Are decentralized identities the way to go?

The much-touted digital transformation has been popular for a long time. Then the virus came and the world of work and private life moved from day to day into cyberspace. Digitization is no longer an empty phrase, we are in the middle. The footprint we are leaving behind on the Internet is getting bigger and bigger, people are becoming more transparent and big data is “getting bigger” from day to day.

Without resistance, the tech quartet of this world – Amazon, Meta (formerly Facebook), Apple and Google – will not undo the digital screws. Therefore, data processing must be rethought as the most important resource of the information age.

The thorny data storage issue

There are two burning questions in particular, as discussions around data retention and the Corona-Warn-App in summer 2020 surfaced: How should data be stored and user rights promoted? Centralized data silos, through which no one knows who can access what information and for what purpose, can almost be prevented with a tracking app. Consumer advocates have protested with good reason: The more convergence of data in a few nodes, the greater the vulnerability to data misuse.

There is a big problem, especially with regard to Google and Co. Bundesdruckerei also describes the fact that internet companies are absorbing more and more access data through their social platforms and networks as an “important development”. If lax security precautions are added to this, massive amounts of personal data could end up in the hands of third parties.

Show me your bones and I’ll tell you who you are

Research by Bayerischer Rundfunk was able to reveal that this threat has been real since 2019. For several years, access to several million data records, including 13,000 from Germany, has been freely available on unsecured servers – including the patient’s name and date of birth. As well as x-rays. To ensure that such an incident does not happen again, concepts of digital identities that protect consumers’ privacy must be developed.

decentralized identities

One of these key concepts is “Sovereign Self Identities” (SSI). Self-sovereign identities put control of identity data in the hands of users, and who decides who can access what information and when — and who can’t. As with the Corona-Warn-App, the magic word is: decentralization.

Data is not aggregated into decentralized networks with a single provider, but is distributed over any number of IT systems. Since hackers will have to attack not just one machine, but countless computers at the same time, the data is tamper-resistant.

The urgency of these identity solutions is growing with the rapid growth of the digital economy. Industry 4.0, the Internet of Things and eHealth are just a few of the future technologies with which secure authentication methods can protect us from identity theft. The legislators, who are gradually laying the course for SSI solutions, have also recognized this.

Politics opens doors to decentralized technologies

The European Union is already promoting identity concepts as part of the European Blockchain Services Infrastructure (EBSI) initiative, the first of which should be ready for market this year. The Federal Government is also supporting corresponding pilot projects as part of the Digital Identities Fair funding project. However, there are still a number of obstacles to be overcome at the technical and organizational levels.

According to the Bitkom Digital Consortium, one of the biggest challenges is “achieving interoperability between different identity providers and technologies.” However, it is unlikely that the big tech companies will voluntarily give up their data monopolies. However, from a consumer point of view, there is no way around it. We will achieve data sovereignty and therefore Self-Determination 4.0 only if the Internet giants allow themselves to be put under a short leash.


This article was previously published in August 2020. It has been revised and updated accordingly for republishing.

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