Welcome to the new web. It’s not like the old web and it demands a new approach to identity. Data structures and commercial relationships will be markedly different in the Web3 era, requiring verification methods that are more streamlined, secure, and trustworthy to support them.

Existing online identity mechanisms are a poor adaptation of physical ones. All too often, companies use scanned copies of sensitive ID documents such as passports, sent over unsecured channels such as email, which is an inefficient and often times dangerous practice.

Documents can be forged, and identity credentials are usually still centrally held and vulnerable to misuse or theft. Stolen identity information litters the dark web.

The time is right for a new type of identification, created with digital channels in mind. Built for Web3, it will be irrefutable, immutable, and controlled entirely by the person that owns it.

Digital Identity

— The Big Shift

By Tyrone Lobban, Head of Blockchain Launch and Onyx Digital Assets, Onyx by J.P. Morgan and George Kassis, Vice President, Digital Identity Lead, Blockchain Launch, Onyx by J.P. Morgan.

What is Web3?

Web3 is the next generation of the internet, promising a landscape where individuals not only have read and write capabilities on the internet, but also the ability to own and control their data, including digital creations, digital assets and digital identities.

Enter

Decentralization


The developmental stages of the web are intertwined, often overlapping each other and sharing one characteristic – relying on centralized services. As they evolved, they eventually held (and often legally owned) all of the users’ data, from bank balances to personal pictures. Following the natural aggregation of market share and move to cloud computing, a relatively small number of big tech players control most users’ assets and digital identity information.

Web3 will change that relationship, transitioning the creation and storage of assets and identity information to decentralized blockchain models that are often owned and managed by no single entity – the foundation for Web3’s big shift.

That transition also changes the model of digital ownership. In Web3, individuals have full ownership and control of their digital creations and assets and the movement of assets is recorded on a blockchain instead of on a central company’s servers.

Digital identity for Web3


As Web3 decentralizes commerce, identity must also decentralize. Web3 identity credentials will be stored securely on devices owned by users, and records of who signed them will be stored in public data repositories, including blockchains.

These identities will comprise facts about a person such as their name, age, and address, but could also include other information such as music streaming logs, memberships, and credit scores. The owners of that information can use their digital wallets to store their credentials and share them with whomever they choose. Third parties can set up rules for identity criteria based on their requirements.

This decentralized identity model carries several key advantages:

Sovereignty

In a Web3 environment, people control their own identity information. They decide who sees it. They can grant that access at a more granular level, revealing facts about themselves on a need-to-know basis. In the old model, you might have to show your driver’s license just to prove your age, giving the attendant at the liquor store or the bouncer at the bar access to your name and address. Decentralized identity aims to solve for this problem.

Security

When using the old model, you could not be certain how an organization stored your identity credentials or who it shared them with. This led to countless privacy breaches. Decentralization puts you in full control of your identity credentials and makes it accessible on your terms. It also means there are no single points of failure, because instead of allowing third parties to store your data in a centralized server, a third-party would only get access to it for a set period of time.

Immutable and Irrefutable

Encrypted records of digital identity signatures stored on the blockchain make it impractical for a malicious party to tamper with identity information, making it highly trustworthy. A third party will not be able to alter someone’s identity signature.

Sovereignty

Security

Immutable and Irrefutable

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