Decentralized Identity is gradually finding its way into the crypto space. Identity verification cuts across all facets of life today. The use of cryptocurrency exchange, online services, and opening of bank accounts all require proving your identity, thereby placing more importance on identity verification and managing data.
Over the years, many users have adopted traditional identity verification. These institutions rely on centralized third parties to create, manage, and control identifiers and attestations, leaving users with little or no access to their data.
The emergence of a Web3 identity system built on popular blockchain networks such as Ethereum integrates solutions lacking in traditional identity systems, allowing users to manage identity information with the help of user-owned IDs.
With Web3 identity systems, users can create, control, and manage their identity information without the help and interference of third-party intermediaries.
This article focuses on decentralized identity and the benefit of decentralized identity to web3 projects.
What Is Decentralized Identity
Decentralized identity, with its acronym DID, is an identity management system for people, apps, and organizations with the help of blockchain technologies.
A major feature of a decentralized identity system is that user identities are self-owned via a secure storage blockchain platform, not issued or created by centralized systems or third-party intermediaries such as government IDs.
For example, gmails are owned by Google; the government owns International Passports. At the same time, an Ethereum account can be created and owned by you without the permission of anyone. Many accounts can be created without storing them in a central registry, making it a decentralized identifier.
Considering the stark difference between central and decentralized identity, let us consider some of its great benefits on web3 projects.
Benefits Of Identity For Web3 Projects
Here are some key benefits of identity verification for web3 projects;
- Ownership of identities by users: This is the most important reason for creating a decentralized identity. Users create their own decentralized identity on the blockchain network registering their wallets and addresses. Users can easily access different projects and communities with a unified identity, easing the stress of creating multiple accounts for different web3 projects.
- Builds trust for projects and users: An identity solution builds trust through a seamless and privacy-protection method of verifying users by harnessing blockchain technology to verify and manage user identity.
- Anti-Sybil protection: Identity verification helps protect organizations or web3 projects from humans looking to trick the system into thinking they are multiple persons during an airdrop. Web3 identities help prove these are humans and protect the system from vulnerabilities.
Decentralized identity is still in its early stage but has seen growth in the last few years and will continue to have breakthroughs for web3 projects and communities.
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