Decentralized Technology and Verifiable Credentials: A Comprehensive Guide
In the digital age, establishing trust online is a significant challenge. Traditional methods of verifying identity often involve the exchange of sensitive personal information, leading to privacy concerns and potential data breaches. However, a new approach to digital identity is emerging, one that prioritizes privacy, security, and user control: Verifiable Credentials.
Understanding Verifiable Credentials
Verifiable credentials (VCs) are the digital counterparts of physical documents. They are standardized certificates issued by an entity that certifies the authenticity of data related to an individual. These credentials can be securely shared online, with the information contained being fully verifiable and secure, thanks to the use of blockchain technology.
A verifiable credential is composed of three elements encoded in a simple JSON file:
· Metadata: Encrypted information about the credential, including the identifier of the entity issuing it, that of its holder, the dates of its creation and expiry, and so on.
· Declaration: Data that the holder of the credential wishes to share, such as their identifier or identity, education diploma, qualification, or other types of formal documents.
· Proof: Data relating to the identifier, or identity, of the holder of the credential that allows the verifier to verify the authenticity of the shared data.
For a certificate to be recognized as a verifiable credential, it must conform to the specific standards of the World Wide Web Consortium (W3C) in its W3C Verifiable Credentials Data Model specification.
Verifiable Credentials Diagram
How Verifiable Credentials Work
The technology of verifiable credentials operates in a decentralized manner, involving a system of trust between three different parties: the issuer, the holder, and the verifier.
· The Issuer: This is the entity that issues the verifiable data concerning an individual. This could be a government agency, a school or university, a medical center, a banking institution, or any other authorized entity.
· The Holder: The holder of the digital credential issued by the issuer is usually an individual, but it can also be an organization. The holder is the sole owner of the issued verifiable credential and has full control over its handling, use, and verification.
· The Verifier: Any subject that requests a digital certificate from its holder is called a “verifier”. By automated means, this entity obtains proof that the verifiable credential has been issued by an authorized institution, that the document or its data has not been modified, and that it has not expired.
The blockchain model securely stores all the proofs of authenticity, identifiers, and signatures relating to verifiable credentials. This decentralized database ensures their permanent, tamper-proof nature, ensuring that nothing incorporated into it can disappear or be modified over time. This technology facilitates and guarantees the exchange of the data of all its users, making it possible to establish relationships of trust between issuers, holders, and verifiers of digital certificates.
Decentralized Identifiers (DIDs)
In the verifiable credentials system, the issuer, holder, and verifier are required to use Decentralized Identifiers, or “DIDs”. A DID is a secure identifier created by or for the user that guarantees their identity when they request or share a verifiable credential. DIDs work using advanced cryptography and are often registered in a trusted registry for ease of use and security.
The Future of Digital Identity
Digital credentials offer a more efficient, fraud-resistant, and reliable alternative to traditional systems. They are generated using secure technologies, such as distributed ledger technology, and protected by cryptographic key pairs, facilitating data privacy while also enabling virtually instant verification.
Digital credentials put individuals in charge of their digital identity. They can be used in various sectors, including healthcare, government services, insurance, and retail. They reduce dependency on issuing institutions for validation and allow individuals to share all or only part of the information contained in the credential, reducing unnecessary data exposure and removing opportunities for identity theft.
Decentralized Identifiers and Blockchain
Decentralized Identifiers (DIDs) are digital information about you, in a specific form, which you can issue, manage, and store yourself, and use to prove facts about yourself to other parties. They are used to obtain Verifiable Credentials (VCs) that add credibility to your DID and deliver proof of various aspects of your identity.
Blockchain forms the basis of the trusted ledger where the proof of transactions of issuing these credentials can be stored. Once the Verifiable Credentials are issued, the fact of this transaction can be connected to and stored on the ledger. The ledger doesn’t contain the credentials. Those are stored by the individual and can be shared at their discretion. The ledger only contains the proof of the transaction, which can be used to verify the authenticity of the credentials when they are presented.
The Role of Blockchain in Verifiable Credentials
Blockchain technology plays a crucial role in the issuance, verification, and storage of verifiable credentials. Here’s how:
· Issuance: When an issuer creates a verifiable credential, a transaction is made on the blockchain. This transaction includes the credential’s metadata and a cryptographic proof, but not the credential’s data itself. This ensures that the credential’s data remains private and under the control of the holder.
· Verification: When a holder presents a verifiable credential to a verifier, the verifier can check the blockchain to confirm that the credential was indeed issued by the claimed issuer. The verifier can also confirm that the credential has not been revoked and that it has not been tampered with, thanks to the cryptographic proof stored on the blockchain.
· Revocation: If a verifiable credential needs to be revoked (for example, if it was issued in error or if the holder’s status changes), the issuer can make another transaction on the blockchain to indicate this. Verifiers can then check the blockchain to see if a credential has been revoked.
· Storage: While the verifiable credentials themselves are not stored on the blockchain, the blockchain provides a secure, tamper-proof record of their issuance and revocation. This allows any verifier to independently verify a credential’s authenticity without needing to contact the issuer directly.
The Benefits of Decentralized Technology and Credentials
The use of decentralized technology and credentials offers several benefits:
· Privacy: Holders have complete control over their credentials and can choose what information to share and with whom. This is a significant improvement over traditional systems, where personal data is often stored in centralized databases that can be vulnerable to hacking.
· Security: The use of blockchain technology ensures that verifiable credentials are secure and tamper-proof. The cryptographic proofs stored on the blockchain allow verifiers to confirm a credential’s authenticity without needing to trust the holder or the communication channel through which the credential is shared.
· Efficiency: Verifiable credentials can be issued, shared, and verified digitally, making the process much faster and more efficient than traditional methods of identity verification. This can be particularly beneficial in sectors such as healthcare and education, where verifying a person’s credentials can often be a time-consuming process.
· Interoperability: Because verifiable credentials are based on standardized data models and protocols, they can be used across different sectors and systems. This makes them a versatile tool for digital identity management.
SourceLess: A Leap Forward in Digital Identity Management
“Every time a website asks us to create a digital identity…we actually have no clue what happens to our data, and this has to stop.” (Ursula von der Leyen President of the European Commission)
SourceLess is a platform that leverages the power of Verifiable Credentials to create a more secure, private, and user-friendly digital identity system. At the core of SourceLess’s technology are STR domains, unique identifiers that can replace traditional login methods.
Instead of using an email address or social media account to log into a website, users can use their STR domain. This approach, among other benefits, offers two key advantages:
· Anonymity: With STR domains, users can stay anonymous when logging in. There’s no need to share an email address or any other personal information, reducing the risk of data breaches and identity theft.
· Confidentiality: STR domains also promote confidentiality. For example, if a user makes a purchase, they don’t need to provide any personal data. The transaction can be verified using the STR domain, keeping the user’s information private.
By integrating Verifiable Credentials and STR domains, SourceLess is pioneering a new era of digital identity, one where users have control over their own data, and trust is built on robust, secure technology.
For more information visit SourceLess.io
