DeFiChain

<p>Who controls your digital information - the stuff like name, face, address, social profiles, browsing history, nationality, past transactions, and other details that represent your personhood? Most likely, the Big Tech. You give them control over your data when you sign up for their services.</p>
<p>Web3 aims to change that by giving you, the user, control over your digital persona. The companies that need your data will have to seek your explicit approval. You’ll be able to choose what data to share with them or keep private. It’s going to change the way we interact with the digital world.</p>
<p>This could get overwhelming quickly. So, let’s talk in plain English. Currently, the email platforms, social media apps, and other tech giants collect your personal data and act as gatekeepers, controlling your digital personas and following you wherever we go. The system is broken. It’s unfair to users, though it might have seemed a fair exchange a couple of decades ago.</p>
<h3 id="strong-enter-the-decentralized-identity-did-strong"><strong>Enter the decentralized identity (DID)</strong></h3>
<p>The self-sovereign identity gives you greater control over how and with whom you can share your personal data online. It’s in line with the ethos of Web3, giving users the ownership of their data and assets. And your personal data is indeed an asset. It eliminates your reliance on a small number of tech giants - the companies that have been at the center of various scandals and <a href="https://www.npr.org/2021/04/09/986005820/after-data-breach-exposes-530-million-facebook-says-it-will-not-notify-users" rel="noopener noreferrer nofollow">data breaches</a>.</p>
<p>While Web2 companies store your data on centralized servers, DIDs are based on blockchain solutions such as the decentralized file-sharing platform InterPlanetary File System (IPFS) that can’t be censored or shut down. Your data is cryptographically secure and accessible only to you. It can’t be stored or shared anywhere without your explicit consent.</p>
<h3 id="strong-the-benefits-of-decentralized-identity-strong"><strong>The Benefits of Decentralized Identity</strong></h3>
<p>A decentralized, user-controlled identity would bring a wide range of benefits for users including enhanced privacy and security. DIDs can even be used for universal login, eliminating the need for separate usernames and passwords for each platform you use.</p>
<p>Let’s take a quick look at some of the benefits of self-sovereign identities:</p>
<ul>
 <li>You are the sole owner of your data, not the third parties</li>
 <li>You can prevent different apps from tracking your online activities</li>
 <li>Nobody can spread your digital data without your consent or knowledge</li>
 <li>Share only the relevant information with an application or service</li>
</ul>
<p>You can securely store your DID and credential with encryption on your smartphone. There are no passwords with self-sovereign identities. Instead, the sign-ins are authenticated with cryptographic keys. It dramatically reduces the risk of hacking, unauthorized access, and browser tracking.</p>
<h3 id="strong-types-of-dids-strong"><strong>Types of DIDs</strong></h3>
<p>There are a variety of methods with different trade-offs. Ethereum, Polygon ID, SpruceID and many others are building self-sovereign identity solutions. Let’s take a look at the key types of decentralized identities:</p>
<ul>
 <li><strong>Non-custodial crypto wallets</strong>: You have full control over your private keys, which are used to verify transactions and prove ownership of a blockchain address.</li>
 <li><strong>Unstoppable Domains</strong>: It lets you buy and mint Web3 domain names that are yours to keep forever.</li>
 <li><strong>Soulbound tokens (SBTs)</strong>: The SBTs are basically non-transferrable NFTs that represent your digital persona in Web3.</li>
 <li><strong>Ethereum Name Service (ENS)</strong>: It allows you to create “.eth” domains that replace your public wallet address. With ENS, decentralized identifiers are recorded on public and immutable ledgers like Ethereum in the form of a smart contract address.</li>
</ul>
<h2 id="header-0"><strong>Closing thoughts</strong></h2>
<p>The decentralized identity (DID) ecosystem is evolving rapidly, and we’ll see many more identity solutions providers enter the space in the coming years. While giving users control over their data, the solutions need to ensure that the user isn’t deliberately hiding something like criminal history or credit score that a platform or service needs to know. As users gain more awareness about how valuable their data and its privacy is, the decentralized identity would become an integral part of our digital interactions.</p>

Your identity in the Web3 era: A noob’s guide to decentralized identity

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Other articles published on May 25, 2023

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