Are decentralized IDs a question of culture? Experts discuss Web3
As digital identities sweep the world, more technologists are looking at how to ensure identity privacy and security by building them on Web3, a decentralized online ecosystem operating on the foundations of blockchain technology.
A panel of experts discussed the possibilities and limits of decentralized and self-sovereign digital identities last week in a roundtable organized by the McCourt Institute in partnership with the Human Technology Foundation (HTF).
Raphael de Cormis, vice-president of Thales Digital Factory, says that we are currently in the “third wave” of digital identity, in which everything will end up on users’ phones. And while the format of digital IDs has been dictated by technology, culture and geography have proved to be very relevant in choosing identity providers. De Cormis identifies three main types of providers.
“The first one, the most obvious one, the closer to the users are the Big Techs because they’re already in the pocket of everybody, so they could be the global ID provider,” says de Cormis. “Second type of player is states themselves, they are already issuing identities, so they could extend it in the digital world and issue digital IDs that could be loaded to different places.”
The third type, consortiums of large operators, are present in some parts of Asia and the Nordics, where all digital ID transaction authentication is done through the banking system.
“The trust is neither in the big tech nor in the states: It’s either banks or telecommunications,” says de Cormis.
But some don’t want either public or private players controlling their digital IDs. Ingo Rübe, founder of KILT Protocol, a blockchain for decentralized identifiers (DIDs), argued in favor of Web3 technology that allows users to manage their digital identities in a decentralized way.
Central power over identities can be given to tech companies such as Facebook or Google which can become dangerous because they decide what to do with the credentials without users taking part in the transactions. Governments can also hold power over digital identities but this potentially opens individuals to government control.
“In the centralized world, you have always one server where everything is stored or where a lot of things are stored which somebody controls [who] can possibly switch things off, delete them, add things, whatever,” says Rübe. “In a decentralized world, everyone is basically responsible for holding their keys, holding their credentials.”
Decentralized identity solutions are not without issues. The blockchain industry, which is creating new decentralized and web3 solutions, puts security first which sometimes gets in the way of user-friendliness. The fact that a solution is decentralized, is not enough for adoption, says de Cormis.
“User experience always goes over safety or privacy and so on for most for massive adoption,” he says.
Culture and geography may play a role in choosing Web3 as well. OECD’s policy analyst Cecilia Emilsson says that some countries in the Nordics have witnessed a high level of adoption of digital ID solutions meaning there are also high levels of trust in institutions.
“But then in other countries, [decentralized identities] is a natural way to go,” she says.
OECD issued a Recommendation on the Governance of Digital Identity last week which is meant to provide guidance for countries adopting digital IDs, especially those that are struggling. While the intergovernmental organization supports more data protection and ownership, it does not have a stance on decentralized ID products.
Ultimately, however, Web3 technology will not gain importance through a top-down approach from governments or international bodies, says Rübe.
“What comes first is industry,” he says “Industry starts making money, then it becomes the standard and then later the governments jump on it.”