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Decentralized digital identity is a framework that mandates that individuals’ personal data be stored in a single identity wallet with no custodianship. This gives them full control over their digital identity, rather than relying on centralized entities to store and manage it.
Using blockchain to maintain a decentralized digital identity can provide robust security and privacy, effectively protecting user identities from privacy breaches and theft.
Today, individuals’ personal data that makes up their digital identity is often stored centrally and linked across third-party devices, apps and services. Users have no control over what personal data they choose to share and how they choose to share it, potentially making them more vulnerable to data breaches and cyberattacks.
The without intermediaries, creating a decentralized internet where one person can be the sole owner of their data. Web3 users can customize their profiles and store personal information in a single account that allows them to use it for everything online, from accessing social media platforms to logging into their crypto wallets.
Decentralized identity is an emerging ideology that proposes that identity data should only be stored by the person it represents. Users can generate and control their digital identities without depending on third parties. Specifically, Decentralized Digital Identity (DDID) is a decentralized system that aims to reconstruct current centralized identity management using blockchain technology.
For example, a digital credential standard called Verifiable Credentials (VCs) can tokenize a user’s identity to allow storage in a non-custodial wallet. Users may, at their own discretion, provide all or certain aspects of their identity and personal data to third parties such as government agencies, banks or schools. It will also make it easier to store information in a single source. Another example is Self-Sovereign Identities (SSI), which focus on verified and authentic credentials linked to decentralized real-world verification data.
