Decentralized IDs (A Partnership with Hela Labs)
In our ever increasing digital age, with blockchain technology being the next catalyst to move from a Web2 world to a Web3 one = identity management has become more sophisticated than ever.
With scams and identity theft being commonplace in today’s world, traditional methods of securing privacy, ownerships and access to data have become obsolete and Velo’s partnership with Hela Labs seeks to address this problem.
DIDs or Distributed Identifiers, provide a secure and decentralized approach to manage online personas and accounts by bypassing traditional centralized modes of authority.
It is essential to understand them on the road to comprehending the future of online security, digital identity and blockchain technology.
What are “Distributed Identifiers”?
DIDs are a novel type of digital ID that empowers their users to manage their online identities without relying on centralized corporations. With DIDs, the user retains ownership of their data, identity and accounts. Because they utilize blockchain technology, they can also be employed on decentralized networks.
They are in a sense, “a ticket to a self-sovereign digital ID” in the coming Web3 world.
How do DIDs work?
Simply put, a DID is in its essence, “a string of characters that serves as an identifier”.
But what is unique about DIDs is the DID Document themselves - a JSON file that contains information about the DID, “including public keys, authentication protocols and service endpoints for communication”.
This DID Documentation is then stored on a decentralized network, thus bolstering the security of the online digital identity.
DID Methods and DID Resolvers
DID Methods are different versions of digital IDs that work on various online systems such as blockchains or decentralized networks and DID Resolvers are basically a software tool that one can think of as a “finder” on the Web3 universe. This allows websites and apps to cross-verify users’ identities in order to set up safe and private conversations.
Applications of DIDs
There are a myriad of uses and coming applications for DIDs from simple authentication processes to complex supply chain management systems. Below are some of the more notable ones:
- Digital Identification Management
DIDs provide a more secured and privy alternative compared to run-off-the-mill traditional digital ID setups. They can be used for Web2 internet services as well as with IOT (Internet of Things) gadgets and even for official government documentations. This approach restricts access to those who own and hold it, or only for third-parties privy to the transaction or data access, thus offering a more robust solution in an age where information and privacy is king especially with the advent of hot wallets, hacks and scams.
- Secure Data Sharing
With DIDs, autonomy over users data can be kept in the hands of the masses and their owners and having a digital key lets you select who can be privy to your data and can be adjusted at any time. Control over access to the data will give the owner another one-up in the next level of data protection and management.
- Decentralized Finance (DeFi)
In DeFi, they can bolster the verification processes of transactions and KYC processes and eliminate the need for a single point of authority unlike CEXs and TradFi platforms because they are not controlled by a single legitimate authority like a bank or a corporation. They are rather, embedded on the blockchain which is akin to a super-secure digital ledger and this makes it harder for bad actors and malicious forces to impersonate your ID or steal users’ info, thereby increasing confidence and security in the daily activities of users.
- Healthcare Records
The healthcare industry can also benefit from these by enabling the creation of secure and unchangeable records of patients data. This will lead to increased efficiency in day to day operations by allowing the information to be easily stored, kept and retrieved and the dependability of healthcare services will also be strengthened by ensuring patients’ information remains safe from bad actors or alterations. The DIDs also provide tamper-proof and unique digital identification for each patient, making it easier for healthcare providers and vendors to access and share information securely. The process is streamlined while maintaining the utmost confidentiality and data integrity.
As mentioned on Hela’s website:
“Distributed Identifiers (DIDs) represent a paradigm shift in the way we think about digital identity. By eliminating the need for centralized authorities, DIDs empower individuals to take control of their own identities, offering a more secure and private alternative to traditional methods. As the technology matures, we can expect to see DIDs becoming increasingly integrated into various sectors, from finance and healthcare to supply chain management and beyond.
In summary, DIDs are not just a technological innovation; they are a step towards a more secure and decentralized digital future. As we continue to explore the potential of blockchain technology and other decentralized networks, DIDs will undoubtedly play a crucial role in shaping the landscape of digital identity for years to come.”
Velo Labs thus is not only building the next generation of financial services in the Web3+ space, but also partnering with other like minded companies to take blockchain services across all industries to the next level.
This partnership with Hela Labs will not only be strategic, but will have real-world use cases and consequences as well.
Written by Sean Lai