Last week when Facebook unveiled plans for Libra, their new cryptocurrency, everyone focused on how this new digital coin would impact global financial markets and rightfully so. It was, after all, a financial instrument that we were talking about. But hidden in their white paper was mention of an idea that would go hand in hand with a digital currency: the formation of a definitive decentralized digital identity for users. Something that would enable people without government issued forms of identification to secure loans and otherwise control their own data as they move throughout the world wide web and the real world. Which makes Libra a far more valuable idea than if it was just a pure currency.
MIT Technology Review explains:
“But what is a ‘decentralized and portable digital identity’? In theory, it provides a way to avoid having to trust a single, centralized authority to verify and take care of our identifying credentials. For internet users, it would mean that instead of relying on Facebook or Google’s own log-in tool to provide our credentials to other websites, we could own and control them ourselves. In theory, this could better protect that information from hackers and identity thieves, since it wouldn’t live on company servers.
The concept (sometimes called ‘self-sovereign identity’) is something of a holy grail in the world of internet technology, and developers have been pursuing it for years. Big companies including Microsoft and IBM have been working on decentralized identity applications for a while now, and so have a number of startups.
But it’s more than just an internet thing. For the roughly one billion people around the world without any kind of identifying credentials at all, such technology could make it possible to access financial services that they cannot today, starting with things like bank accounts and loans.
Helping some of those people must be part of what Facebook meant when it said in the Libra white paper that the new system is intended to ‘serve as an efficient medium of exchange for billions of people around the world’ and ‘improve access to financial services.’ In some cases the currency itself might be able to do that, but in others it’s likely that users will need some form of identification to access a particular service. That’s probably why Libra’s developers call an open, portable identity standard a ‘prerequisite to financial inclusion.’”
So clearly this is a very big deal, “somewhat of a holy grail in the world of internet technology.” If that’s truly the case then we may have Facebook to thank for finally figuring it out. See, Facebook isn’t all bad. It may wind up saving the world after all.
Is Self-Sovereign Identity the Greatest Idea Ever?
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