Welcome to the new web. It’s not like the old web and it demands a new approach to identity. Data structures and commercial relationships will be markedly different in the Web3 era, requiring verification methods that are more streamlined, secure, and trustworthy to support them.
Existing online identity mechanisms are a poor adaptation of physical ones. All too often, companies use scanned copies of sensitive ID documents such as passports, sent over unsecured channels such as email, which is an inefficient and often times dangerous practice.
Documents can be forged, and identity credentials are usually still centrally held and vulnerable to misuse or theft. Stolen identity information litters the dark web.
The time is right for a new type of identification, created with digital channels in mind. Built for Web3, it will be irrefutable, immutable, and controlled entirely by the person that owns it.
Digital Identity
— The Big Shift
By Tyrone Lobban, Head of Blockchain Launch and Onyx Digital Assets, Onyx by J.P. Morgan and George Kassis, Vice President, Digital Identity Lead, Blockchain Launch, Onyx by J.P. Morgan.
What is Web3?
Web3 is the next generation of the internet, promising a landscape where individuals not only have read and write capabilities on the internet, but also the ability to own and control their data, including digital creations, digital assets and digital identities.
Enter
Decentralization
The web’s evolution has been marked by increasing centralization, with big tech companies ultimately controlling users' data and digital identities. Web3 aims to reverse this by shifting ownership and storage of digital assets and identities to decentralized blockchain systems, giving individuals full control and ownership over their digital lives.
Digital identity for Web3
As Web3 decentralizes commerce, identity must follow suit. User credentials will be securely stored on personal devices, while verification records live on public blockchains. These decentralized identities can include personal details and behavioral data, all controlled by the individual through their digital wallet, with third parties defining access rules as needed.
This decentralized identity model carries several key advantages:
Sovereignty
In a Web3 environment, people control their own identity information. They decide who sees it. They can grant that access at a more granular level, revealing facts about themselves on a need-to-know basis. In the old model, you might have to show your driver’s license just to prove your age, giving the attendant at the liquor store or the bouncer at the bar access to your name and address. Decentralized identity aims to solve for this problem.
Security
When using the old model, you could not be certain how an organization stored your identity credentials or who it shared them with. This led to countless privacy breaches. Decentralization puts you in full control of your identity credentials and makes it accessible on your terms. It also means there are no single points of failure, because instead of allowing third parties to store your data in a centralized server, a third-party would only get access to it for a set period of time.
Immutable and Irrefutable
Encrypted records of digital identity signatures stored on the blockchain make it impractical for a malicious party to tamper with identity information, making it highly trustworthy. A third party will not be able to alter someone’s identity signature.
Sovereignty
Security