The Importance of a Decentralized Identity Layer: Implementation and Use on the Blockchain

Technological development causes society to live in a highly interconnected manner that leads to our online identity, or digital identity, exerting an important influence on our lives offline. Although the effects of our increasingly digital world have been overwhelmingly positive, many bright minds have used the shift into a digital age as an opportunity to engage in dark practices by exploiting sensitive information from centralized datastores. The Equifax hacking that resulted in exposed financial information for thousands of consumers as well as the transfer of user information from Facebook to Cambridge Analytica and the relation to the 2016 U.S. presidential election are two examples, among many, of security breaches and violation of data ownership rights in recent memory. As the exploitation of online information occurs with greater frequency, the loss of personal and sensitive information requires us to find a method to secure our online, or digital, identity. The world has expressed their dissatisfaction with the lack of transparency and unchecked power that sometimes results from byproducts of centralized systems like that of Facebook and Equifax. However, the launch of Bitcoin served as a starting point at which society began to recognize the benefits of decentralized networks. From there, the additional security provided by the transparent and immutable nature of blockchain led to the ascension of distributed ledger technology and its applications.

Digital identity on the blockchain is relatively new, but very significant. Primarily, implementing an identity layer on the blockchain gives users a self sovereign identity protocol. What this means is that identity is stored on the decentralized blockchain ledger, not in a centralized database. Further, digital identity can provide blockchain users with a way to create a reputation on the blockchain in order to validate them as a trustworthy user of the network.

As digital identity develops on the blockchain in a variety of forms, it is important to understand what makes each implementation different and how each platform’s verification process operates. Identity layers on the blockchain all utilize public and on-chain transaction addresses as a form of identity, but identity solutions vary regarding their implementation on a third party DApp or a blockchain’s mainnet, and variance in the cost of provisioning a digital identity is significant across blockchains. As blockchain technology develops, a wide array of decentralized identity solutions will exist, and what will distinguish a project’s identity function is ease of use, cost, and the ability for identity to carry across DApps within a blockchain ecosystem.

How Digital Identity Works in the Metaverse Ecosystem

The pillars of the Metaverse blockchain are Digital Identity, Digital Asset, and Value Intermediary, represented by Avatar, Metaverse Smart Token and Metaverse Identifiable Token (MST & MIT), and Oracle, respectively.

The SuperNova mainnet upgrade makes Metaverse the first public blockchain to implement a digital identity layer. The ability for users to create their own asset and attach it to their identity on the blockchain provides a link between people and assets in the blockchain system that personifies user interaction in the Metaverse ecosystem, an aspect that is lacking in other public blockchain networks.

SuperNova solution 1 describes the accessible nature of the Metaverse blockchain and showcases the simple steps users (individuals, businesses, or other entities) can follow to create their Avatar and issue MST or MIT. Further, please see Metaverse Explained: Avatars for an in-depth description of the Avatar functionality.

Here I describe how Avatars contribute to the health of the Metaverse ecosystem in the following ways:

Communication:

Each blockchain user has a public transaction address that serves as his or her anonymous identifier on the blockchain. With the registration of an Avatar, users may attach a name to their public address that can be used in place of the address when executing transactions. This makes the Avatar’s actions on the blockchain identifiable. Using the private key that accompanies the public transaction address and therefore the Avatar, users may sign messages on the blockchain. Users may also send messages to an Avatar that only the Avatar can decrypt using its private key. Given that Metaverse is an infrastructure layer blockchain meant to serve as a platform for blockchain applications, the ability to communicate in a secure fashion promotes interaction among Metaverse users and aligns with Metaverse’s goal of creating a more democratized blockchain ecosystem.

Reputation:

Attaching an identity to a public address allows users to create a reputation on the blockchain. The action of signing a message, using the Avatar’s unique private key, allows other users on the blockchain to verify the Avatar’s signature and leads to the solidification of the Avatar’s identity on the blockchain. Users may also verify the Avatar’s actions on the blockchain through transaction records, now an easier task with an Avatar’s unique name attached to the public transaction address. Moreover, reputation in the Metaverse blockchain has reach; as many projects function within the Metaverse ecosystem, digital identity provides an aspect of security that holds within the entire ecosystem, not just for one business or application.

Coupling token issuance with the identity layer:

The relationship between digital identity and digital asset on Metaverse mirrors the relationship between real life users and their stores of value. In order to register an asset on the Metaverse blockchain, users must first create an Avatar (digital identity). Each asset created is linked to an Avatar who is validated by his or her reputation. This peer to peer validation process creates a zero-knowledge proof that the Avatar and the corresponding asset are trustworthy.

The asset-identity link holds further implications when considering non-fungible assets, known as MIT in the Metaverse ecosystem. Each MIT is unique, and creating the ability to attach a unique identity to each asset allows each MIT to be more easily recognized and validated. The Parcel X and Luxchain projects, built on the Metaverse blockchain, showcase how the implementation of non-fungible assets expands the type of applications that can be built on the blockchain due to the fact that MIT provides the ability to tokenize items as they are in reality. Further, MIT allows for the representation of unique digital items, such as Crypto Kitties, on the Ethereum blockchain.

Metaverse assets are not just a cryptocurrency or a device for monetary exchange, they may represent a variety of assets that are linked to actors on the chain through their digital identity.

A look forward to the next phase of digital identity: Oracles

Oracles will be third party organizations that will act as value intermediaries in the next stage of Metaverse’s digital identity development. These organizations are qualified to act in the Metaverse ecosystem to authenticate or verify assets or information that users register on the blockchain. Similar to the way a user may send a message to an Avatar that only it can decrypt using its linked private key, an Oracle will validate a user’s information by using its master private key to provide a signature on the information. Introducing authentication through an official third party paves the way for tokenization of a wide range of assets and is meant to allow users to transfer many different types of value other than digital currency.

To review digital identity application scenarios, please see the Metaverse Digital Identity White Paper

The status of digital identity in blockchain

The implementations of digital identity on other blockchains are listed here:

Metaverse has introduced a powerful, efficient, and low cost identity layer. Together, digital asset, digital identity, and value intermediary functionalities position Metaverse to host a wide array of decentralized applications. As users realize the full potential of these functions, the Metaverse ecosystem will continue to grow and allow us to enter The New Reality.

Please stay tuned for part 3 of the SuperNova Solution series!