What is Decentralized Identity?

Decentralized identity is gaining traction globally through diverse implementations and aligns with SpruceID's mission to empower users with control over their data.

What is Decentralized Identity?

Decentralized identity is rapidly gaining momentum as an industry concept, with a growing number of live implementations. Its early roots were in pioneering projects like uPort, appearances at IIW, Microsoft’s subsequent bet, and its emergence as a hot topic at industry conferences like Identiverse and EIC. We see it in practice globally in the California DMV Wallet, the European Union Digital Identity initiative, and even digital pioneers like Bhutan

It’s easy to get confused because “decentralization” has become a buzzword for many new technologies. While its source of decentralization doesn’t need to come from blockchains or cryptocurrencies, decentralized identity is ultimately aligned with the objective of returning control to end users.  

At SpruceID, we think about decentralized identity as systems built using the issuer-holder-verifier model, which achieves decentralization when open protocols are used such that any party can assume the role(s) of the issuer, holder, or verifier. These roles come with a clean separation of concerns that mitigate undesirable side effects, such as issuer “phone home” during holder usage. These systems can support either functional (“attributes”) or foundational identity. So, it’s decentralized in that we’re not forcing all digital identity-related interactions through one central control point; instead, peer-to-peer interactions are the default.

Starting with this definition, it’s easier to evaluate technical standards based on their core ability to support these interoperable capabilities, rather than indexing on affiliation with certain brands or use cases. For example, all the digital credential technologies mentioned in the EU ARF, including W3C Verifiable Credentials, SD-JWTs, and ISO/IEC 18013-5 mobile driver’s license (mDL), can fit this definition of supporting decentralized identity depending on the implementation details. These can all also violate the definition depending on implementation details.

It’s worth noting that identity and credentialing systems are already more decentralized than you might realize. Even in the United States, DMVs do not have a monopoly on all forms of identification: other documents, such as passports or permanent residency cards, are widely accepted. Even utility bills and bank statements often play a role in verifying identity. 

If we start with a decentralized landscape, a decentralized approach to the technology seems to make the most sense. Open digital standards for sharing this already broad plethora of credentials largely amount to bringing existing credentials together under one umbrella and opening the playing field for other issuers, whom verifiers can choose to trust or not, on a case-by-case basis.

Already, verifiable digital credentials issued across state and federal bodies fall under different administrations, many of which don’t see eye-to-eye, even within the same agency. This doesn’t even scratch the surface of the complexities within the private sector—and an open system is the best way to accommodate that complexity. 

Here at SpruceID, we believe the use of decentralized identity, under this definition, furthers our mission to let users control their data across the web (and beyond). We will continue to evaluate technologies and technical standards to ensure alignment with these capabilities and our organization’s values. 

To learn more about how we are working to build decentralized identity, visit our knowledge base.

About SpruceID: SpruceID is building a future where users control their identity and data across all digital interactions.