8 Reasons to use Verifiable Credentials
The growing digitalization of our lives means that we interact with thousands of apps, hundreds of companies, and possibly millions of users each year, depending on what we do online.
While these interactions have opened a world of possibilities, it has also greatly increased the risk of data breaches because we don’t know where our data and identities are stored, who accesses them, and where they are used. These concerns of privacy and security have led to the evolution of a framework called the Self-Sovereign identity (SSI), where the owner of a data controls where his/her data resides, chooses where to use it, and determines with whom it can be shared.
The widespread implementation of SSI or any other framework for that matter requires a set of standards to make the data interoperable and to create an ecosystem that will leverage its power. One such standard implementation is the Decentralized Identifiers (DIDs) that uses claims or data objects called Verifiable Credentials.
As a user, you might wonder why in the world you should embrace VCs and what’s in it for you. Well, here are some reasons to use them.
Follows the Principles of Decentralization
Verifiable Credentials put you right at the center of the system, as per the principles of decentralization.
Contrast this with some of the more prevalent systems such as the Federated Identity Management (FIM), where the identity provider is at the center of the system and determines where and how data must be stored and used. Sometimes, these identity providers even decide which apps can be given access to your data, and in the process, creates a centralized and monopolized system.
But with VCs, the data owners determine the applications that can access their data. In fact, these owners sit in the middle of what’s called a trust triangle, thereby connecting the issuers and verifiers in an ecosystem.
Let’s understand this with an example. An individual (holder) has taken COVID vaccination at a healthcare company and the details of this vaccination have to be verified by airport authorities before the holder can board a flight. Here, the healthcare provider is the issuer and the airport authority is the verifier, and these two entities are connected by the holder, thereby making him/her the central point of the transaction.
Thus, VCs empower decentralization because every piece of data is owned and controlled by the individual holder and not by any single entity.
Interoperable across Systems
VCs are interoperable across many systems and can be used in almost every possible scenario. Here is a list of use-cases where VCs can be used and PoCs developed based on them.
The biggest advantage of VCs is they are interoperable. Let’s say, you have your date of birth as a VC that’s stored in a digital wallet. Now, you can use this VC by itself to prove that you are above 18 years or you can combine it with other VCs to create a verifiable presentation and share it with the chosen verifier.
The number of places where you can use these VCs is virtually endless. Going back to the date of birth VC, you can show it as proof of age to buy alcohol or you can combine it with a bunch of other VCs into a verifiable presentation to open a bank account.
The possibilities and use cases are truly endless.
Secure and Authentic
VCs are a safe and secure way to ensure that your data is seen only by the intended recipient, which is often the verifier, though it can also be seen by companies to whom you choose to sell your data.
All VCs are secured by Public Key Cryptography and digital signatures, so they can’t be seen by unauthorized entities. Further, these encryption mechanisms help the verifiers to attest to the authenticity of the data and the issuer.
In this sense, VCs are a win-win situation for everyone involved. It creates business opportunities for the issuer, secures the data for the holder, and ensures the authenticity of the data for the verifier.
Complete Control over your Data
One of the driving principles of SSI is data control and ownership, and VCs help to achieve that.
Typically, the issuer provides a VC to a holder, which is stored by the latter in a digital wallet. The holder (which is you) has the power to decide what parts of a VC should be combined in a verifiable presentation sent to the verifier.
For example, if an issuer has given your full name, date of birth, and a government ID as a VC, using BBS+ signatures, you can just take one credential, say your government ID, put it in a presentation, and send it to the verifier.
That’s the level of granular control you have over who views your information.
One of the biggest issues with the current digital identity systems is a lack of privacy. Besides hackers, your online activities can be monitored by government agencies, your Internet Service providers (ISPs), and others.
But these issues are non-existent with VCs because every piece of information is digitally signed. The issuer encrypts the data using the holder’s public key, and this credential can only be viewed by the holder, thanks to the public-private key pair in digital encryption.
Hence, no one besides you and those with whom you want to share your data can encroach into your private life.
As governments understand the need for security and privacy, they are pushing towards a decentralized digital environment with the required legislation. A case in point is the EU’s Digital Wallet announcement and the GDPR.
As governments move farther on this front, you need a system that will meet these compliance requirements, and as you have guessed, VCs perfectly fit the bill.
Easy to Implement
VCs are easy to implement from a developers’ standpoint and easy to use from an end-user perspective. Affinidi’s tech stack gives all the APIs and SDKs you need to build a VC-based application, and it also offers support to developers throughout the development process.
As for end-users, accessing and sharing VCs is easy too, as they can hold it in a digital wallet that’s controlled by them, and share it by combining it all in a verifiable presentation. A friendly UX can hide the complexities for the end-user, making it a breeze to securely share credentials with anyone in the world.
Power to Monetize your Data
VCs give you the option to monetize your data with the company you want. This provides two major benefits straight out of the box. First off, you get to make money out of your data instead of an identity provider raking in profits from your data.
Secondly, you know who is using your data and how it’s likely to be used. In this sense, you make money on your terms and through a company or way that’s most comfortable for you.
To conclude, VCs are likely to be a gamechanger and an integral part of the future given the many benefits they offer to individuals, businesses, and the web ecosystem as a whole.