🕵️ [Analysis] Understanding Decentralized Identity - Richard Chen

The current system of passwords and social security numbers for identity is broken according to Richard Chen. Blockchain technology offers a solution by returning ownership of personal data to individuals, giving them the power to share and revoke data as they please. The two primary areas of development for decentralized identity are namespaces and attestations.

Namespaces are a key part of decentralized identity. Currently, blockchains use addresses, a series of numbers and characters, to identify users. With namespaces, these addresses could be mapped to unique human-readable names similar to how file storage or the domain naming system work. Ideally, the system would create a table that was secure, decentralized, and provided human-meaningfulness all at the same time. This runs against Zooko's Triangle, proposed by Zcash ($ZEC) CEO Zooko Wilcox, which claims that no digital name can achieve more than two of these properties. Despite Wilcox's claims multiple crypto projects are working to solve this issue including Blockstack's work to extend Onename, the Ethereum ($ETH) naming service, and Handshake.

Once a secure, decentralized, and human meaningful namespace is created it still isn't enough for a decentralized identity system. Attestations further enforce identity by ensuring that individuals are who they claim to be. By preventing impersonations, Attestations become the backbone of trust and reputation in a decentralized identity system. One solution being developed is a standalone self-sovereign identity product like those from uPort, Ethereum, and Civic ($CVC). In order to work these products require four essential features:

• An identity with some type of unique identifier, like a namespace
• Third-parties that can make claims about an identity
• The ability to ask a user for their identity
• A system to look up claims about an identity

While self-sovereign identity is desirable it comes with risks, like lost or stolen private keys. Regardless, strong identity solutions are needed for many new crypto-native features like on-chain governance and token curated registries.