Long ago, identity was simple. People lived in small communities, and identities were tied to families, skills, and reputations. Trust came from personal relationships and face-to-face interactions.
As society advanced, formal identification documents like passports, driver's licenses, and social security numbers became essential. These IDs were issued top-down by centralized authorities, facilitating travel, employment, social services, and financial transactions. An early example around 1414 is King Henry V issuing passports for citizens going abroad.
The digital age transformed identity. People created virtual identities through social media, email, and online services. This led to data silos controlled by large tech companies, where users traded privacy for convenience. Digital identities became fragmented across platforms with different rules and privacy policies. Tech companies are not inherently malicious but the systems have bias for profit. Monetization of user data, targeted advertising and user influence became rampant. People's digital identities became fragmented and scattered across numerous platforms, each with its own set of rules and privacy policies.
To address centralized identity and data silo issues, Decentralized Identifiers (DIDs) and Verifiable Credentials (VCs) emerged. DIDs empower individuals to control their digital identities without relying on centralized platforms and Tech companies. In this space there are both on-ledger and ledger agnostic solutions, catering to different identity ecosystem needs.
Ledger Based Solutions
On-ledger solutions, often blockchain-based, provide a transparent and immutable record of identity transactions. They're useful for global or system-specific identifiers, like government-issued documents, professional certifications or accessing a network specific utility. Most DID methods are on-ledger, with only around 8 being ledger-agnostic.
Ledger Agnostic Solutions
Ledger agnostic solutions, like PEER or KERI, are off-chain and facilitate peer-to-peer interactions, resembling early human society's identity function. Off-chain DIDs can offer direct control over data and privacy, with less friction and fees. Among these ledger agnostic solutions, KERI seems most promising.
Our Perspective
Both on-ledger and off-ledger approaches to DIDs have their strengths and potential use cases. These solutions can coexist and complement each other, creating a resilient and inclusive identity ecosystem. It's our view that off-chain Identity best mimics our needs as individuals for most of our interactions. We believe that off-ledger first can help us avoid silo-ing or centralizing our otherwise peer interactions as we did in Web2, improving the odds for a better human experience. Instead we can work towards a future where digital identity management is flexible, secure, and tailored to the diverse needs of individuals and specific use-case.
While KERI presents a promising solution, it is not yet fully matured. There are many leading minds working in this space and we believe an off-ledger solution will evolve in alignment with our values. Few however, are focused on innovating equitable SSI business models and bringing users into the space. This is our focus. We will mimic the eventual functionality of off-ledger DID/VC using simple encryption flows to establish a user-stored, privacy-first approach to identity management. While KERI or other suitable solutions are developing toward maturation, we will focus on building value at the application layer and bringing users to these new SSI driven models. When ready, we plan to converge our efforts with the best-aligned technologies to create a responsible and human-centered digital identity ecosystem.
Data Silos: a store of information (usually yours) that is controlled by a central party (usually not you) and is only accessible through a specific platform or ecosystem.
DID (Decentralized Identifiers): W3C specification defining a new type of identifier that enables verifiable, decentralized digital identity. Here's a video walkthrough on DIDs and VCs.
VC (Verifiable Credential): W3C specification defining a way to express credentials (e.g. driver's license) in a cryptographically secure, privacy respecting, and machine-verifiable way.