A decentralized identifier (DID) represents a unique digital ID created by an independent and decentralized platform, enabling users to authenticate and prove ownership of their digital identities.

What is a Decentralized Identifier (DID)?

DIDs are a next-generation form of universally unique identifiers (UUIDs), designed to be cryptographically verifiable without requiring a central registration authority. They can identify individuals, abstract entities, organizations, data models, and even Internet of Things (IoT) devices.

The essence of DIDs is to return control of digital identity to individuals, empowering them to generate identifiers through trusted systems. By allowing these identifiers to be authenticated with cryptographic proofs (such as digital signatures), DIDs create a secure, seamless, and private way to exchange data, often leveraging blockchain technology and distributed ledger technology (DLT).

Why Are DIDs Important in the Digital World?

In today’s digital ecosystem, sharing personal information to access apps, websites, services, and devices is commonplace. Traditional technology, which uses UUIDs and uniform resource names (URNs), relies on centralized authorities and lacks cryptographic mechanisms to verify ownership. This centralized approach often leads to privacy issues, data theft, and other security risks.

DIDs, however, allow users to manage multiple identifiers, such as government-issued certificates, educational records, and other personally identifiable information (PII), in a secure, private digital wallet. With DIDs, a blockchain-based distributed ledger manages and authenticates these identifiers rather than relying on a central authority. Importantly, personal identification information isn’t stored on the ledger itself but within the user’s digital wallet. This setup enables users to selectively share specific identity information across different services as needed.

How Decentralized Identifiers Work

Unlike traditional centralized identification systems, where all information is often shared with third parties, DIDs allow users to share only the necessary information with any service or application. Verification happens through blockchain technology. For instance, if you need to prove you’re over 18 to register for a service, the DID framework allows you to share only the proof of age without disclosing your exact date of birth.

The DID Framework Structure

The DID framework was initially outlined by the World Wide Web Consortium (W3C) and is a simple yet powerful identifier structure consisting of three main components:

1. The DID URI Scheme Identifier: This identifier is stored on-chain in the blockchain.
2. The DID Method Identifier: It defines the method used to create the identifier.
3. The DID Method-Specific Identifier: This is unique to each DID method, providing the specific ID for that method.

DIDs operate within a global key-value database, hosted by compatible blockchains like Ethereum, to store DID documents. A DID document includes public keys, service endpoints, and authentication protocols, enabling cryptographically verifiable interactions with identified entities. The public key in a DID document is used for authentication, and ownership of the DID can be proven by the private key associated with the document.

Benefits of Decentralized Identifiers

Decentralized Identifiers offer several distinct advantages over traditional centralized ID frameworks:

• Enhanced Privacy: Users control exactly what information they share with each service, reducing the risk of data breaches and unauthorized access to personal data.
• Improved Security: Cryptographic verification minimizes the chance of identity theft and fraud, as ownership is authenticated via private keys.
• Greater Control: Users can manage and share multiple identifiers from a single digital wallet, maintaining control over their digital identity and personal information.
• Interoperability: DIDs support interoperability across platforms, as they’re compatible with various blockchain systems, enabling universal access across different services and ecosystems.

Conclusion

Decentralized Identifiers are revolutionizing digital identity by providing a secure, private, and user-controlled system for verifying identities online. As more applications and services adopt this technology, individuals and organizations alike stand to benefit from safer, more secure data exchange powered by cryptography and blockchain’s distributed ledgers.