Digital identity: Devil's Gate, Pass and Holy Grail

The identity issue is an important issue that hinders the development of the encryption world. The digital identity based on the blockchain is called the holy grail of the encrypted world, and the passport of the block world has a huge market space. It has been tried by hundreds of companies. At the same time, digital identity can also solve data security problems. Data leakage and abuse have become the door of devils who are increasingly threatening people's lives. This article takes you through the history of identity issues and the latest developments in blockchain digital identity.

We have entered a new world in which cryptocurrency is expected to play a key role in the global marketplace, and at the moment, traditional methods of identification have become bottlenecks. Traditional identity identification is a tool that enables citizens to capitalize on the current economic system and certify their contribution to society.

With the rise of the Internet, economic and data activities have moved to the online world and are held in the hands of several major platforms. Now, the main oligopolys are using data and identities to try to understand more clearly what services humans might or may not want in the future. Can humans trust the oligopoly, can the data they deliberately give to do evil?

First, the identity problem

The concept of autonomy has become more and more compelling. A person can protect his or her identity and data while using the economic system.

Open finance is an example of an economic system. The premise of open finance is that people from any jurisdiction can take advantage of open networks and have the ability to participate in finance.

However, millions of people are waiting outside the field to look for opportunities but are unable to participate. why? Because identity issues must be resolved before millions of people benefit from this open network.

Second, history and bottlenecks

The Cognitive Revolution inspired rationalism and improved human collaboration. Among the tribes, one of the earliest ways to exchange "trust" is through jewelry and tattoos. As the tribe expands, the ability to “trust” is strengthened, and the enemy has the ability to create jewels that can break through the boundaries of the “village”.

During the Roman Empire, technological progress in written records grew exponentially with the economy. They developed and created a written document system to identify and track home ownership, business or arrears. As the economy and population grow, so does the ability to expand trust.

In the late 19th century, the government published methods for photo identification and tracking of birth, education, ownership, or business documents.

At the same time, banks and merchants create lists of personal lending activity manuals. This list is shared within the town as a way to track borrowing. The increasing list has become a mandatory function for the establishment of a “credit bureau”. This new credit system tracks debt, payment history, credit history and credit usage.

The combination of photo identity, paper records and credit creates a modern identity system that is still in use today.

The system helps governments identify their citizens, their citizens' contributions, and how they integrate into society. And companies have the ability to “trust” and “participate” in economic activities for the foreseeable future. Finally, the system empowers citizens to participate in economic activities and integrate into society. However, with the invention of the Internet, modern identity authentication systems have begun to reach their breakthrough point.

Third, the birth of heterogeneous identity

Similar to the cognitive revolution, the Internet reduces coordination costs and motivates new user behavior. People are looking for newer and faster ways to do business, rather than relying on outdated systems. Whether it's looking for a home, sharing a trip, or connecting via social networking or working remotely, these platforms reduce coordination costs and build a huge network effect. This makes large platforms such as Google, Uber, Facebook or Microsoft a large data aggregator and knows more about its users.

Digital identities dominate because of the reliance of these larger platforms. This shift marks the birth of Heterogeneous Identity. Heterogeneous identity means that an identity can be divided into specific user behaviors. I break down my identity into three categories: traditional identity (government), trust proof network (Google, Facebook) and hosted identity solutions (Microsoft, Okta).

Web-based proof

We can group Facebook, Twitter, Google and Snapchat as examples of platforms for exchanging data services. When we use these platforms for free, they collect data such as usage, online behavior, and metadata so they can target relevant ads and services. These platforms aggregate enough data to become an "authentication" agent. With authentication, applications can easily track real users while providing access to data.

Therefore, in this respect, identity is not only a means of verifying individuals, but also collecting data about user behavior. This data is very useful in the hands of users, but it is dangerous in the hands of the platform. As we have seen, our online identity may be used by entities to deal with us like Facebook's "Cambridge Data Leak" scandal.

Managed identity solution

This is a management identity solution for enterprises under a closed IT network infrastructure.

Since the release of Windows NT, administrators have been able to use directory services that store identity and login information. Behind the directory service is the LDAP protocol, an open protocol that is used by most directory applications such as Microsoft's Active Directory.

This enables companies of any size to seamlessly synchronize user data and deploy applications, and to manage remote workers more easily based on cloud identity and a suite of cloud products.

Of course, this also enables hackers to deploy complex phishing attacks that compromise work credentials. As we saw in the recent Equifax case, valuable information could be hacked and endanger people's lives.

Fourth, the opportunity (heterogeneous 2.0)

As we all know, we have now reached the boiling point of "identity certification" in the computing era. We have expanded the Internet from 1 billion users in 2005 to 3.2 billion in 2019. How serious is this problem? A recent cybersecurity report from Shape Security shows that between 80% and 90% of people who log in to retailers' websites are hackers who use stolen data. For businesses and users, it is very dangerous to entrust their data to large companies. At the same time, the invention of the Nakamoto Satoshi consensus algorithm led to the growth of encryption economy, which also led to the “Cambrian explosion” from decentralized finance to identity authentication use cases. As Josh Wolfe said, “We must follow the natural order of progress.” So, we will be guided to an identity-based authentication solution based on encryption theory.

Today, the problem with blockchain-based identification systems is that they solve identity problems from a single perspective. This may apply to specific use cases, such as trying to remove beer from a vending machine. It cannot solve the ability to use economic systems such as open finance or games. For example, a person who borrows in Dharma needs a loan mortgage of up to 150%.

Now, imagine whether an identity-based solution can track "the speed at which a person can repay a loan over time." Underwriters can use this data to underwrite loans to borrowers at a lower cost.

Therefore, I think that the identity certification problem that entrepreneurs should solve should not consider the world we live in now, but should consider the world we will live in. As the economy develops, identity is also evolving, so projects should focus on future use cases.

V. Blockchain-based identity authentication

Decentralizing the future identity will be one of the most important issues, and hundreds of companies are working to solve this problem. Whether it is Microsoft, IBM, RSA from traditional enterprises, or Blockstack, Coinbase, Uport from the encryption industry. In the end, we will see several platforms win, because we will live in a more decentralized world. Our identity will be further separated according to different use cases.

We need to rethink our identity: not as a way of identifying our identity, but by our contribution to the agreement or the economy. This can encourage good deeds while reducing bad behavior.

This will create some “worker” economies in which there are no identified workers, but everyone in the economy will have the same effect on the overall economy. This may be the world we will live in the future, but to make it happen, we need to understand the types of solutions available and quantify the impact.

Decentralized network verification

Decentralized network authentication enables users to authenticate to other applications or services without having to give up personal information.

Interestingly, Coinbase recently acquired a distributed system that is building identity solutions for the Clear Protocol.

The premise of this acquisition is that most of today's identity solutions are boring: you have to download Chrome extensions, create wallets, recharge your wallet, sign deals… these are one of the biggest obstacles. With more than 20 million real-identity users, Coinbase has a wealth of identity data that can be used in new areas such as decentralized finance.

Coinbase plans to launch a Facebook-like development kit that allows other dApps and services to seamlessly integrate with it, reducing friction and allowing users to seamlessly migrate between dApps and services. From a developer's perspective, it's easier to get and retain users while focusing on growth. This will change the identity from "verify personal information" to "verify personal information and money." This shift will bring new applications and services that will create new business models for cryptocurrencies.

Ecosystem approach

Blockstack's vision is to allow users to authenticate only once, without having to authenticate again while browsing the Internet. They have four components that enable users to seamlessly authenticate and protect data.

The first component is the Stacks Blockchain, which provides a global consensus for the network. A user can purchase a username, perform a smart contract function, or connect to a memory with its stack token.

The second component is the Gaia storage system, which stores all your data in an encrypted private data store. This storage can be hosted on your hard drive or cloud provider.

The third component is the protocol itself, which is used to verify the identity owned by the user and the location of the Gaia storage.

The fourth component enables developers to easily integrate the Blockstack development kit into their core applications, allowing for seamless login functionality.

The Blockstack team is taking a way to build the entire stack of the blockchain itself into an end-user experience, while taking into account identity authentication.

Protocol based approach

Microsoft is introducing an open standard for identity overlay networks (ION). ION is an open protocol built on top of the Bitcoin blockchain. The ION network is a batch layer of communication used to manage and anchor decentralized identity authentication (DID). The DID is an immutable document, represented by a unique ID, and can store the user's personal information.

Microsoft chose to build a Layer 2 solution to maximize throughput and avoid using consensus algorithms. It enables developers to build scalable solutions while providing common deterministic state resolution.

Companies such as Cloudflare can run ION nodes and seamlessly anchor data to the Bitcoin blockchain and charge the end user a nominal fee.

Other solutions

Formatic is developer-centric and provides developers with the tools to make dApps seamlessly support users. They do this by allowing users to log in and use the dApp using only traditional phone numbers. This approach reduces friction and allows users to quickly connect to the dApp. It also allows users to protect their personal information as they move between different applications and services. So far, they have integrated with OpenSea, Set Protocol, Zerion and more.

Uport is also an interesting solution built on the Ethereum agreement. It provides a self-service wallet and single sign-on service for dApp. It allows for seamless integration of applications in Web 2.0 and Web 3.0, while providing the ability to publish and reuse credentials. They have apps on iOS and the Google Play Store that work with MeleonPort, Gnosis, Status, and more.

Humanity Dao is an identity solution based on a decentralized autonomous organization. This is the first identity system to integrate governance and universal base revenue into the authentication process. Using an identity system that is regulated by its users may have an interesting value proposition. We are in the early stages of the development of Humanity Dao, but I am optimistic about its founder.


As technology and society advance, our ability to identify and certify identities is also increasing.

Our data is the most valuable asset we have; we can control our data and make informed decisions that will benefit our future.

The era of computing provides us with an opportunity to make applications and services help improve society; but it also has a huge room for improvement. When we move from the computing era to the era of machine intelligence, blockchain-based identity solutions are essential.

I believe that identity-based solutions will become more sophisticated and focus on economic use cases such as open finance, gaming and/or markets.


Author: Imran Khan Translator Profile: Philharmonic cattle, block chain Yanxishe contributing author. Disclaimer: This article is the author's independent point of view, does not represent the position of the Blockchain Institute (Public Number), and does not constitute any investment advice or advice. Original link:

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