Decentralized identity can bring the analog world into the digital one


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It goes without saying that connected devices require reliable, distributed ledger and technology-based digital identity solutions. This is an essential requirement for the Internet of Things (IoT). In the machine industry, devices must be able to recognize and communicate with one another; Robust identity management solutions are the key to effectively securing data and processes. But what about the multitude of analog “things” around us? Surely they can also benefit from the advent of digital identity.

Imagine this: you have just returned from shopping or a walk in the park with your pooch when you suddenly discover that the family heirloom ring that has become too loose around your finger is no longer there. You retrace your steps, scan the ground and check the gutters and molehills, but you come back empty-handed. So many aspects of our daily life have shifted to the Internet, with valuable items such as passwords, PIN codes and registration certificates safely stowed in suitable security solutions. You can access these at any time and manage them centrally. Why can’t you have the same for your family ring or other analog valuables?

Unlike your email password, your ring currently only lives in the analog world. You could tag it with a tracking device connected to your phone, like Apple’s AirTag, but this poses privacy and security issues, perhaps a lot more than it actually solves – not to mention being a bulky one and strange accessory to a piece is jewelry. More importantly, we own a non-trivial number of analog valuables, and slapping trackers for $ 40 apiece on everyone is impractical. It’s time to talk about the digital identity of analog things and finally invite our valuable offline possessions into our increasingly virtual world.

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What is decentralized digital identity?

Decentralized identity or DID refers to a digital identifier for something that exists in the physical world. This digital identifier is placed in an immutable distributed ledger and contains a detailed description of the attributes, skills and ownership. In practice, this means that you as the owner of your lost family ring are credible. It accurately describes the ring and makes it instantly identifiable. You can use your credentials to prove that you are the owner; a miniature QR or barcode – or some other type of scannable identifier – attached to the object or lasered is sufficient. Depending on the item, digital tags with additional functions are another viable option.

Compared to a simple tag or other tracking device, digital identity has several other important advantages. It is securely stored due to its support by the distributed ledger technology (DLT) and can establish ownership without leading directly to the owner. If you don’t want to publish your personal information in the ledger – a smart decision anyway – you can create your own verified digital identity and link your analog items to it. Using the example of your lost ring, you have proof that you own the ring and can make it more difficult for unwanted third parties to trace your valuables through pseudonymization.

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Conspicuous possession of inconspicuous value

Analog things have different kinds of values ​​- monetary, emotional, practical – and at any time and for whatever reason they can attract unwanted access and potential theft from evil actors. Establishing a robust system of DLT-based digital identity for valuable physical items has the added benefit of preventing theft, as confirming the origin of a stolen item in the general ledger automatically nullifies the option of resale.

To further prevent attempted misuse, you can create various verifiable credentials for your digital identity. You also decide who you share this sensitive information with – if at all. Thanks to selective disclosure, you can reliably determine your ownership of analog objects without revealing more information than necessary. For example, a public ledger record may list you as the owner of a white porcelain vase with blue floral motifs that is 50.5 inches tall and weighs 14.8 pounds.

Another verifiable ID card allows you to state that the vase is a qianlong – a collectible worth millions of dollars. This information doesn’t have to be public, but you can share it with potential buyers if you part with your precious collectible. DLT-powered digital identity gives you complete control over how much information you publish and how you divide it up to suit your individual property, identification and security needs.

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Identification and authentication on a global level

Cross-platform communication remains a challenge in the digital area, even more so on the analog side. Verifying the identity and ownership of an item across state and language barriers can be a lengthy, slow, and expensive process that involves multiple steps and the services of certified professionals. In the case of particularly valuable objects or real estate, notaries, translators, independent experts and even consulates and embassies are involved in the verification. A system with a unified digital identity can replace lengthy approval and authentication chains with a simple DLT solution that immediately confirms the ownership and properties of an analog object anywhere in the world.

However, digital identity is not only useful for cross-border transactions. Today’s supply chains stretch across the globe, and tracing materials and product components across continents is a tedious task that, despite all odds, remains surprisingly analog. Shipment tracking is still often done by hand and on paper. The likelihood of human error is high and errors transmit and multiply throughout the life cycle of the shipment. An immutable digital identity can accelerate and automate many logistics processes. Special items that require special handling, such as temperature control or motion stabilization, can be paired with sensors that monitor their shipping conditions. In the end, the items reach their destination with an unchanging record of their transportation quality and safety.

Such solutions are not limited to the logistics industry. The world is on the threshold of the post-COVID-19 era and the promised return to international travel. Many of us will take to the skies in search of exciting new destinations, but occasionally our luggage will not travel with us. According to pre-pandemic statistics, airlines around the world move around 25 million pieces of luggage a year. It has probably already happened to you and you know firsthand how troublesome it is to track down and recover your lost luggage. When you pair your bag with a DID, it’s instantly discoverable – you no longer have to look for a black hard case among thousands. Airlines can also mark their baggage at check-in with a DLT-enabled sensor that warns the baggage handlers acoustically or visually if they load your suitcase onto the wrong aircraft.

A digital afterlife for analog things

Analog things get lost or misplaced – that’s their nature. Whether in production, logistics or personal items, such incidents are often costly and stressful. In our increasingly digitized everyday life, there is a risk that our analog property will remain permanently disconnected. Instead of leaving them behind, we can connect them to a digital identity that allows them the electronic afterlife they deserve without invading their nature.

DID does not require digitization of analog objects or expensive sensors or high-tech tags in order to function correctly. Instead, it offers an inexpensive, reliable and versatile way to get offline articles out of the digital blind spot.

The views, thoughts, and opinions expressed herein are solely those of the author and do not necessarily reflect the views and opinions of Cointelegraph.

Dominik Schiener is co-founder of the Iota Foundation, a non-profit foundation based in Berlin. He oversees partnerships and the overall delivery of the project’s vision. Iota is a distributed ledger technology for the Internet of Things and a cryptocurrency. He also won the largest blockchain hackathon in Shanghai. For the past two years he has focused on enabling machine economics through iota.