How Does Decentralized Identity Work? The Following Are the Key Elements of Decentralized Identity

Bittime - How does Decentralized Identity work? And what are the key elements involved in forming a Decentralized Identity? This is certainly important to explore.

In principle, Decentralized Identity provides a wider but safer privacy space for users.

What is it like and how does Decentralized Identity work? Check out the explanation of the key elements involved in how Decentralized Identity works in the following article.

What is Decentralized Identity?

Before reviewing how Decentralized Identity works, it would be good if we first explore what Decentralized Identity means.

Decentralized Identity or in Indonesian can be absorbed as Decentralized Identity is a type of identity management that allows someone to have control over their own digital identity without having to depend on a particular service provider.

Also Read: What is Civic (CVC)? The Future of Digital Identity

For the record, digital identity is a kind of collection of information related to individuals, organizations and electronic devices that is available online.

The data that then forms a digital identity includes:

1. Username and password
2. Search history
3. ID card number
4. Purchase records

Verifiable proof of existence or identity is often required for the identity holder to exercise their rights as a citizen to access essential services such as health, banking and education. 

Unfortunately, 1 billion people in the world do not have official proof of identity. With a decentralized identity system, all people need now is an internet connection and smart devices that are easily accessible in developing countries.

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The Importance of Decentralized Identity for Individuals

After understanding the meaning of Decentralized Identity, it turns out that Decentralized Identity helps us to be able to manage our digital identity freely, something that is no less important to explore is the importance of Decentralized Identity, especially for individuals.

At a practical level, Decentralized Identity allows someone to:

1. Full data control
2. Prove any claim without relying on any party
3. Prevent device and data tracking while browsing websites
4. Choose who you want to share relevant information with
5. No entity can retrieve a decentralized identity once it is stored in a mobile digital identity wallet 
6. Prevent the distribution of data without other people's knowledge.

Decentralized Digital Wallet Implementation

The next thing that needs to be understood before reviewing how Decentralized Identity works is the implementation of a decentralized digital wallet which will be an important instrument.

Decentralized digital wallets can be used on mobile phones to store your digital identity and credentials with encryption . 

This approach hides data greatly reducing the risk of credential tracking, hacking, and gaining unauthorized access to steal or monetize people's data. 

With decentralized identity, a person must provide authorization to share information when requested.

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Hack Data Trail

Verizon email hacking statistics show that phishing attempts are responsible for 80% of malware infections and nearly 95% of all espionage attacks. 

Additionally, Facebook has experienced numerous data breaches since its launch. In one example, 540 million records were exposed in a Facebook data leak, including Facebook IDs, passwords, Facebook friends, photos, and check-ins. 

Also Read: What is a Dock (DOCK)? Decentralized Digital Identity Platform

This data is a gold mine for hackers planning phishing scams and social engineering attacks.

With decentralized identity, passwords are no longer needed. Cryptographic keys are sufficient to be used to authenticate users when they log in. 

You can log in to websites with Decentralized Identifier data instead of username. 

Basically, you only need to provide relevant and necessary information to access each service.

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How Does Decentralized Identity Work?

Source: https://www.dock.io/

Let's come to a review of how Decentralized Identity works. It should be understood that a Decentralized Identity system involves the following key elements:

1. Blockchain: A decentralized database shared among computers in a blockchain network. It records information in such a way that it is difficult to change, hack, or cheat the system.
2. Decentralized Identity Wallet: An application that allows users to create decentralized identification and manage Verifiable Credentials.
3. Decentralized Identifier: A unique identification on the blockchain consisting of a series of letters and numbers. This DID includes details such as the public key and verification information.
4. Verifiable Credential (VC): Encrypted digital versions of commonly used paper and digital credentials. It is given by the holder to the organization that needs it for verification. In the VC system, there are three main parties:

• Holder: A user who creates a decentralized identification using a digital wallet application and receives Verifiable Credentials.
• Issuer: The organization that signs the Verifiable Credential with its private key and issues it to the holder.
• Verifier: The party that checks credentials and can read the issuer's public DID on the blockchain to ascertain whether the Verifiable Credential shared by its holder has been signed by the issuer's DID.

Source: https://www.dock.io/

Each key element in how Decentralized Identity works above has its own explanation. You can read it separately only on the Bittime Blog.

How to Buy Crypto on Bittime

You can buy and sell crypto assets in an easy and safe way through Bittime. Bittime is one of the best crypto applications in Indonesia which is officially registered with Bappebti. 

To be able to buy crypto assets on Bittime, make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application. 

Monitor price chart movements of Bitcoin (BTC) , Ethereum (ETH) , Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.

Also Read:

What Is RSS3 (RSS3)? Decentralized Identity and Data Protocol

What is Litentry (LIT)? Future Digital Identity Solutions in the Web 3.0 Era

Humanity Protocol: Digital Identity with Palm Scans

What is Metadium (META)? Blockchain Identity Solutions for the Future

DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.