The promise of the internet was decentralization. Somewhere down the line, we have traded convenience for control. In the process, we surrendered our identities to a few corporate behemoths who monetized our data for profit. Now, Decentralized Identity (DID) looks set to wrestle that power back. Is this indeed a profound revolution, or is it the Great Plan to Neo-Feudalism Ha secretly paved with good intentions? Let's dive in.

Freedom's Double-Edged Sword?

Think about it: every time you log into a website with your Google or Facebook account, you're essentially giving them permission to track your activity. You’re creating a massive digital profile, a carefully groomed product that’s then auctioned off to the highest bidder. DID aims to flip this script. Picture being the sole proprietor of your identity, retaining total jurisdiction over who can access your data, while being able to disclose only what’s absolutely required. Sounds utopian, right?

It could be. Here’s the anxiety-inducing truth: with great power comes great responsibility. What happens when you lose the key to your digital kingdom? What does it mean when your self-managed identity is pilfered? There’s no single authority to call, no “reset password” key that flushes it all for you. As the bank, vault, and security guard all rolled into one, that doesn’t work. This is the self-custody conundrum once more, as was the case with respect to Bitcoin. If you think protecting your crypto is a headache, just wait till you try to keep your whole digital life secure.

Digital Redlining 2.0?

Whether we reach that utopian vision can’t be overstated. Decentralized identity is meaningless without equitably accessible decentralized infrastructure. Yet what happens if DID becomes the next technology available only to the privileged? Might DID reinforce current inequities, leading to a new digital caste system?

Let's be realistic. The onboarding and ongoing experience to set up and manage a decentralized identity isn’t ideal, either. Second, you must have a firm understanding of technology. Internet access is key as is a basic understanding of complex ideas such as blockchain and cryptography. We need to start breaking down these barriers. If we fail to plan responsibly, DID may inadvertently cause a different kind of digital redlining, leaving the people who don’t have the means or know-how behind to reap the rewards of this decentralized future. Imagine a world where access to essential services, like healthcare or finance, is contingent on having a properly configured DID. What happens to those left behind? It's a terrifying thought.

This isn't just theoretical hand-wringing. We’ve watched the pattern repeat itself with other technologies. Early adoption of the internet was largely limited to wealthy communities, deepening our digital divide. We need to do better and learn from these mistakes. Let’s work to be sure that DID is widely available to all, regardless of their resources or technical skill.

Total Control, Utter Chaos?

One of the most persuasive reasons for adopting DID is its ability to improve privacy. By minimizing our reliance on centralized identity providers, we can reduce the amount of data collected and stored about us. This, in turn, can reduce identity theft, data breaches, and other privacy infringements. Decentralized identity expert and independent researcher Naga Yeswanth Reddy Guntaka explains the power of decentralized identity models. In doing so, they can eliminate identity fraud 73% of the time. Those are numbers that get your attention.

Here’s where the unexpected connection comes in: could DID inadvertently empower malicious actors? Would it turn immediately into an outlaws’ paradise, protected from the watchful eye of police investigators?

Think about it: the same features that make DID attractive to privacy advocates – pseudonymity, decentralization, and self-custody – can be exploited by criminals. Imagine a country in which terrorists, drug traffickers, and money launderers had free rein. They take advantage of decentralized identities to operate under the radar with little risk of detection. It’s a scary scenario and one that should be confronted in earnest.

The challenge, as always, is finding the right equation between privacy and security. We need to find ways to avoid the exploitation of DID. Yet at the same time, we need to preserve what’s great about crypto—the decentralization, the individual control. That’s going to take a whole new level of thoughtfulness, collaboration and out-of-the-box solutions.

Cloud-native IAM solutions can reduce identity-related security incidents to zero as much as 67%. As a result, organizations that have implemented Zero Trust have experienced as high as a 91% decrease in their attack surface. Organizations that have adopted passwordless solutions witness a 92% reduction in successful phishing attacks. According to FIDO passwordless authentication systems, employees can authenticate 40 seconds quicker on average. AI-driven IAM solutions reduce the amount of time needed for detection and response by 76%.

Decentralized identity systems, passwordless authentication, AI-driven solutions, and Zero Trust principles are all technologies that are sustainably defining the future of IAM.

The future of decentralized identity has yet to be decided. It’s being formed by the decisions we’re making today. So, what can you do?

Decentralized identity indeed offers enormous potential, but it isn’t a magic bullet. It’s a double edged sword, a powerful tool that can be wielded with good or ill intentions. Together, we are entrusted with the power to determine what that future looks like. Let’s make this more than just a cycle – let’s improve freedom, fairness, and equity for all. The next chapter of the internet is being written today. Will you be a part of it?

  • Educate Yourself: Learn more about DID and the technologies that underpin it. Understand the potential benefits and risks.
  • Experiment: Try out DID wallets and platforms. Get a feel for how they work and what they offer.
  • Advocate: Support policies that promote responsible innovation in the field of decentralized identity. Demand transparency and accountability from companies that are developing and deploying DID solutions.

Decentralized identity holds immense promise, but it's not a silver bullet. It's a powerful tool that can be used for good or ill. It's up to us to ensure that it's used to build a more free, fair, and equitable future for all. The next chapter of the internet is being written right now. Will you be a part of it?