Microsoft is now moving in order to turn blockchain-based decentralized identity from a lofty aspiration into a business line. In one white paper posted last week, the software giant said that it has the intention to develop two products which are designed to give consumers greater control of their personal data – long the Holy Grail of a lot of technologies in the blockchain space and adjacent industries.

One of those products is the encrypted personal data store or identity hub that is a combination of the personal devices of the user and the cloud storage which Microsoft would offer through Azure, its cloud computing service.

Both products will build upon the DIDs

Even though there are just a few details provided, the general idea is that consumers could actually store identity information in this hub and their permission is going to be required for third parties to access it. This also stands in contrast to the status quo, where the data is held at countless third parties, as well as regularly obtained without the knowledge of the user, much less consent.

The next one among the Microsoft products is going to build is a wallet-like application which people could utilize among some other purposes, in order to manage these permissions to their data, including the ability to revoke them when desired.

Notably, and here is where blockchain actually comes in, both of these products are going to build upon the foundation of decentralized identifiers or DIDs, a specification which is developed under the auspices of the World Wide Web Foundation or W3C.

As it is seen by a lot in the ID community as a breakthrough, DIDs do not require a central authority as they are registered or anchored, on a distributed ledger or some other decentralized system. This actually means that unlike some traditional identifiers DID is always under the control of the user, much in the way a crypto user has domain over her money.

Moreover, the paper reveals that Microsoft is now developing an open-source implementation of DIDs that will work as the next layer on top of some other blockchains. Somehow, like the Lightning Network of Bitcoin is meant to permit a high volume of payments with a low value in the cryptocurrency, reserving the blockchain for final settlement, and the layer two for identity is being invented for world-scale use, based to the paper.

The purpose of the project which Microsoft is referring to internally as ‘side trees,’ is actually to establish a unified, as well as interoperable ecosystem to which developers and businesses can count on to create a new wave of products, applications, as well as services.

While Microsoft didn’t give an actual timetable for any of these projects, taken together, these steps imply that the company is moving up its investment in self-owned identity beyond some previously reported participation in the Decentralized Foundation or DIF as a founding member.

The paper declared that each individual has a right to an identity which they own and control. It also added that they are aspiring to make DIDs a first-class citizen of the Microsoft identity stack.

Stepping back, as a decades-old, as well as multinational corporation, Microsoft may look like an unlikely champion for this decentralist vision for some.

Still, while most of the components of the new system Microsoft is building would operate off-chain, the advent of blockchains clearly fired imaginations, at the Redmond, which is a Washington-based company and elsewhere in the ID community.

Microsoft joined the DIF as the company wants to make sure that the systems that are being built today do not end up becoming new islands such as the social media islands of today, where you cannot connect an identity so said that in the following few months Microsoft is going to increase the scope of identity types that Active Directory, its enterprise ID system, can actually recognize to include blockchain-based decentralized identities. This is going to permit a company to quickly onboard a new hire, in that way identifying a decentralized ID which she controls and associate with her new corporate employee ID.

Microsoft is not the only one contributing to the emerging field

To be sure, Microsoft is actually not the only well-known company which contributes to this emerging field. The co-founder of the Internet Identity Workshop, Kaliya Young, which is a semi-annual gathering of ID experts and innovations, noted that some other big corporations, which include IBM, as well as Accenture and RSA, belong to the DIF. She credited IBM in specific for its work moving forward some open standards for DIDs, as well as a related W3C initiative which is called Verifiable Credentials.

Moreover, Drummond Reed, the chief trust officer at blockchain ID startup Evernym, as well as chair of the Sovrin Trust Framework Working Group, has noted that some other companies, which include all the ‘stewards’ which are operating nodes on Sovrin network, which is a group that includes IBM and Cisco, was endorsing DIDs and portable digital credentials as the foundation of decentralized identity for the past year.

However, if it follows through on the commitment of the white paper for building products such as the identity hub, Microsoft may become the first household name in a field to come up with a mass-market solution.

However, some of the members of the ID community also believe that work of this scale by a giant corporation such as Microsoft have to be done with more transparency.

The CEO of blockchain data platform Tierion and a member of the DIF steering committee, named Wayne Vaughan said that he does not know what Microsoft developed, and he has not seen any actual code.

He also believes that if some corporations such as Microsoft do not make their work more transparent, some other big players in possession of the identities of users, such as Google and Facebook, might feel like that are not involved. So they might refuse to participate in the further adoption of the solutions which are needed to be broadly accepted to succeed.

In the next five years, people will see the adoption of the tools

The CEO and founder of payments startup Digital Bazaar, as well as an active participant in a few W3C working groups, named Manu Sporny,  said that they are hoping that Microsoft is going to join the work on Decentralized Identifiers and Verifiable Credentials which are now occurring at W3C.

Sporny also said that he is sure that in time those companies are going to do the right thing, and join the international standards efforts in the space as they have done a lot of times before that.

The principal program manager at Microsoft, named Ankur Patel, responded to these concerns, saying that they are committed to establish Open Standards and contribute to Open Source to make Decentralized Identity successful.

As they are making some further progress, they are going to make appropriate contributions too. With such a vibrant space, there are actually many such chances to work on common standards.

He also said that they continue evaluating and are going to participate in the one who is most meaningful. They are also committed to working with DIG, W3C, and some other industry or standards group which they believe can help realize a successful Decentralized Identity platform.

In any case, as the work on some different concepts and implementations is accumulating, people can expect to see the first publicly available projects with the use of decentralized identity come to live in 2019. According to Young, particularly pointing at the work that was done by the U.S. credit union consortium CULedger, as well as the Canadian Province of British Columbia.

Young concluded that in the following five years, people are going to see the wide-scale adoption of the tools. Identity is complex and decentralized identity solutions which put the user in the center of their own management of credentials is actually the only way through this complexity wormhole.


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