What is decentralized identity in blockchain?

Decentralized identity refers to a system of identity management that is not controlled by any central authority such as governments, corporations or identity providers.

Traditional identity systems often involve intermediaries that store and manage personal information, which can lead to privacy concerns, data breaches and dependency on centralized entities.

In contrast, decentralized identity is a self-sovereign model where individuals fully own and control their digital identity, free from external institutions. By leveraging blockchain technology, this approach enables individuals to securely create, manage and share their personal information, shifting the power back to users and enhancing privacy and security online.

But why is identity a significant concern?

Identity is an important issue, both in the digital and physical world, because it lies at the core of how individuals interact with services, access opportunities and assert their rights.

In today’s world, personal data is a valuable commodity, and central authorities (governments, corporations, etc.) store vast amounts of it. This centralized collection creates significant security risks.

Data breaches are a growing concern; individuals often have little control over how their personal information is used or shared. Hackers target these centralized systems to steal sensitive data, and once exposed, it can lead to financial loss, identity theft or fraud.

In addition to these external threats, there’s the problem of surveillance. Traditional identity systems often require individuals to give up their privacy, especially in digital interactions, making them susceptible to tracking and profiling by third parties, which compromises user autonomy.