What on Earth is ERC725? The Answer to the Question of Self-Sovereign Identity Management on Blockchain

The one response that dApps, and the blockchain world for that matter, can give to the world of centralized third parties is one ad-libbed from Vladamir Lenin, which is that Decentralized Apps and blockchain will soon ‘shuffle their cards and spoil their game'.

But while there's a lot to keep dApp and blockchain enthusiasts excited, one area remains a challenge, and that's user identity management, and it's a critical area that dApps need to wrestle away from third parties. Luckily, it's a job that ERC725 feels up to the task of completing.

The product of the creator behind the ERC20 token standard on the Ethereum blockchain, Fabian Vogelsteller, the ERC725 Standard was initially developed on the 2nd of October 2017. Since then, it's been adopted by a number of blockchain projects, the aim? to incorporate decentralized identity standards into peer-to-peer marketplaces.

Nice to see some actual work in progress on #ERC725 from @originprotocolhttps://t.co/vObO2B1j3k — Fabian Vogelsteller (@feindura) April 19, 2018

How ERC725 Can Solve the Issue of Identity

One of the most prominent projects on blockchain that uses the ERC725 standard is Origin Protocol, and it stands as a shining example of what kind of benefits it, as a protocol, can provide, including the benefits of having a blockchain-based identity standard. It also helps to serve as a model of how managing user reputation and trustworthiness on blockchain can function, especially in peer-to-peer marketplaces.

The best way to think about it would be like a dApp version of Airbnb, which requires users provide some form of identity in order to prevent fraud or illegal activities. In the current dApp landscape, the only way to have this kind of system is to use a centralized third party for identity management, or an Oracle platform like ChainLink which will hypothetically integrate with other third parties.

In a reply to a number of comments via his Github account, Vogelsteller expressed the dire need that blockchain and dApps had for identity management.

“Currently everybody collects all information about you separately to make sure they know who you are …” Vogelsteller continues “A standard will help insofar that everybody can auto check certain claims, and therefore don’t need to store actual details about you anymore, as they—as long as they trust the claim issuer–don’t need to have the actual information. The current over-collecting is because of lack of a better system.”

Under the Hood – How ERC725 Works

Using Origin Protocol as a model, the ERC725 is put to use by having users verify their identity issue through an ‘identity contract' which contains a valid claim issued by the platform they are seeking to verify themselves on.

The issuer would then provide the user with a cryptographic signature, serving as verification that the user possesses particular email, phone, and biometric data, according to Vogelsteller, all of which help to create a unified identity for the individual.

Harkening back to the comparison to Airbnb, if that user wanted to rent out a property on the system, that same system would set about investigating the individual in order to assess their credibility. One way that ERC725 does this is through retrieving the public key from the claim signature, the listing contract would then verify it's still valid according to the contract issued by the dApps, allowing for the transaction to proceed as normal.

Future of Decentralized Identities

Thanks to the ERC725 Identity standard, a new environment could be created between dApps, one in which contracts are able to accept claims issued by a dApp or blockchain platform, allowing for an identity to be validated, while providing distributed, interoperable identity verification across them, making the process seamless for the user as well.

Even though the ERC725 Identity standard is still in its relative infancy at this moment in time, it's already being factored into integration by developers like Origin Protocol. Meanwhile, countries like Thailand are already looking into the matter of identity verification and management, with ERC725 certainly being up for consideration.