Decentralised identity is the Sign In With Google equivalent for the physical world, except you are in control of your data.
Image Source : Dilbert Strip for October 2010
What is this Decentralised Identity?
To put it simply, just like cryptocurrency changed money to a completely digital form that lived on your mobile wallet, decentralised identity uses blockchain to store and share your identity. Its a little bit more complicated than just storing your driver’s license or passport as pdf, decentralised identity is a secure way to verify and share your identity.
So how does decentralised identity work? Decentralised identity models lets users share identity verifications over a blockchain network. The identity itself is not stored on the blockchain network, instead DID uses verification method that lets you verify a claim without actually sharing the identity. Your identity is with your control at all times and is never actually shared, eliminating most identity theft problems.
Source : GSMA Decentralised Identity
A did identifier looks like this did:example:123456789abcd , different networks can reserve did identifiers like domain names and can then be used to issue identities, so a DID issued by google could look like did:google:1234569abce and a DID issued by the US government could look like did:usgov:abcd1235 You can think of this like the SSN in the US or the PAN in India, it is one single identifier that lets you authenticate across all services, but unlike SSN/PAN nobody can misuse you identity in case of DID because the identifier itself has no meaning unless signed by your keys.
And these keys are never shared, they live inside your mobile device (or a secure server if you choose to) and will authenticate every request for identification. Some protocols also use a different temporary DID for all relationships, ie. the DID for your schoold and your office are two totally randomised values and ensures your DID is never compromised by any single service.
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