Image Source: GSMA (https://www.gsma.com/identity/decentralised-identity)
Decentralized identity verification is a system for authenticating and verifying identities that do not rely on a central authority. Instead, it uses a decentralized network of nodes to validate identity claims. This type of identity verification can be helpful in a number of ways.
One of the main benefits of decentralized identity verification is increased privacy. In traditional centralized systems, our personal information is often stored in a central database that can be accessed by the issuing authority or potentially hacked by third parties. With decentralized identity systems, our personal information is stored in a distributed ledger and can only be accessed by those with the proper cryptographic keys. This means that our information is much less vulnerable to being accessed or misused by unauthorized parties.
Another benefit of decentralized identity systems is reduced reliance on third-party entities. In traditional systems, we often have to rely on banks, governments, or other centralized entities to verify our identities. This can be inconvenient and time-consuming, and it also means that we have to trust these entities with our personal information. With a decentralized system, we can have more control over our own identities and who has access to them.
Decentralized identity systems can also be more secure against identity fraud. Because identities are verified through a decentralized network of nodes, it is much more difficult for an attacker to impersonate someone or create fake identities. This can help to reduce the risk of identity theft and other forms of fraud that rely on stealing or forging identities.
In summary, decentralized identity verification offers increased privacy, reduced reliance on third parties, and increased security against identity fraud. It has the potential to become a dominant method of identity verification in the future, and it is important for individuals and organizations to understand how it works and how it can be used to protect personal information and secure online identities.
Written by Praveen Gajjala, CEO & Founder of Facedapter and AI enthusiast
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