Identity is arguably one of the most critical aspects of a security infrastructure. Identity controls access to most interactions with online resources, including websites, applications, and network infrastructure. As identity has increasingly become an attack vector for bad actors, weaknesses in identity management processes and infrastructure are leading to an increase in security breaches, identity theft, and other privacy related issues.
Historically, identity processes and infrastructure have relied on centralized identity management systems and providers of identity verification. This centralized approach is proving increasingly vulnerable to data breaches. A notable example of a centralized identity management system breach occurred with Okta, a leading provider of identity and access management solutions. In late 2023, Okta experienced a security incident where attackers gained unauthorized access to their customer support system. This breach exposed the names and email addresses of all users in Okta’s customer support system, affecting approximately 18,400 customers. The attackers exploited a compromised Okta employee’s personal Google account, which led to the infiltration of Okta’s internal systems. This incident underscored the potential risks associated with centralized identity management systems and highlighted the importance of robust security measures to protect sensitive user information.
Decentralized Identity (or DID) is a new approach to management of identity information that addresses some of the inherent challenges with how identities have historically been managed.
Decentralized Identity Explained
Decentralized Identity, also known as Distributed Identity, gives users control over their own identity data and who can access it. Unlike traditional centralized identity systems, where corporations or government entities manage and control user data, decentralized identity allows individuals to securely store and manage their information. This reduces reliance on centralized providers, which have historically been vulnerable to breaches that expose user data. By enabling users to decide what information they share and with whom, decentralized identity enhances security and privacy while allowing identity verification without depending on a central authority.
How Does Decentralized Identity Work
Decentralized Identity relies on a combination of technologies and principles. This includes leveraging blockchain technology, cryptographic technologies, and principles such as self-sovereign identity where users have full control over their identity data and how it is leveraged.
One of the key principles of Decentralized Identity is self-sovereign identity (SSI). SSI gives users the ability to decide how identity data is validated and shared. This gives users control of their personal data, the ability to determine a timeframe, specific control of data, and to whom that data is shared. An example of this principle is sharing only a user’s age data instead of sharing all the data on a driver’s license.
Decentralized Identity leverages blockchain technology. Blockchain technology refers to a chain of “blocks”. Each block references a set of data that is linked together using cryptographic hashes. A block on the blockchain cannot be altered or deleted. This ensures the data integrity and security of a block on the blockchain. Since the blockchain is distributed across a network of nodes, this decentralized approach gives no single entity control of the data on the blockchain. This ensures that there is no centralized point of identity data. Identity data on the blockchain is immutable, making it resilient to tampering.
With DID, identity data can be issued by entities that can confirm a piece of a user’s identity data. This is referred to as Verifiable Credentials, which are a set of digitally signed assertions that validate a user’s identity or the attributes of a user. These credentials are stored on the blockchain and can be distributed to providers without needing the original issuer to validate the credential. Using the age example, a government agency could issue a Verifiable Credential that indicates your birthday. This can then be presented based upon the self-sovereign identity principles.
Decentralized Identifiers (DIDs) and Cryptographic Signatures are leveraged to validate a user’s identity. The DIDs are an identifier controlled by the identity holder and are unlike traditional user identities like email addresses or usernames. DIDs are stored on the blockchain to ensure they are verifiable and immutable. A user’s identity data is also signed to ensure that the data is valid and has been issued by a trusted provider.
Benefits of Decentralized Identity
There are several benefits to Decentralized Identity, including the following:
- Since Decentralized Identity allows users to maintain control over their own identity data, users can share specific verifiable credentials. This enhances user privacy and security.
- Decentralizing the identity information reduces the risk of privacy or identity breaches.
- Since identity information is stored across multiple locations leveraging the blockchain, there is no centralized system for bad actors to attack.
- Decentralized Identity also gives users greater control over their identity information. This eliminates the need to rely on centralized sources of identity data and ensures that entities only have the minimum information required.
- Users that are not normally able to be included in centralized identity systems, like users without government ID’s, can have verifiable credentials for entity consumption.
- Decentralized Identity principles, like verifiable credentials, can be used across multiple entities. This eliminates the need for users to create multiple accounts or share sensitive data to each entity.
- Users can assert their demographic information without having to share sensitive identity validators to each entity.
Challenges of Decentralized Identity
Decentralized Identity has the potential to improve identity management, as well as the processes and systems historically used by traditional identity systems. However, there are several challenges to implementing Decentralized Identity, including:
- There are limited standards around Decentralized Identity. This reduces adoption and increases complexity. Standards are needed and agreed to across entities before this can by broadly implemented.
- Similarly, there are regulatory compliance standards that must be adhered to and determined for widespread Decentralized Identity adoption.
- Finally, usability needs to be considered. User friendly interfaces and processes need to be developed to allow users to share identity data. As blockchain and other technology matures, usability will become more attainable.
Conclusion
Decentralized Identity will improve how users manage and secure a user’s personal identifiers. Since control is based upon the user instead of centralized systems, this ensures greater privacy and security. While there are several challenges to overcome, the potential benefits outweigh the complexities inherent with decentralized identities. This will ensure a more secure future.
