Decentralization digital identity: A new paradigm for reshaping the trust system

In today's digital economy, personal data has become a valuable resource. Every time we go online, we may need to provide a large amount of personal information, such as our birthday, phone number, and so on. This data is used by companies for profit, by governments for record-keeping, and may even be stolen by hackers. To prove our identification, we often have to provide more information than necessary.

However, Web3 technology is opening up a new possibility: a truly user-controlled identification system. Decentralized Identity (DID) allows users to fully own their digital identity and flexibly decide what information to share and with whom. This article will explore the operational mechanisms of decentralized identity, potential applications, and its growing importance.

The Working Principle of Decentralization Identity

DID can be understood as a self-created "digital passport number." It differs from electronic mail or government ID assigned by third parties, as it is generated by the user themselves and recorded on decentralized networks such as blockchain. This identity cannot be revoked and does not rely on any specific platform or institution.

Related to DID is the "Verifiable Credential", which is an electronic copyright certificate issued by a trusted institution, such as a driver's license or diploma. These credentials are stored in the user's digital identity wallet, similar to a secure application vault. DID serves as the core anchor for identification, with each credential linking to specific personal information.

The main advantage of this system is that it no longer relies on centralized databases, thereby reducing the risk of data breaches. Users are no longer tied to a specific platform, and the identification process can be completed instantly through encryption technology. This means that users no longer need to upload identification or fill out a large number of forms to register on new platforms. The system inherently supports interoperability, allowing a digital identity to be used across multiple scenarios, such as airports, hospitals, emails, etc., while users always retain control over their data.

Evolution of Identity in Web3

The concept of "having one's own digital identity" has long existed. For example, during the NFT boom of 2021-2022, millions of users registered their own Ethereum Name Service (ENS) domain names, which not only made it easier to remember but also became a form of personal branding.

The popularity of ENS reflects a deeper need: users want to control their online identity and data flow. At the same time, the rise of personal avatar NFTs and anonymous identities also indicates that identification can be public without having to expose real information.

These trends herald the emergence of a new type of identification: cross-platform, decentralization, user autonomy, and privacy protection. Today, this identification is no longer limited to avatars or nicknames, but is gradually evolving into a tool and infrastructure that connects the real world.

KILT Protocol: The Practice of Decentralization Identification

KILT Protocol is currently one of the most active Decentralization identity projects. As an identity protocol built on Polkadot, it allows organizations to issue and verify credentials that are stored by the users themselves. Users can complete identification without uploading sensitive data.

KILT has been applied in multiple real-world scenarios:

• Gaming: Players can prove ownership of game assets and reputation without exposing their real identity.
• Enterprises: Optimize KYC processes and credential verification, accelerate user onboarding, and reduce compliance risks.
• Physical Information Network Project: Verifying participants' identification in physical and digital systems.
• AI tools: Verify content sources and establish the foundation of "human existence".

The common advantage of these applications is that users can verify their identification without losing control over their data, while the trust within the system is verifiable, transferable, and privacy-protecting by default.

Challenges Facing Decentralization Identification

Although the basic architecture of decentralized identification has been established, there is still a long way to go for widespread adoption. Factors such as lack of standardization, unclear regulations, and the need for improved user experience may pose a high initial usage barrier for ordinary users.

However, there has also been encouraging progress. The World Wide Web Consortium (W3C), the global network standards organization, has officially recognized DID and verifiable credentials as web standards. This signifies that Decentralization identification is no longer a small-scale cutting-edge experiment but has become an important component of future web architecture.

Nevertheless, there are still some issues that need to be addressed:

• Can privacy regulations keep up with technological development?
• Can users trust a system that they might not fully understand?
• Can the login experience be as simple as mainstream platforms, without requiring users to trade their data for convenience?

Polkadot: The Cornerstone of Building Digital Sovereignty

Polkadot founder Gavin Wood has consistently emphasized that digital identity is the key to a more open and equitable internet. His vision is "self-sovereignty"—users have control over their own data, rather than handing it over to platforms. At a conference in 2024, he presented a series of important concepts: privacy-first, selective disclosure, and decentralization of individuals.

Wood believes that the core of Decentralization lies in empowering individuals with the ability to act autonomously. This is why it is necessary to establish an infrastructure that allows people to exist independently in the digital world without relying on centralized platforms.

KILT is the practical embodiment of this concept. As part of the Polkadot ecosystem, KILT provides a scalable, secure, and interoperable system for the issuance and verification of identification credentials. It leverages Polkadot's shared security, low fees, and multi-chain connectivity advantages, making the construction of decentralized identification more sustainable and practical.

Polkadot Promotes the Large-scale Application of Decentralization Identification

Polkadot's multi-chain architecture and neutral design make it particularly suitable as an identification infrastructure. Developers are leveraging KILT to meet the practical needs of various industries, from reusable KYC to AI, physical information networks, and privacy-preserving identity layers in gaming. Since KILT operates within the Polkadot ecosystem, credentials can flow between different services and communities, achieving continuity without sacrificing privacy.

For Polkadot, identification is not just an additional feature, but the foundation of its long-term vision: to build a more private, interoperable, and user-controlled internet.

Conclusion: Reconstructing Digital Identity

The current login systems are primarily designed for the platform rather than for the users. They trade access for data collection at the expense of user privacy and autonomy. Decentralization of identification is redefining this model, allowing users to regain control over their digital identity, deciding what to share, when to share, and with whom to share.

Although decentralized identification is still in its early stages, the ecosystem has already begun to take shape. From standard setting to practical applications, there are already real-world cases in fields like AI, physical information networks, and gaming. Web3 is not just about tokens and technology; it is a transformative process that grants people "digital identity sovereignty." The identities of the future will be sovereign, interoperable, and user-controlled, and Polkadot is working hard to make this future a reality.