Microsoft Tests New Blockchain Identity Verification Systems to Decentralize, Own and Control Your ID


Microsoft is Testing New Blockchain Identity Verification Systems

Microsoft has been exploring blockchain technology for several years. Now, according to reports, the tech giant is testing new blockchain-based identification products.

The goal is to turn blockchain-based decentralized identity verification systems from dreams to reality.

Microsoft released a whitepaper earlier this week explaining that it intends to develop two blockchain ID products. Both products aim to give consumers greater control over their personal data – something that many people believe is one of the greatest benefits of blockchain technology.

One Microsoft product is an encrypted personal data storage system or “identity hub”. The hub combines the user’s personal devices and cloud storage data, including storage space offered by Microsoft through its cloud computing service Azure.

The whitepaper doesn’t go into great detail about how this system would work. However, the general idea is that consumers can store identity information in the hub, then control who accesses that data. You could grant permission to a third party to read that data, for example. This exists in contrast to today’s system, where third parties control your data and can access that data whenever they please. Users have limited control over who views their data or how their data is used.

Microsoft’s second product is a wallet-like app that people could use to manage data permissions, including the ability to revoke access to data at any time.

Microsoft’s Blockchain ID System Uses a New Identification Technology Called DIDs

Both ID verification systems proposed by Microsoft rely on blockchain technology. They’re both built on a foundation of “decentralized identifiers”, or DIDs, which is a specification developed under the World Wide Web Foundation (W3C).

DIDs are seen as a breakthrough in online data management technology. DIDs have no central authority because they’re not registered or anchored on a distributed ledger or another decentralized system. Just like crypto users always have control over their own money, DIDs allow users to always control their own identity.

In a traditional system, your phone number or Twitter handle is publicly-accessible information. With the DID system, you can choose to reveal your identifier only to certain individuals, as secured by blockchain.

Microsoft’s whitepaper also explains that the company is creating an open source implementation of DIDs that would work as a second layer on top of multiple blockchains. Theoretically, Microsoft’s system could be used by other blockchains to offer similar identity management solutions.

Microsoft’s open source DID implementation has been compared to the Lightning Network on BTC, which is designed to facilitate large numbers of transactions using a side-chain. Similarly, Microsoft’s system would be able to authorize large numbers of identity verification's without being restrained to the low scalability of a particular blockchain.

Microsoft doesn’t actually call these features “sidechains”. Instead, Microsoft calls them “side trees”, defining their goal as to:

“establish a unified, interoperable ecosystem that developers and businesses can rely on to build a new wave of products, applications, and services.”

Microsoft’s Identity Verification Work Has Been Criticized

Some members of the community believe Microsoft is developing the blockchain-based identity verification project with inadequate transparency.

As reported by Coindesk:

“Some members of the ID community believe that work of this scale by a giant corporation like Microsoft should be done with more transparency.”

Microsoft has been soliciting input from the community and their software is open source, but some people are criticizing Microsoft for developing the software behind closed doors before releasing it publicly.

The problem isn’t just with trusting Microsoft: the problem is with other tech companies moving forward. If Microsoft continues to dominate the ID verification space, then companies like Google and Facebook might feel like they’re not involved, then refuse to participate when the solutions start to be adopted.

Despite the controversy, however, it’s largely seen as a good thing that Microsoft is investing significant resources in blockchain-based identity verification solutions.

No Release Date Announced

Microsoft has not announced a release date for either of the two blockchain-based identity verification products above.

However, you can view the 23-page whitepaper called “Decentralized Identity” from Microsoft here.

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