Cyber Security

Decentralized digital identity: understand what it is and how it works

Today the world is undergoing a transformation in the way data and any personal information of users on the internet are collected. With the LGPD , they now have more rules and security for citizens, but many companies felt harmed by not acting in accordance with the law. However, although it is a challenge, there is already a viable way around these obstacles, as is the case of decentralized digital identity (DCI) . 

You may have never heard of this term, but it is already present in many ways without you knowing it.

In this context, the Decentralized Digital Identity, made possible by blockchain technology, is configured as a necessary digital transformation.

It works from the blockchain, that is, through tokens that record essential user information and transactions, and all of this in one place .

Its use facilitates both companies and users themselves when making purchases or having contact with organizations without running the risk of cybercrime , as their data is being used without transparency.

It is a subject that may seem complex, but in this article we are going to demystify it for you. Continue reading and discover the main points about this technology called decentralized digital identity.

What is decentralized digital identity?

It is nothing more than a structure responsible for storing, validating and guaranteeing access to electronic data by the user , providing greater control over their virtual information and their transactions with companies. 🤝

In other words, it is a tool created to facilitate the identification of people , but in a more secure way in which the data subject himself has control of what is being shown and collected. 👦

The idea is as if each user on the internet had their own digital “wallet” with all their identity credentials provided by authorized issuers, be it the government or their employer.

It is worth noting that this method only exposes the information that the user authorizes.

Soon, its emergence occurred as a solution for more than 83% of people’s data that were kept in a company without their authorization, with which they interacted only once in their lives.

How does it work in practice?

If before performing a virtual authentication on each site, a login and password or social network profiles were required, now with DCI that changes.

Instead, the agents involved uniquely register cryptographic keys associated with personal data, choosing how to use it and which data they want to reveal in each transaction or online connection.

That is, all your documents are protected in secure digital wallets that are controlled by you and in a single application .

Decentralized Digital Identity. Source: Getty Images.

Thus, for its operation there are three actors in the process , they are:

  • Issuer : is the record presented, the credential. Usually it is a legal entity that will register on the blockchain network by placing the decentralized identifier in its registered public key;
  • User : is the person who stores and receives the issuer’s record, who will create your public and private key, digitally signing your decentralized certificate and storing your credentials in a secure digital wallet.
  • Verifier : is who analyzes the data issued. He also has a public key and is responsible for receiving proof of user credentials and validating data.

In this way, by correlating these three essential roles, it generates a blockchain network, that is, decentralized identifiers, verifiable credentials and cryptography.

Features of decentralized digital identity

Some specific characteristics and principles define the structure of the Decentralized Digital Identity, such as:

  • Users with control over their identity;
  • Greater access, as the identity is available at all times, without interference in case of server instability;
  • Greater transparency for the user to know how the data is used and by whom;
  • Persistence, because the credential continues to exist;
  • Portability of information can be used for various systems and services;
  • Interoperability of data being interpreted by other services;
  • Consent, as it requires the user to allow or disallow data sharing;
  • Minimization with less bureaucracy in virtual processes;
  • Data protection.

Where to use?

Thus, it starts to be used as validation in several situations, such as hotel check-in, a consultation with the doctor, a soccer game or at the entrance to a concert, as if it were an RG, CPF or vaccination booklet.

With the requirement of the vaccine passport, for example, to enter many countries and events with a large number of participants, verification of personal data has become necessary. This increases the difficulty of controlling personal data.

DCI improves and ensures this, being a solution to this nuisance.

What are the benefits of decentralized digital identity?

Using the DCI tool is extremely beneficial on all fronts, especially when it comes to information security and privacy of digital data.

When we talk about people, it allows for more control, autonomy and transparency in relation to their data. As for organizations, it makes it possible to minimize risks in interactions with users, as well as speed up electronic verification of data and optimize information auditing.

Examples of companies using decentralized digital identity

One example is Microsoft itself , which recently released Azure Active Directory verifiable credentials. It is a decentralized and secure identity system based on the same blockchain technology used in cryptocurrencies such as Bitcoin.

And with that same idea, other organizations are investing in this method, such as Simply , an automation technology company.

How to learn more about cybersecurity?

Therefore, the Decentralized Digital Identity (DCI) came to be disruptive in transactions between companies and users, prioritizing cybersecurity .

With it you perform any action or your company collects any data in a more agile, practical way and without security or transparency risks.

Cybersecurity is something that is all the rage and should always be invested in anything in today’s digital environment.

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