What is your identity? It’s the ability to represent to the world who you are. That can cover everything from what you wear to who you associate with to what country you are from. Your identity is a collection of attributes that describe you.
In practice, proving your identity is also the key to unlocking your social and economic potential — physically and digitally. Society has always been built on trust, and sometimes, we need to know who we’re dealing with.
As such, your identity is core to who you are and what you’re able to do, whether that’s buying something online, opening a bank account, or starting a business.
The problem is that the way we deal with identity hasn’t caught up to the modern world.
Part of the reason is that our most credible forms of identifying documents like driver’s licenses and passports still live in the analog world. The pandemic further shone a light on those limitations with places like the U.S. still reliant on paper vaccination cards, which are inefficient, difficult to verify, and easy to counterfeit.
One of the issues with analog identifying documents is that not everyone has them. The reality is that our current system excludes 1.7 billion people from basic financial services, many of whom lack traditional forms of identity. For instance, migrant workers may not even have a home address.
Things aren’t much better in today’s digital world, where an abundance of online accounts means that our identity and personal data are scattered across servers vulnerable to attack. Outside of just giving away your email and phone number or accepting tracking cookies on your browser, some services collect more official forms of identity. Have you ever had to send a picture of your driver’s license or insert your passport number when buying something online?
The result? In just the first half of 2019, an astounding 4.1 billion records were compromised.
Meanwhile, we don’t own the digital identities we create. The Facebooks and Googles of the world do and profit mightily from our data. And because they own our data on their proprietary platforms, we can’t easily bring our identity and data with us if we decide to go somewhere else. The reputation you created on Facebook Marketplace as a long time seller is stuck on Facebook. If you ever decide to sell on Ebay, you’re starting from zero.
The fragmentation of your digital identity extends well beyond popular websites. A pillar of the United States traditional financial system is the credit score — a system entirely predicated on centralized digital identity that you have no control over. Anyone who’s moved to the U.S. from abroad understands the challenge of trying to get a mortgage or even open a bank account — even if you had great credit in your home country.
Do you want to know the worst part? The digital identities described above aren’t even that credible in the first place. Most social media platforms are more concerned with expanding their user base than verifying accounts are owned by real people, contributing to society’s growing trust deficit.
What we need is a human-centric approach to digital identity, one that is easier, safer, and cheaper than the one we have today.
We need a digital identity that works for people and organizations alike.
Your digital identity should be:
- Self-sovereign. We should own and control our identity and data. Further, we should be able to decide who we share our data with.
- Private, secure and encrypted. Our data should be private and safe, always. You should be confident that only you have access to the information you create, save, and share. Third party entities and bad actors should never have the opportunity to see your information in the first place.
- Interoperable and portable. Our identities should be premised on globally accepted standards just like the internet is built on interoperable protocols that power the web and email. They shouldn’t be locked into proprietary, closed ecosystems dictated by corporations or governments. Moreover, we should be able to bring our identity with us to whatever platform we choose. Remember when your cell phone number was locked into your mobile service provider? Today, our phone numbers are portable. You can bring your phone number with you no matter what provider you choose. The same will be the case for our digital identities.
- Built on verifiable credentials. You should be able to verify your identity once, receive a machine-verifiable credential, and reuse that credential many times over. This means you won’t have to redundantly verify your identity and re-share your data each time you interact with a new business or service. The best part is that those services never need to see your personal information to know it is true. That way, businesses can trust that you are who you say you are, and don’t need to store and manage your personal data on their servers. Less servers holding your data means a more secure identity.
- Usable. What good is a fancy digital identity if it is impossible to use in your daily life? Digital identity and the associated credentials are going to take years to be adopted by 100% of establishments. That’s why it is crucial to make safer digital identity useful in the contexts we are living in today. That might mean making it easier to store and share a picture of your ID card. Tomorrow it could mean applying for a bank account. Next year, it might mean doing your taxes. Human-centric digital identity must meet the moment, wherever it may be.
- Inclusive. Identity is a human right. Anyone, anywhere should be able to create one. Notably, your identity should grant you access to basic services such as banking and payments.
It’s clear that the way we handle our identities today is broken. What’s incredibly exciting is that a convergence of developments across fintech, regtech, and web3 now enable a smarter, better, and more inclusive framework.
Human-centric digital identity is the key to a future that works for us, allowing us to set new standards for how we deal with issues like financial inclusion, communication and censorship, and even the integrity of our democratic elections.
Our identities are the building blocks for a modern society and economy. We owe it to ourselves and each other to get this right.