Tech Giant Microsoft To Embrace Digital Identity Through Blockchain

Following the alliance with Decentralized Identity Foundation (DIF), tech giant Microsoft has disclosed its strategy to utilize blockchain tech to resolve some of the challenges experienced in managing identities and confidential information digitally, which includes client’s concerns on privacy and safety.

In today’s (13th February 2018) post, entitled “Decentralized Digital Identities and Blockchain – The Future as We See It”, Microsoft announced its embrace of Blockchain tech, which underpins Bitcoin & Ethereum through the Microsoft Authenticator app.

The idea is that DIDs eliminates the possibility of censorship and give an individual full control over their identity and reputation. After looking at various types of decentralized identity systems, Microsoft turned to public blockchain due to their ability to enable privacy, self-ownership, and permission-less access.

The statement from Microsoft reads.

“AFTER EXAMINING DECENTRALIZED STORAGE SYSTEMS, AGREEMENT PROTOCOLS, BLOCKCHAINS, AND A VARIETY OF EMERGING STANDARDS WE BELIEVE BLOCKCHAIN TECH & PROTOCOLS ARE WELL SUITED FOR ALLOWING DECENTRALIZED IDS.”

Identity is one of the long-advertised use cases of blockchain tech that does not have anything to do with payments or currency. In the post, Microsoft indicates toward Bitcoin, Ethereum, and Litecoin as three specific platforms it considers are the suitable foundation for DIDs.

A key takeaway is that instead of relying on third-parties, blockchain proves to be instrumental in putting control back into the hands of the clients as well as securely storing personal information. “Today, clients grant broad consent to a number of apps and services for compilation and maintenance of their information for utilization beyond their control,” the post stated. “With information breaches & identity theft becoming more complicated and common, the client needs a way to take possession of their identity.”

Over the years, a dozen of blockchain plans related to identity has popped up, with Blockstack ID and uPort being two of the most known examples.

Microsoft plans to work with DID method implementations, that follows a definite standard framed by a W3C working group. However, the tech giant has not disclosed specific DID method integration at this point of the instance.

In the past, reviewers have argued that identity system built on public blockchains would be too costly and tricky to scale, but points out that layer-two systems can be utilized to trim down the essential number of expensive on-chain interactions. This is somewhat equivalent to the Lightning Network (LN) which can be used to scale Bitcoin payments better.

“While some blockchain communities have increased on-chain transaction capacity by increasing the blockchain size this move generally demeans the decentralized condition of the network and cannot reach the millions of transactions per second which the system would generate at international-scale. To overcome these technical obstructions, we are collaborating on decentralized Layer that runs atop these public blockchains to attain international scale, while preserving the characteristics of a world-class DID system,”

At this point in time, it is ambiguous what exactly Microsoft gains by supporting the concept of decentralized IDs. However, some inferences can be made from the current position of the Internet. The clearest case for DIDs within Microsoft products would be LinkedIn, which could be viewed as a kind of a reputation method for an individual’s past education and work experience