Demystifying Digital Identity (1/2)

What is Identity?

A partial set of discrete problems “identity solutions” may be targeting

The role of identity in your product

  • Eliminate friction in signups, authentication, and engagement
  • Deliver the richest possible experience, with little extra work
  • Focus on your core value-add, without building new or redundant infrastructure in-house
  • Build with a simple, elegant user model that can grow with your needs over time

Identity needs evolve with growth

The demands of managing a user base change quickly as your product grows.

  • Profiles: Should I implement 0auth or an IPFS hash mapped to a key? But what if the user rotates keys or uses more than one key?
  • Data storage: Should I store data in a Textile ThreadsDB? But how do I allow users to manage access control without adding more key types and friction?
  • KYC/Proof of human: Should I use a service like Passbase or tech from Democracy Earth? How do I map this proof to existing users?
  • Anti-Sybil: Should I use a service like BrightID or Idena? Then how do I map their graphs to my user base?

Identity is the infrastructure that lets you effectively tie together any capabilities that relate to your users

The problems of building without proper identity infrastructure

🔑 Single key pair identities

  • Compromises privacy: There is no chance of segregated or private activity, since all transactions by the same ‘identity’ must happen with the same public key.
  • Creates fragility: When keys are used for signing and/or encrypting data, then all user data and history related to your product is lost when their key is lost or changed/rotated.
  • Creates silos: Information can be accessed by that specific key only, with no chance of interoperability and composability across wallets and networks. This is counter to the vision of Web3.
  • Adds complexity: Adding distributed databases and other user technology to your stack is difficult since they operate with different cryptographic identity and access control systems.
  • Foregoes network effects: You have to bootstrap your own user network, profiles, and data from scratch rather than draw on existing data to easily onboard users and jump past a cold start.

🔗 On-chain, network-specific identities

  • Compromised privacy: Using on-chain registries or smart contracts for storing identity information (such as ERC-725 or ERC-1056) is highly likely to compromise user privacy or control. PII should never go onto an immutable network or datastore.
  • Network lock-in: Requiring creation of different identities for each network you or your users leverage leads to a terrible developer and user UX in a cross-chain world.
  • Technology lock-in: More time, cost, and complexity to manage as new blockchains, technologies, and user patterns emerge.
  • Limited interoperability: Inability to easily draw on data or identities from other networks.

📩 0auth logins

  • Backend complexity: The need to build and maintain user tables to keep track of internal mappings between 0auth tokens, your internal user identity, your users’ blockchain account, and other user information like assets, transactions, and data.
  • Fragmented user data: No association between the login method and other web3 experiences. This means that developers miss out on access to the open network effects and data history built around users’ keys as usage of other web3 products grows.
  • Reliance on third-party auth: The authentication capability relies on a middleman service that sits between you and your users, adding both risk and complexity.
  • Expensive and bulky: Web2 middleman services don’t scale for highly used, lightweight apps; cryptographic authentication is not just more secure, but far more efficient.

⚒ Custom identity solutions

  • High risk: Expensive and critical risks could easily arise by accidentally compromising user privacy, missing security vulnerabilities and fragility (e.g., key revocation), and meeting regulatory requirements (GDPR and right of users to delete data). Wading into this territory without a deep understanding of what has made identity challenging for decades is a big burden to take on. At best it adds massive complexity, and at worst it can permanently compromise the trust of your users and/or developers.
  • Tech fragility: Custom solutions usually only function for a bespoke, specific, predefined use case. They don’t scale well to other new circumstances within your application, or use cases (and interoperability) beyond your app.
  • Ecosystem exclusion: Custom solutions lock your users (and their identities) out of future identity-related advances developed by the broader community, such as better recovery options, new authentication providers, new databases, and services. To be easily usable, identity systems must “speak the same language’ in cryptography and schema, and custom solutions usually will not.

Identity as a unifying advantage

Shared networks and network effects is the biggest GTM advantage that Web3 has over Web2. Shared identity is the key to leveraging that.



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