What is Decentralized Identity?
Imagine walking into a bar in the future and not having to dig out your ID from your bag, but simply using your phone to verify your age with a beep. This eliminates the worry of losing your ID or having your personal information recorded and misused by malicious individuals.
This application scenario can be realized through the use of Decentralized Identity (DID) technology on the blockchain, which can also enhance personal privacy and data security.
In April, “WEB3+” held the “Block Point Gathering” event, inviting Huang Yanlin, a digital development department information security system engineer, Wang Zhiqing, co-founder and digital director of LeadBest Consulting Group, and Lin Hongyu, chairman of the Bitcoin and Virtual Currency Development Association, to share the practical applications and future development possibilities of “Decentralized Identity: A New Solution for Identity Verification”.
What are the advantages of decentralized identity and where can it be applied? This article summarizes the key points of the event.
Digital Wallet: “Manage your own identity”
Huang Yanlin first shared the three main challenges facing the development of digital certificates in Taiwan.
Challenge 1: Balancing privacy protection and convenience in reducing digital footprints and platform surveillance
In the Web2 world, although there are many convenient digital services, they are gradually becoming centralized platforms. These platforms are often questioned for tracking digital footprints and potential surveillance by capitalist platforms.
However, it is currently difficult to balance privacy protection and convenience. These two aspects are like the two ends of a scale, making it difficult to choose. Huang Yanlin said, “Is it possible to find a third way in this process of balancing? This is a problem that decentralized identity wants to address.”
Challenge 2: Lack of interoperability standards for decentralized identity systems
At present, there is a lack of specific interoperability standards for decentralized identity systems. However, for the past 20 to 30 years, there have been many people promoting similar concepts in both the Web3 world and around the world.
However, because people have not been able to find a common concept, these efforts have ultimately failed. It was not until the past two years that relevant standards, such as the World Wide Web Consortium’s (W3C) Decentralized Identifiers (DID) Recommendation v1.0 and Verifiable Credentials Data Model (VCDM) Recommendation v1.1, were finally established.
Challenge 3: Limited awareness of digital signatures
For the general public, the concept of digital signatures has not yet become widespread. In terms of electronic documents, the Electronic Signatures Act is currently undergoing revision, and related laws and infrastructure are gradually improving. However, many people are still accustomed to handling things in a handwritten manner.
Huang Yanlin emphasized that the focus of decentralized identity is actually the concept of self-sovereign identity. In simple terms, it means “my identity, my control”.
Huang Yanlin explained that users’ personal data should be managed by themselves, not by service providers. With the maturity of technology and standards in recent years, the Digital Democracy Department subsequently proposed the “Digital Wallet” project, hoping to achieve personal digital autonomy and data authorization.
The Digital Wallet is a data authorization switch and a digital democratic society verification infrastructure established based on international standards.
For citizens, it will be a convenient and privacy-preserving authentication and verification mechanism, connecting various services. For the government, when various units are undergoing digital transformation, there is a lack of basic packages. If these packages can be completed using decentralized identity or verifiable credentials, it can also accelerate the goal of a smart country.
If we expand the application scope, whether Taiwan’s credentials can be globally recognized by other countries in the future is an important issue. For example, passports are currently based on international standards and are used in over 100 countries. Decentralized identity can play a crucial role in many application scenarios of verifiable credentials.
Can blockchain technology be combined with electronic voting?
After the 2024 presidential election, the possibility of electronic voting has once again sparked discussions in the community. Traditional manual voting has its benefits, but human errors or mistakes can occur. Although electronic voting can reduce the problem of human errors, many people are concerned about the possibility of tampering or manipulation.
The transparency and immutability of blockchain technology, combined with zero-knowledge proofs, can actually solve various aspects of the voting process, from candidate registration to the distribution of campaign funds. It can also allow the public to monitor and verify the process.
Wang Zhiqing gave an example. Candidates can register on the blockchain contract, and users can obtain identity verification through a natural person certificate or a DID digital wallet. The voting process is signed and encrypted using a personal private key, and then the zero-knowledge proof technology verifies the legality of the individual’s vote without revealing too much voting information, in line with the principle of secret voting.
The biggest concern of the public regarding electronic voting is whether the programming process can ensure that it is not tampered with or vulnerable to external network attacks, affecting the credibility of the election. However, through the use of blockchain, anyone can verify it, and the probability of tampering is relatively lower.
Wang Zhiqing mentioned that there are still several challenges for Taiwan’s journey towards electronic voting. Firstly, it is essential to pass legislation and complete the transition from traditional voting to electronic voting. Secondly, public awareness and acceptance need to reach a certain level for widespread promotion and implementation to be possible.
Is decentralized identity feasible under current regulations?
From a legal perspective, what challenges or concerns may arise in the development of decentralized identity?
Lin Hongyu pointed out that “this issue is still quite cutting-edge, and it is not easy to find relevant regulations at the moment.” However, based on the current technology and application observations, decentralized identity can achieve more efficient verification by combining on-chain and off-chain information, allowing consensus to be reached more quickly. In addition, decentralized identity is highly composable and can be used in different blockchain protocols, different public sectors offline, or even cross-border organizational collaborations, accelerating global collaboration.
The founder of Ethereum has previously proposed a similar concept called “soul-binding,” where an NFT permanently bound to a wallet can prove that a user “once existed” and provide proof of their participation in activities.
Lin Hongyu mentioned that if we zoom out and look at the bigger picture, in the future, it is also possible to use decentralized identity for proof of education, work licenses, or even verification of criminal records.
Furthermore, Lin Hongyu used the recent global discussion on the WorldCoin project as an example to illustrate the concerns surrounding decentralized identity.
The WorldCoin project, established by Sam Altman, co-founder of OpenAI, aims to create a global financial service and promote it through its native tokens. The most notable feature of this project is the collection of iris data from people around the world through photographs, converting it into a code, encrypting it, and uploading it to the blockchain for identity verification. Users are then rewarded with a certain proportion of platform tokens.
Currently, over 3 million people worldwide have contributed their iris data and received 30 WorldCoin tokens as rewards. However, since its launch, this project has been heavily criticized and discussed by the community.
The biggest concern is that the WorldCoin Foundation is responsible for collecting and storing iris and code data from around the world. Lin Hongyu cited similar projects launched by Facebook in the past or Taiwan’s proposal to combine identity cards with fingerprint collection, which ultimately failed. Human iris, as a unique biometric feature, is considered more private personal information, making it extremely challenging to implement on a global scale.
Additionally, all users’ iris information is actually stored on a third-party online server, and although the team promises not to directly access this personal data, there is no trusted third party to verify such claims, which still raises concerns among many users.
Lin Hongyu believes that projects that collect biometric features on a global scale like this will encounter numerous obstacles. He sees more potential in the application of blockchain domain names and decentralized identity applications on a smaller scale.
Lin Hongyu emphasized that whether it is digital assets or electronic voting, the biggest challenge for the future development of decentralized identity lies in how to ensure that people properly protect their private keys and perform legal and appropriate signature operations.
