The Top 5 Decentralized Identity Solutions
Decentralized identity solutions provide users with control over their digital identities, allowing them to securely manage and share personal information without reliance on a central authority.
Written by Caitlin Harris
Technical Review by Laura Iannini
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1.
IBM Blockchain for Digital Credentials
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2.
Microsoft Entra Verified ID
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3.
Midy
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4.
Nuggets Decentralized Identity Super Wallet
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5.
PingOne Neo
Decentralized identity solutions are designed to give users full control over their digital identities, ensuring privacy and security, while reducing reliance on centralized identity authorities (such as the government and vehicle licensing agencies). Decentralized identity solutions leverage blockchain technology to create a distributed network where identity data can be securely stored, shared, and verified. This minimizes the risk of identity-related cyberattacks and fraud, whilst fostering improved interoperability and empowering users to take control of their data.
Decentralized identity solutions are gaining traction across industries such as finance, healthcare, and government services due to their ability to eliminate single points of failure, reduce identity theft, and facilitate secure, privacy-preserving transactions. They provide a flexible ecosystem where users can create, store, manage, and share their credentials, without having to rely on a centralized identity provider. Instead, users have their own wallet of encrypted identity information, which they can choose to share with service providers as needed.
In this article, we’ll explore the top decentralized identity solutions designed to help you support the use of decentralized identity amongst your organization’s employees and customers. We’ll highlight the key use cases and features of each solution, including use of open standards, use of blockchain technology, support for verifiable credentials, and integration with other services and applications.
IBM Blockchain for Digital Credentials
IBM Blockchain for Digital Credentials is a solution that leverages blockchain technology to enable fast and secure identity verification processes. Individuals can curate their own profiles while controlling data sharing, and issuers can connect easily with others for virtually instant credential verification. This platform fosters trust for all participants, as identity information becomes auditable, traceable, and verifiable within seconds.
IBM Blockchain for Digital Credentials ensures privacy and security by handling infrastructure and security without exposing any data used to generate credentials. Access is granted only to authorized network participants, and all actions and business processes are tamperproof. The platform can permanently capture blockchain transactions. The platform is built with flexibility in mind, adhering to the guiding principles of open standards and interoperability. It works seamlessly with credentialing solutions worldwide, promoting trust through wallet-to-wallet and enterprise system transactions. Organizations can create their own solution or join existing networks and customize them using tools of their choice.
IBM’s Digital Credentials utilize W3C open standards for decentralized identity and support various blockchain technologies to issue and verify credentials across industries and use cases. Overall, the platform offers a secure way to issue tamper-proof, verifiable credentials, instantly verify a credential’s authenticity and validity, exchange credentials through secure verifiable presentations, and revoke credentials without revealing sensitive information.
IBM Blockchain for Digital Credentials
Microsoft Entra Verified ID
Microsoft Entra Verified ID is a digital identity solution included in any Microsoft Entra ID subscription. It enables businesses to efficiently onboard employees, partners, and customers by validating identity information for trustworthy self-service enrollment. With Entra Verified ID, organizations can grant least-privilege access to high-value applications and resources by verifying individuals’ credentials and status.
Entra Verified ID simplifies the credential verification process, enabling the issuance and verification of workplace credentials, citizenship, education status, certifications, and other unique identifiers in a global ecosystem. The solution supports open standards to ensure interoperability and reusability of credentials across various platforms. Account recovery is made easier through a streamlined self-service process, replacing support calls and security questions.
Setting up and deploying Entra Verified ID is straightforward using the Microsoft Entra admin center portal. Organizations can create and issue customizable verifiable credentials using prebuilt templates or in-house designs and rules, and credential verification is privacy-friendly, as the approval is obtained through individuals’ digital wallets. Furthermore, businesses can revoke or suspend the verified status of credentials, enabling invalidated credentials to remain in possession of their respective owners.
Microsoft Entra Verified ID
Midy
Midy, formerly known as Evernym, offers a digital wallet solution that allows users to securely store and manage their personal data. Users can download the Midy app, available on App Store and Google Play, in which they can store identity data and choose which service providers they would like to share them with. Upon account creation, users secure their account with a passkey, and only provide an email address or phone number for account protection and management purposes.
Users can generate their first digital credential by scanning a government-issued identity document, such as a passport or license. This digital credential allows individuals to instantly share a proof-of-real-human trustmark for authentication purposes. To keep identity information secure, the Midy app utilizes biometrics and requires user consent for any data sharing. All the time, users maintain full control and have the cryptographic keys to their digital wallet for security purposes.
Incorporating Privacy by Design, Midy uses cryptographic pseudonyms to ensure users’ personal privacy. Midy also prioritizes Security by Design, backed by an advanced cybersecurity team working to protect users from cyber threats. Overall, Midy’s digital wallet technology allows for seamless, secure, and manageable personal data storage and use.
Midy
Nuggets Decentralized Identity Super Wallet
Nuggets is a leading identity super-wallet that offers verified, self-sovereign, decentralized identity for enhanced privacy and security. Designed for use across Web2 and 3, DeFi, and Metaverse projects, it enables interoperable and reusable identity with merit-based reputation. In addition, users have control over their data for services and applications, with speedy approvals and seamless onboarding.
The Nuggets decentralized identity platform allows secure transactions with verified identities at both ends, making illegitimate transactions nearly impossible. Privacy is maintained using encryption, zero-knowledge proofs (ZKPs), and blockchain technology, with customers verifying their identity through biometric data, eliminating the need for usernames and passwords.
Nuggets offers smooth experiences across all devices, and a merit-based reputation system that follows users everywhere, such as online shopping, DAO voting, or participating in Metaverse projects. In terms of security, users’ data and verifiable credentials are stored in a secure digital cloud vault only accessible by the user themselves. The platform supports compliance with regulations such as BSA FATF, KYC, and AML through self-sovereign auditable nuggets and ZKPs. IT also adheres to open standards including W3C Verifiable Credentials (VCs), Decentralized Identifiers (DIDs), and DIDComm Messaging (DIDComm), enabling global interoperability. Finally, Nuggets enforces bank-grade security measures and certifications to provide users with the highest level of protection for their data.
Nuggets Decentralized Identity Super Wallet
PingOne Neo
PingOne Neo is a digital identity solution that focuses on identity verification, digital credential issuance, and verification. The platform enables organizations to instantly confirm the identity of users, saving time and reducing costs related to issuing physical credentials and managing personal accounts. Neo helps prevent fraudulent transactions and halt account takeovers, while quickly establishing trust by allowing users to control their verified information.
With PingOne Neo, the process of obtaining and using verified credentials is streamlined and secure. It can request credentials from an issuer or service provider, create cryptographically signed verifiable credentials, store these credentials in the user’s digital wallet, and present only essential data for transaction purposes. Neo ensures that only necessary information is provided during transactions, in line with data minimization requirements. For instance, if age verification is needed, Neo will only present that specific detail rather than the user’s full driver’s license.
PingOne Neo benefits organizations by facilitating verification of users’ credentials, enhancing security to reduce fraud and account takeovers, minimizing regulatory risks by gathering and protecting only necessary user data, and increasing privacy for users as they only need to share relevant information. Overall, Neo provides organizations with a cost-effective, secure method to enable their customers to interact online and in-person without the need for traditional backend integrations.
PingOne Neo
FAQs
Everything You Need To Know About Decentralized Identity Solutions (FAQs)
Decentralized identity is an identity management and verification approach that uses blockchain and cryptography to give the end user or consumer control of their own identity, without them having to rely on a specific identity service provider (i.e., a “centralized” authority).
In a traditional, centralized identity system, a centralized authority controls the user’s identity data. This data is usually stored in a database, which makes it vulnerable to cyberattacks. It also gives the central authority complete control over the user’s identity, which can cause privacy concerns if the authority doesn’t always use the identity data with permission, or for legitimate reasons.
In a decentralized system, however, the user’s identity data is stored on a distributed network, making it much less susceptible to cyberattacks. Additionally, users have the power to manage their own digital identity and, in turn, their own privacy. To achieve this, users each have a digital identity “wallet” in which they can collect information about themselves from certified identity issuers (for example, the government). When a third party requests proof of identity, the user can then control what information they share from their wallet. For example, they could prove that they’re over 18 without sharing a document containing their full name, address, and other details.
It’s important to note that decentralized identity is not the same as a federated identity or single sign-onapproach to identity and access management. These approaches use a centralized identity service to share user identities across multiple different applications. While a decentralized approach also enables a single identity to be accessed by different applications and services, there is no centralized authority involved.
Decentralized identity solutions enable organizations to authenticate the identities of their users and customers using a decentralized approach. They are usually built on Distributed Ledger Technology (DLT), such as blockchain, which provides identity validation, traceability, and documentation. It also means that identities are stored on a distributed network, rather than in a central database, which makes it much more difficult for a cybercriminal to steal identity data as they’d have to compromise multiple network nodes, rather than a single point of failure.
Decentralized identity solutions are made up of four key elements. Let’s take a look at them. Distributed Ledger Technology (DLT)
Decentralized identity solutions use Distributed Ledger Technology (DLT), such as blockchain, to create a distributed, trusted network where identity data can be securely stored, shared, and verified. With blockchain, this network comprises a chain of “blocks” that contain information about all the transactions across the network, including decentralized identifiers (more on these later), proof of credentials issued, public cryptography keys used to encrypt and decrypt the data, and revocation registries. Once a block is added to the chain, it’s incredibly difficult to change the information it contains, making it highly secure and transparent. This means that everyone in the network can trust that the user’s identity data is valid and authentic.
Note: users’ identity information isn’t stored on the blockchain, but in their digital wallet—which brings us to the next component of a decentralized identity solution…
Decentralized Identity Wallet
The identity wallet is an app that allows users to create their decentralized identifiers and manage their verifiable credentials. With this wallet, users can choose what identity information they want to share with any third parties requesting validation, including which verified credentials to share, what details to give out, and how long the information is valid for.
For security, all the data stored in a digital wallet is encrypted.
Decentralized Identifier (DID)
Decentralized identifiers are a means for users to identify themselves without the input of a centralized authority. Stored on the blockchain, DIDs are unique digital IDs made up of a string of letters and numbers that indicate the user’s identity. DIDs contain information such as public key and verification information, and no two DIDs are the same.
Verifiable Credential (VC)
A verifiable credential is a digital, encrypted version of credentials (i.e., a digital certificate) that users can present to third parties that want to verify them. There are three parties involved in any VC process:
- The holder is the owner of the identity. They use their digital wallet app to create a decentralized identifier and receive a verifiable credential, which they can choose to share with whom they want.
- The issuer is a third-party organization that issues the holder a credential (e.g., a driver’s licensing authority). The issuer’s public DID and public key are on the blockchain. When the issuer wants to provide the holder with a credential, they sign the VC with their private key. Holders can then add that VC to their digital wallet, usually by clicking a link sent to them by the issuer or scanning a QR code.
- The verifier is a third party that the holder is trying to interact with (e.g., a car rental agency that the holder wants to rent a car from). The verifier checks the holder’s credentials, and checks the blockchain to verify that the correct issuer did in fact issue the credential.
Decentralized identity solutions may seem complex, but they offer a wealth of security, privacy, and operational benefits—for both end users and organizations.
Here are some of the main benefits of implementing a decentralized identity solution:
- Privacy: Decentralized identity gives users more control over their personal data, including who has access to it at any given time. It also allows them to share only the data needed to prove their identity; for example, they can prove that they’re over 18 without having to share a document with their full name and address on it. This supports the privacy principle of data minimization, which encourages organizations to collect only the data that is required to accomplish a specific purpose.
- Security: With a decentralized identity solution, the data is stored in a distributed network, rather than a centralized location. This makes it much less vulnerable to cyberattacks than when using a centralized identity solution, as it removes the single point of failure. In addition, all data is securely encrypted, rendering it tamperproof and completely illegible to unauthorized third parties. Finally, because blockchain makes it easy to track and verify transactions, businesses face less risk of fraud.
- Cost-effectiveness: Without the need to pay a central authority to manage identity data, decentralized identity solutions can be more cost-effective than centralized identity methods. They also reduce the infrastructure and maintenance costs involved with traditional identity management systems.
- Compliance: Decentralized identity solutions can help organizations comply with data protection and privacy regulations by providing users with more control over their data, including processes such as consent management.
- Reputation: The transparent and secure nature of decentralized identity solutions can help foster trust between users and service providers. If your organization enables users to sign up using a decentralized identity, you’re showing a dedication to their privacy and their agency over their own data.
- Speed and efficiency: Decentralized identity solutions enable organization to verify users’ credentials without having to contact the issuing party or a third-party identity provider to ensure that the user’s ID is valid. This speeds up the process of verifying identities for organizations, and provides end users with a seamless sign-up or login experience.
- User-friendliness: A decentralized approach can hugely improve the user experience of signing up to new services by eliminating the need to fill out forms that all need the same information (name, email address, phone number, etc.,). Instead, the user simply selects a card from their wallet and shares it in a trusted, readable format. By using decentralized identity, developers can also build applications that don’t rely on passwords to verify users. (Note that, for this benefit to be fully realized, there needs to be more widespread adoption of this technology so that users can share their VCs with a larger number of service providers.)
Written By
Caitlin Harris is Deputy Head of Content at Expert Insights. Caitlin is an experienced writer and journalist, with years of experience producing award-winning technical training materials and journalistic content. Caitlin holds a First Class BA in English Literature and German, and provides our content team with strategic editorial guidance as well as carrying out detailed research to create articles that are accurate, engaging and relevant. Caitlin co-hosts the Expert Insights Podcast, where she interviews world-leading B2B tech experts.
Technical Review
Laura Iannini is an Information Security Engineer. She holds a Bachelor’s degree in Cybersecurity from the University of West Florida. Laura has experience with a variety of cybersecurity platforms and leads technical reviews of leading solutions. She conducts thorough product tests to ensure that Expert Insights’ reviews are definitive and insightful.