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Understanding Verifiable Credentials

Understanding Verifiable Credentials

“The Internet” is still evolving

Last month, Canada joined over sixty international partners that signed “The Declaration for the Future of the Internet” which sets out the core vision and guiding principles for a globally trusted Internet. The commitments outlined in the declaration include “a global Internet that advances the free flow of information” and the promotion of “trust in the global digital ecosystem, including through protection of privacy.” The internet, as we currently experience it, provides unprecedented opportunities for people from around the world to instantly connect, do business and express themselves, and continues to transform the global economy. Yet all the day-to-day benefits that we currently experience have created serious policy challenges that many jurisdictions are urgently struggling to address.

The unique digital identity that each of us uses to access the limitless internet-based services underpins every interaction we make online, having replaced traditional physical verification experiences in most of our digital interactions years ago. Now more than ever, however, there is increasing pressure on private and public sector organizations to keep those identities protected and safe.

Who owns “you”?

Since the birth of Web 1.0 in 1989, the vast majority of us have accepted the concepts of online accounts, login information and passwords. On average, the typical internet user uses 100 passwords at any given moment, a combination of personal and professional related data. Not surprisingly, in the wake of an economically catastrophic global pandemic, people’s trust in institutions, government agencies, and the mainstream media is at an all-time low. Concurrently, identity theft and digital fraud are at an all-time high. In this unpredictable environment, it is natural for people to want more control and protection over their digital identity.

To provide the necessary levels of security required for today’s digital reality, organizations and enterprises need zero-trust frameworks that support completely secure access, while also making it transparent and easy to use, so that everyone participating in the new digital reality can benefit correctly from it. Zero trust security frameworks require all users, whether in or outside the organization’s network, to be authenticated, authorized, and continuously validated for security configuration before being granted access to applications and data. This requires redefining the very concept of identity management.

What Are Verifiable Credentials?

As the digital world continues to amplify our personal digital footprint, digital verification processes need to match the pace. A data standard called verifiable credentials (VCs) is already advancing this idea and is the digital equivalent of the paper documents we have used for years to prove who we are in the physical world. In many ways, they’re just like our physical ID cards – individuals can hold these digital credentials securely in a digital wallet and they can be discriminately shared with the tap of a single button. In short, verifiable credentials are data objects (certificates, training documents) consisting of claims made by the issuer (government agency, educational institute) attesting information about a subject (you).

With verifiable credentials, the verification happens digitally and gives the credentials holder the right to control the personal data contained within. This largely automated process saves everyone time while establishing a direct communication channel between stakeholders and serves as a critical first step in securing much-needed trust between all. In this new model, when a VC holder interacts digitally with a verifier organization, it becomes a new consensual, one-to-one digital relationship. The organization and the person can then interact securely, exchanging information and personalized communications. This is a deeper, trusted relationship and connects people and businesses in new ways that go beyond opt-ins for emails, for example, or other permission-based communication channels.

The Benefits of Verifiable Credentials

We’ve outlined below some of the key reasons why verifiable credentials should be embraced as an essential tool of our future identity management planning.

Follow the Principles of Decentralization
  • Verifiable credentials put individuals right at the centre of above framework, as per the principles of decentralization. Today, many identity providers can decide (and do) which apps can be given access to your data, and in the process, creates a centralized and monopolized system. With VCs, the data owners determine the applications that can access their data.
Interoperable Across Systems
  • VCs are interoperable across many networks and geographies and can be used in almost every possible scenario. The number of instances where you can use verifiable credentials is virtually endless. Going back to the date-of-birth VC, you can show it as proof of age to buy alcohol, without having to disclose your home address to the clerk, 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. All VCs are secured by 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.
Protect Your Privacy
  • One of the biggest issues with the current digital identity systems is a lack of privacy. Besides the ever-increasing threat of hackers, your online activities can be accessed and monitored by government agencies, your Internet Service providers (ISPs), and a multitude of third-party applications. These issues become non-existent with VCs because every piece of information is digitally signed. No one besides you and those with whom you elect to share your data can peek into your private life.
Meet Compliance Requirements

The value of verifiable credentials and the critical role they will play to our future digital identities is undeniable. As we enter a new era of online representation, trust in the internet will need to be vigorously robust. The Web 2.0 business mindset we know today has gone from collaborative to extractive, with a few big enterprise players extracting data from the many. Web 3.0, the next iteration of the internet as we know it, will be more like face-to-face interactions: secure, much more trustworthy and, if we choose it, private.

To learn more about how we’re building identity solutions with verifiable credentials at the core of our functionality, visit credivera.com/our-solutions or book a demo hosted by our product experts, at credivera.com/book-a-demo.