Why Self-Sovereign Identity fixes everything (and why we need to be careful)

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This is my first post that was co-written by Chat-GPT. I’ve marked with an asterisk sections that were largely AI generated with some editing by me. Interested in hearing what people think!

Want to stop scammers and hackers from repeatedly stealing funds? Want to give funds to someone with confidence they’ll pay you back? Want to stop people getting jobs with fake diplomas? Say hello to Self-Sovereign Identity.

Self-Sovereign Identity (SSI) *

Self-sovereign identity (SSI) is a concept that has gained significant attention in recent years as a potential solution to the problems associated with traditional identity systems. SSI refers to a model of identity in which individuals have full control over their own personal data and how it is used. In contrast to traditional identity systems, which are often centralized and controlled by governments or large corporations, SSI systems are decentralized and rely on blockchain technology to enable individuals to assert and prove their identity without the need for a central authority.

Data usage & security

In traditional identity systems, personal data is often collected, stored, and used by third parties without the individual’s knowledge or consent. This can lead to data breaches, identity theft, and other privacy concerns. With SSI, individuals can choose what data they share, with whom they share it, and for what purpose. This can help to protect individuals’ privacy and prevent identity fraud.

Cost of verification

Another advantage of SSI is that it can help to reduce the cost and complexity of identity verification. In traditional systems, verifying identity can be a time-consuming and costly process, as it often involves multiple steps and intermediaries. With SSI, individuals can use digital credentials to prove their identity, which can be verified in a decentralized manner using blockchain technology. This can make identity verification faster, cheaper, and more efficient.

Who to trust

One potential challenge with SSI is the issue of trust. In traditional identity systems, trust is often established through intermediaries such as governments or banks. With SSI, trust must be established through a decentralized network of nodes, which may be perceived as less trustworthy by some individuals. However, proponents of SSI argue that it can ultimately increase trust by giving individuals more control over their own data and enabling them to prove their identity in a more transparent and secure manner.

Despite these challenges, SSI has the potential to revolutionize the way that identity is managed and verified. As more individuals and organizations adopt SSI technologies, it is likely that the concept of self-sovereign identity will become increasingly mainstream. As such, it is important for individuals to educate themselves about SSI and the potential benefits and challenges it presents.

Use cases for SSI *

Some possible use cases for SSI include:

  1. Verifying personal identity: SSI can be used to verify an individual’s identity online, enabling secure access to online services and reducing the need for physical documents.
  2. Improving financial inclusion: SSI can help individuals in developing countries access financial services, such as opening a bank account or obtaining a loan, by providing a secure and portable digital identity. This is done by building up a credit worthiness through on-chain interactions.
  3. Enhancing privacy: SSI allows individuals to selectively share only the personal data that is necessary for a specific transaction, rather than sharing all of their data with every organization they interact with.
  4. Reducing fraud: SSI can help reduce identity-related fraud by enabling individuals to verify their identity in a secure and decentralized manner.
  5. Facilitating cross-border transactions: SSI can make it easier for individuals and businesses to conduct transactions across borders by enabling secure and portable digital identities.

Reputation

A key angle to SSI is the ability to build up a reputation. Similar to a credit score this can be based on your on-chain interactions. Using SSI it’s possible for a third-party to establish your trust worthiness without needing access to your history.

This leads to the idea of a trust model something which I shall devote an entire blog post to in the future but for now here are some good resources in case you are interested in finding out more.

Condatis – Trust in Self-Sovereign Identity (SSI)

Atala Prism Blog

enisa – Leveraging the SSI concept to build trust

Risks

Reputation based systems could be used to prevent a scammer from becoming involved in new projects or being hired. It could also be used to decide who to lend money to or rent a house too.

However this quickly raises questions of what a society based on reputation systems look like. Will it coerce people into behaving the same way? And would people’s past mistakes leave a permanent black mark and lead to limiting their future success.

This is perhaps best demonstrated in the Black Mirror episode – Nosedive, which I highly recommend watching if you haven’t already.

Before we write this off as a failure of SSI technology however, remember that such biases already exist in the real world. When a landlord decides whether to rent out an apartment they perform a check to see if someone is a bad tenant and may not rent it out to them as a result. If someone failed to pay their bills on time, they may not be able to get a loan in the future.

Blockchain and SSI technology makes it easier to perform checks, and it also gives uses greater control of their own personal data. However what the rules around how such technology is used and how it impacts services available to a person remains very much a human problem that is moving from being an opaque decision making process in the background, to a transparent and sharply algorithm driven process in the foreground.

It’s up to all of us to take an active interest in the development of SSI and how it is implemented.

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