network. At the core, Lens Protocol has two components:

- Profile NFT

- Projects build on top of Lens

The Profile NFT is the main object in the Lens Protocol. Think of this NFT as your portable profile. The special thing about this NFT is the ability to post publications (content) to it. It also contains all the posts, comments, and other content that you generate.

Since you own this NFT, you also own all of the data and content that you generate on the platform (aka social graph) and bring it to new platforms.

What’s more, Lens allows builders to create platforms on top of it, creating a rich and vibrant ecosystem. On Lens, users can upload their videos on Lenstube (a Web3 YouTube), update what is happening on Lenster (a Web3 Twitter), and many more in the future.

4/ Sismo (sismo.io/)

Sismo helps users claim badges in the form of a soulbound token (SBT). For example, a badge can be "Donated to Gitcoin grants" or "Voted 2 times in the ENS DAO". These badges can help users gain access to gated services or prove their reputation within a community.

Thanks for reading this far. Hope you learned a great deal about decentralized identity. Appreciate any comments and feedback.

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