The world is going digital, and the pace at which our lives happen online is ever-increasing. In the digital world, our identities serve as gateways to access online services, be it for work or personal use. However, this very gateway is one of the most vulnerable when it comes to being exploited by hackers.
The compromising of credentials gives malicious actors to all kinds of confidential information stored on apps or services we access, potentially enabling them to enter and compromise enterprise networks and data, and more.
According to a 2022 study by Identity Defined Security Alliance (IDSA), 84 per cent of businesses surveyed had experienced a data breach due to identity-related vulnerabilities in the past year. What’s unfortunate is that, in hindsight, 96 per cent of those attacked indicated that focusing on better identity-related security practices could have prevented or at least minimised the impact of the breach suffered.
The prevalent approach of passwords and multi-factor authentication is clearly failing at protecting our data online. And with the upcoming Web3 movement that is slowly gaining traction across every sector and industry, it’s high time to relook at identity and access management.
Two-factor authentication and multi-factor authentication technologies also lack the resilience to tackle the digital transformation that Web3 will bring about. Digital identities based on the blockchain could offer some hope, not just for the Web3 wave but also for existing Web2 services for enterprise and personal use.
What are decentralised digital identities (DIDs)?
As the name suggests, decentralised digital identities (DIDs) are created and stored on blockchain networks in a trustless, permissionless, immutable, and cryptographically secure manner.
Powered by distributed ledger technology, these blockchain-based IDs are tamper-proof and nearly impossible to spoof or compromise. Storing highly confidential data on the blockchain, such as our credentials or identities, also enjoy the power of decentralisation – eliminating a single point of failure, such as a database that can be hacked and leaked by threat actors.
Also Read: How a decentralised localisation and building a community of trust can lead to global success
The blockchain-based infrastructure on which DIDs are developed, maintained, and used makes them not only more secure but also far more versatile. Unlike our email addresses that are used to create accounts on various online services and require passwords that are cumbersome to remember, update frequently, and manage, DIDs are inherently more resilient to hacks.
Security is inbuilt into a blockchain network, offering higher assurance that your digital identity on the blockchain remains protected and your data safe. DIDs offer a wide range of use cases, from accessing decentralised applications (dApps) in Web3 to handling robust identity and access management within enterprise networks – hosted centrally, in the cloud, or even in an IoT environment.
How do DIDs work?
A digital identity created on the blockchain can contain confidential information about a user, such as a name, password, government-issued ID data, IP address, device data, date of birth, and more. It can serve to authenticate the user’s identity online, but based on infrastructure that enjoys several security-related benefits of the blockchain.
Blockchain-based digital identities can leverage real-world off-chain data, store them securely on the blockchain, and be used to generate unique and tamper-proof public and private keys. The user can then use the public keys to gain access to connected online services that support DIDs, while the private keys secure the user’s DID.
Zero Trust: Enhancing the power of digital identities (DIDs)
A decentralised digital identity offering can be further secured using robust cybersecurity technology such as Zero Trust. The Zero Trust security framework works on the principle of “never trust, always verify”, offering micro-segmentation of the application of DIDs.
Zero Trust-powered digital IDs developed on blockchain technology can be used as many times as required to authenticate access to each and every online service through each and every device required or operated by the end user. It takes no chances and offers higher control over access management to administrators and developers offering online services to consumers/end users.
What can decentralised digital identities be used for?
There are several applications where a solution like the one discussed above could provide robust security. Here are some of the most common applications of Zero Trust powered DIDs:
Web3
Web3 is the decentralised web where the concept of conventional identity ceases to function. Accessing a wide host of Web3 dApps is possible with a single digital identity.
Such a DID can be used to access online services in the decentralised internet – the future of how we live and work online, be it for gaming, decentralised finance (DeFi) services, metaverse, social networking, and even work.
Traditional enterprise cybersecurity
Several organisations worldwide have already started exploring the use and deployment of blockchain-based services, both internally and for customer-facing applications. These decentralised services offer higher levels of security and privacy for enterprises, their employees, and their consumers.
Also Read: Crypto governance: Adopting a decentralised approach to governance
However, to truly enjoy the benefits of this superior technology requires shedding conventional approaches to securing it and adopting more capable cybersecurity technology.
This is where Zero Trust powered DIDs come in – they bring in higher levels of security to access blockchain-based enterprise and infrastructure services. In addition, they are also more scalable and flexible than traditional identity and access management solutions, offering cost efficiencies unseen previously.
Challenges in the adoption of DIDs
Now that you’ve read so far, you must have realised the truly game-changing potential of this emerging technology. However, what’s interesting is that DIDs have been around for a few years now – they’re not exactly brand new in the tech industry.
However, their adoption remains extremely low among organisations, even the tech-savvy ones that have moved enterprise apps and services to next-gen technologies like cloud, IoT networks, or even the blockchain itself. This is because of severe apprehension among Information Security executives towards this decentralised technology.
The hesitation in upending a conventional approach and trying something radically different that requires significant change keeps most enterprise IT leaders away from enjoying the benefits that blockchain-based DIDs have to offer.
Adopting and driving such robust technology into the mainstream requires IT leaders to convince their corporate peers of this technology’s potential. They must be willing to experiment with DIDs, launch pilot projects internally, assess their effectiveness and monitor the improved security and cost efficiencies on offer.
Final thoughts
The cyber threat landscape is rapidly evolving, and hackers are innovating at a faster pace than businesses and consumers. It’s time to stop playing catch-up and deploy reactionary solutions to solve cybersecurity challenges.
Technology like DIDs can give enterprise cybersecurity a much-needed boost and secure their sensitive data and applications not only from present-day vulnerabilities but also those that could arise in the future.
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