MicroStrategy, the leading corporate holder of Bitcoin, has revealed plans to launch a decentralized identity solution on the Bitcoin network. The marks a significant move towards leveraging Bitcoin blockchain beyond traditional financial applications. During the MicroStrategy World conference in Las Vegas on May 1, Michael Saylor, the co-founder and Executive Chairman of the firm, introduced MicroStrategy Orange, a decentralized identity protocol……Story continues….
By: Anisha Pandey
Source: MicroStrategy
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Critics:
Blockchain-based decentralized identity systems offer several advantages over traditional centralized identity systems. They are more secure, as there is no single point of failure. They are also more user-friendly, as users only have to manage one set of credentials. What Are Decentralized Identifiers (DIDs)? Decentralized identifiers (DIDs) are a way to identify yourself on the internet without using a central authority, like a government or a company.
Think of it like a digital passport that you control, rather than one that’s issued to you by someone else. To Create a Decentralized Identity you have to Get Funds to Cover the Storage Deposit . The first thing you will need to generate an identity is an address with enough funds to cover the Storage Deposit, Creating the Content for the DID Document, Construct a New Alias Output & Publish the generated Alias Output.
Federated identity, which has dominated identity management for years, relies on centralized data management: personal data is stored in a database and checked against a login and password from a user account, whereas decentralized allows people, organizations, and things to hold their own personal data, and the source.
The nature of the organization’s workforce matters and centralization is more aligned to an organization where the roles and skills are specialized and standardized, following clear procedures, whereas a decentralized approach may be better suited to a generalist workforce that perform complex and creative tasks. There certainly are better ways of shifting to using and sharing digital identities, which is the reason a digital identity is really necessary.
Decentralized identity works solve the need for digital identity by providing a way to build trust in digital identity through the way it is issued, stored, and exchanged. A decentralized identity system is made up of 3 pillars: blockchain, Verifiable Credentials (VCs), and decentralized identifiers (DIDs). A cost center is an example of decentralization in which authority to track controllable expenses is given to subordinates in an organization.
In a decentralized organization, every department is a cost center. Decentralized identity solutions are products companies use to manage and verify end-user identities, including employees and customers.This end-user control of sharing and revoking access to one’s sensitive data is known as self-sovereign identity (SSI). Centralized identity systems pose a significant risk due to the potential for single points of failure.
If the central authority’s systems are breached or compromised, it can lead to widespread data breaches and security incidents that impact all users. One example of federated identity is when a user logs into a third-party website by using their Gmail login credentials. With FIM, they don’t have to create new credentials to access multiple websites that have a federated agreement with Google, such as: YouTube. Fitbit.
Centralized identity management means IAM all happens in one environment. In a workplace setting, this looks like the user signing into a single workspace to access all the applications and tools they need. Decentralized identity management means IAM is spread out across multiple environments. There is a lack of uniformity in the policies followed. There will be a problem of coordination. It will require hiring of trained and qualified personnel.
The accepted wisdom is: decentralization good, centralization bad. This is wrong. Instead, both centralization and decentralization are good (and necessary), but they must be kept in balance. To understand this, we simply need to look to nature. One of the main advantages of decentralized decision-making is the quality of the decisions. Individuals closest to the action or problem are the best decision-makers in that scenario as they have a better understanding of the context, environment, and the problem itself.
In a decentralised identity framework, the user receives credentials proving their identity from multiple Issuers (e.g., Government, Employer, University etc.) and stores them in a digital wallet. The four forms of digital identity are user-centric identity, user-enabled identity, social identity, and machine identity. These encompass individual user profiles, user-controlled attributes, social media identities, and machine-to-machine identifiers.
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