The Future of Verifiable Credentials
A new and secure digital standard for your personal information.
Introduction
Institutions rely on physical credentials as a matter of safeguarding important information unique to an individual. Physical credentials such as passports, driver’s licenses, and academic and birth certificates are often used to identify people and verify claims about their age, background, or skills. Even if personal identification is secured on physical documents, which in theory are less accessible to the public, both the validity, security, and reliability of the information held are always at risk.
Every year, 15 million people in the US suffer from identity theft, costing a total of $50 billion in financial losses. Worldwide, fake academic and vaccine certification markets have risen, offering certificates for as little as £25. More and more employers dismiss academic certifications in job applications, despite students investing several years and thousands of dollars in their education.
The increasing digitization of information requires many individuals to interact with organizations and share important documents and personal information. However, with high rates of skepticism regarding the security of personal information in the digital sphere and distrust towards private corporations, it can be challenging to envision a future using a digital passport.
The solution: verifiable credentials.
What are Verifiable Credentials (VC)?
Verifiable credentials are a digital version of personal credentials that are tamper-proof and cryptographically secured.
A verifiable credential includes three crucial elements:
Machine verifiable
Issued by a competent authority
Secure and tamper-proof (verified cryptographically)
Digital credentials must conform to the regulations established by the Verifiable Credentials Data Model 1.0 in order to be considered Verifiable Credentials. The specifications are developed by the World Wide Web Consortium (W3C), an international community that sets standards for the World Wide Web.
Components of a Verifiable Credential (VC)
The components of a verifiable credential include:
Credential metadata: Information about the properties of the credential, including the date signed, the identity of the issuer, and even the credential identifier
Claim: A set of claims that identify the credential subject’s position, education, or more.
Proof: Cryptographic solution that allows people to verify the source of data and tamper-proof history
Verifiable Credentials also make use of Decentralized Identifiers (DIDs), which are unique identifiers that circumvent the need for a centralized legal authority. DIDs provide an extra layer of security by using cryptography and public keys to bypass the need to access central authorities or organizations.
DIDs are unique strings of letters and numbers created and owned by the user. DIDs allow the owner to prove cryptographic control and thus allow the user to show entire or selected parts of your credential. For example, you can choose to solely show your birth date on your license.
The Verifiable Credentials Ecosystem - How it Works
The three components of a verifiable credential ecosystem include:
Issuer: The entity issuing the credentials; typically government organizations, healthcare centers, etc.
Holder: The entity about whom the credential is issued; owns the credential in personal digital wallet
Verifier: The entity that verifies the credential with established criteria; authenticates credentials
The interactions that ensue between these three entities form the pattern called the triangle of trust.
The issuer digitally signs attestations and provides the necessary personal credentials to the holder. The holder manages their credentials and can create presentations of proof consisting of several different VCs to present to the verifier for verifications. The verifier will then check the credentials for three factors - validity, tamper-proof properties, and competent authority of issuance.
Workflows in this diagram can vary, as both the holder and verifier can initiate proceedings and requests for information. Underlying this model is a system of checks and balances which establishes a framework of trust for both the institution and individual.
Benefits
An increase in customer engagement on digital channels and a growth in the remote workforce has heightened concern regarding personal data access from centralized organizations. According to Gartner’s report on current trends in decentralized identity and access management, centralized approaches to managing data will change.
The biggest challenges we face: privacy, assurance, and pseudonymity.
Users of Verifiable Credentials benefit from:
Tamper-proof cryptographically secure data.
Verifiable anywhere, instantly.
Full control and ownership of your personal data
Mutual, trustworthy relationships with organizations
Conclusion
Verifiable Credentials are increasingly seeing a growing number of use cases and relevance in a variety of different industries. Although this system is still early in development, the new approach to digital ownership and security presents itself as a promising alternative to the current model.
Weavechain is the big data on-ramp to Web3, building an enterprise-grade solution that allows companies to experience the benefits of Web3 without ripping and replacing existing data structures. Weavechain allows companies to issue verifiable credentials and benefit from blockchain technology without putting sensitive information directly onto the blockchain or moving data away from its existing database.
To learn more about how Weavechain can help your organization:
Drop us a line at hello@weavechain.com
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