The Three Models of Digital Identity Relationships
By: Timothy Ruff
Tags: Blockchain, Distributed Ledgers, Self Sovereign Identity, Federated Identity, Digital Identity

Model #3: Self-Sovereign / Peer-to-Peer

How it Works

Self-sovereign identity is a two-party relationship model, with no third party coming between you and the organization, now considered your “peer.”

SSI Wallet and Verifiable Credentials

SSI begins with a digital “wallet” that contains digital credentials. This wallet is similar to a physical wallet in which you carry credentials issued to you by others, such as a passport, bank account authorization, or graduation certificate, except these are digitally signed verifiable credentials that can cryptographically prove four things to any verifier:

Who (or what) is the issuer; To whom (or what) it was issued; Whether it has been altered since it was issued; Whether it has been revoked by the issuer.³

You can also carry self-signed credentials in your wallet, such as your preferences, opinions, legally binding consent, or other attestations you’ve made about anything.

Verifiable credentials can be issued and digitally signed by any person, organization, or thing and used anywhere they are trusted. SSI is as strong as the credentials it contains, strong enough for even high-trust industries such as finance, healthcare, and government. Organizations can choose to trust only credentials they have issued, credentials issued by others, or some combination, according to their security and compliance needs.

Out-of-Band Connection

To exchange digital credentials securely and privately, one peer — any person, organization, or thing — can establish a direct, encrypted connection with another peer. This connection can remain persistent (as opposed to session-based) at the option of each peer. Trust is mutually established when peers use this connection to exchange credentials and verify the digital signatures on received credentials using a distributed ledger.⁴ ⁵ You control what you share with others, whether an entire credential, part of a credential (called “claims”), or zero-knowledge proofs (ZKP) derived from a credential (explained below).

Real Self-Sovereignty

You are literally the sovereign owner of your SSI wallet and the credentials inside: No one can “turn the lights out” or take them away from you without your consent. As in the real world, issuers can revoke credentials they’ve issued, but you’ll still possess them and they can continue to be useful, just as an expired driver’s license can be used to prove your age. With verifiable credentials, however, a new recipient will know when you present it whether or not it has been revoked, without needing to contact the issuer.

SSI is becoming standardized and interoperable, and it is portable, with no vendor lock-in. Real SSI is not dependent on any particular company or other entity, as apps and agencies are modular and replaceable. Switching from one service provider or agency to another does not result in losing one’s credentials, relationships, or history.

Pros

Contrary to popular belief, we don’t have to wait for SSI to be ubiquitous before gaining a large chunk of its benefits. As we’re learning from most of our clients and the use cases they have brought to us, we can begin benefiting right now, with “Single-Source” SSI.

“Single-Source” SSI

Two common (and contradictory) misperceptions about SSI are:

It only involves self-asserted claims; It only involves third-party claims.

What many critics miss is SSI’s powerful ability to operate between those extremes, for relationships between just two parties, where the only credentials an organization will accept are those it issued in the first place.

This is precisely how most identity interactions work today: you can only use your bank login at the bank, your student ID at the school, your Costco credential at Costco. Surprisingly, most of the benefits of SSI still apply to these, the most common identity relationships:

Stronger authentication: Because shared secrets can be replaced with cryptographically secure, digitally signed credentials, you can exchange far stronger credentials, and more of them.

Because shared secrets can be replaced with cryptographically secure, digitally signed credentials, you can exchange far stronger credentials, and more of them. Great user experience: Because authentication can occur out of band, you can open an app and already be signed in, or call your bank’s customer service without answering silly questions about your birthday, mother’s maiden name, SSN, and other personal info.

Because authentication can occur out of band, you can open an app and already be signed in, or call your bank’s customer service without answering silly questions about your birthday, mother’s maiden name, SSN, and other personal info. Phishing prevention: Because authentication is mutual, when you get a suspicious call or message from someone, you can know for sure who it is, because you can authenticate your bank as strongly as they can authenticate you.

Because authentication is mutual, when you get a suspicious call or message from someone, you can know for sure who it is, because you can authenticate your bank as strongly as they can authenticate you. Private communication channel: Because the out-of-band connection between SSI peers is private and secure — no intermediaries, encrypted end to end — it can be used for communication of any kind: text, voice, video, data sharing, and more. (Great for millennials, who hate email.)

Because the out-of-band connection between SSI peers is private and secure — no intermediaries, encrypted end to end — it can be used for communication of any kind: text, voice, video, data sharing, and more. (Great for millennials, who hate email.) Better relationships: Because authentication happens passively behind the scenes, customers can be recognized and no longer treated as strangers at the beginning of each interaction, enabling a rich customization of each and every touchpoint.

Because authentication happens passively behind the scenes, customers can be recognized and no longer treated as strangers at the beginning of each interaction, enabling a rich customization of each and every touchpoint. Same liability model: Because a bank, for example, can choose to accept only digitally signed credentials it has issued, SSI is no different than siloed identity from a liability perspective, meaning financial institutions and companies in other high-trust industries can utilize SSI without legal or compliance concerns.

Of course, once you have credentials in a self-sovereign wallet they’re yours to keep and use with anyone who trusts them, whether that’s one verifier or many.

Multi-Source, Multi-Verifier SSI

As remarkable as it would be just to regain control of our identities within distinct relationships, the most exciting version of SSI goes much further. It envisions a world where any person, organization, or thing can issue any kind of credential to any other person, organization or thing (“multi-source”), which can then be shared with any other person, organization, or thing, and the authenticity of which can be immediately and easily verified (“multi-verifier”).

The advantages of such a world cannot be easily overstated. With everyone having a wallet full of cryptographically verifiable credentials, simply having someone’s personal information would no longer be sufficient to impersonate them, raising the bar quite high for account take-over, phishing, fake news, or most forms of fraud; even spam becomes much more difficult. Add on top the benefits of having authenticated, peer-to-peer connections with every person, organization, or thing with whom you have a relationship, literally forming a newly decentralized web, built on open-source protocols and with no tech giants needed as intermediaries. It would improve almost every digital interaction.

Obviously, there is a massive chicken-and-egg problem to overcome — an obstacle between our world and that one called “network effect.” Network effect is your friend and accelerator as a new technology gains momentum, but your nemesis at the beginning: imagine having the world’s only fax machine versus working in the only office without one. We got over that hump with important new technologies like the telephone, the fax machine, and most crucially the internet, and we’ll get there with SSI. Based on the activity we at Evernym are seeing around the world, we’ll get there more quickly with SSI than most believe, because our world is more connected than ever, and the pains SSI addresses — fraud, security, privacy, compliance, user experience — are reaching a crescendo.

Legal Identity, Pseudonymity, and Anonymity

SSI has the important ability to strongly prove legal identity when desired, or enable trustworthy pseudonymity or anonymity when preferred. SSI that uses zero-knowledge cryptography opens up an entirely new world of powerful, private interactions, including:

Websites and other services can verify that patrons are of a legal age, without needing name, location, age, or even birthday;

Individuals can prove that they are employees of a certain company, or citizens eligible to vote; that they have a certain credit score; that their anonymous tip or whistleblowing is credible, etc., all without revealing their names, addresses, or other personal data;

Pharma companies can have direct, private connections with patients who have verifiable prescriptions for their medications, without knowing who or where those patients are;

When privately selling a car or other property, owners can prove their legal ownership without revealing any personal details;

Internet users can participate pseudonymously in gaming, social, or other online communities.

Other Benefits

SSI has many other benefits for people, organizations, and things. Some of the biggest are:

SSI simplifies and strengthens compliance with GDPR, KYC, AML, HIPAA, COPPA, and other regulations by eliminating intermediaries and ensuring cryptographically provable verification and consent .

with GDPR, KYC, AML, HIPAA, COPPA, and other regulations by eliminating intermediaries and ensuring cryptographically provable verification and . SSI can prevent unwanted correlation by third parties, and even among colluding second parties, by incorporating pairwise identifiers, powerfully addressing this known privacy problem common to blockchain technologies;

by third parties, and even among colluding second parties, by incorporating pairwise identifiers, powerfully addressing this known problem common to blockchain technologies; SSI provides participants in witness protection programs and intelligence operations with cryptographically strong credentials;

and with cryptographically strong credentials; SSI can work offline as well as online, creatively utilizing smart cards, QR codes, NFC, Bluetooth, and other technologies.

Each of these benefits deserves further discussion and consideration, which we’ll provide in future posts and papers.

Cons

Several of the capabilities discussed above aren’t necessarily exclusive to SSI. Verifiable credentials, zero-knowledge proofs, and even mutual authentication, for example, could theoretically be built into non-SSI solutions, though I have never seen or heard of any such solution. And while, as footnoted, not all SSI solutions include all of these capabilities, at least one SSI system — Sovrin — was designed from the ground up to include all of these capabilities natively.

SSI is new and different than the way things are currently done, and that alone creates friction. There are switching costs of several kinds, including: modifying internal systems to issue claims and credentials and verify the same; upgrading user interfaces to replace usernames and passwords with the exchange of claims and proofs;⁶ slowly replacing email as a means of communication; and educating and training staff, customers, and others.

Then there’s key management, potentially the Achilles heel of all blockchain technologies. With bitcoin, for example, if you lose your private keys you lose your money, period. There is no “forgot password” option. SSI solutions will need a crutch analogous to password recovery if they are to become widely adopted. SSI systems that use pairwise identifiers, such as Sovrin, will generate hundreds or even thousands of private keys for people and organizations to manage, magnifying the need for comprehensive key management.⁷

In Conclusion

“On the internet, nobody knows you’re a dog,” the famous New Yorker cartoon says. Accurate identification and authentication is still the great unsolved problem of the internet; we still can’t tell the good guys from the bad. If we could, we’d block the bad ones and let the good ones through. Our failure to do so is the primary reason why our global economy loses trillions of dollars annually to fraud-related costs.

Make no mistake: traditional siloed identity is the main culprit here.

The third-party IDP model had promise when it first arose, but seemingly intractable problems remain. Bottom line: the current identity models are broken and in crisis, and SSI represents a revolutionary step forward. And now that SSI is possible, I think its ubiquitous adoption is inevitable.

SSI is not a single breakthrough but many. Trustworthy, truly peer-to-peer relationships between people, organizations, and things will revolutionize digital interactions. Mutual cryptographic authentication could address the internet’s authentication problem, making identity theft, phishing, and other fraud much tougher for crooks. The compliance and consent requirements of the most stringent privacy regulations can be not only met but exceeded, in both letter and spirit, while improving customer experience rather than sacrificing it. Privacy can — and I believe will — have a major comeback. And only in science-fiction movies have we seen the types of user experiences that SSI will make possible.

All in all, it’s high time for a change. The siloed and IDP models have had their run, and proven they’re not up to the task.

The time for self-sovereign identity has come.

(Thanks to Drummond Reed, Phil Windley, Steve Wilson, Doc Searls, Brad Tumy, Andy Tobin, John Callahan, Sam Curren, James Monaghan, and Elizabeth Renieris for their editing and thought contributions to this article. Special thanks to Identity Woman (Kaliya Young) for her help distilling these three categories from significantly more complex models of identity.)