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LearnDecentralized IdentityCore concepts and StandardsUnderstanding Decentralized Identifiers (DIDs)

Understanding Decentralized Identifiers (DIDs)

Decentralized Identifiers (DIDs) are a core component of decentralized identity systems. Unlike traditional identifiers (such as email addresses or usernames), DIDs are self-owned, tamper-resistant, and do not rely on centralized authorities. This guide explains how DIDs work, their structure, and their role in digital trust ecosystems.

What Are Decentralized Identifiers (DIDs)?

A Decentralized Identifier (DID) is a globally unique identifier created, owned, and controlled by an individual or organization without the need for a central registry or authority. DIDs enable users to establish verifiable, privacy-preserving digital identities.

Key Characteristics of DIDs

  • Self-Sovereign – Users create and manage their own identifiers without relying on third parties.
  • Verifiable & Tamper-Proof – Stored on a decentralized ledger or distributed network, ensuring integrity.
  • Privacy-Preserving – Users selectively disclose identity attributes without exposing unnecessary data.
  • Interoperable – Based on W3C standards, enabling use across different platforms and services.

How Do DIDs Work?

DIDs function as a foundational layer for trust in digital interactions. Here’s how they work:

  1. DID Creation: A user or entity generates a DID using a decentralized identity wallet.
  2. DID Storage: The DID is registered on a blockchain, distributed ledger, or decentralized network.
  3. DID Document: Each DID is associated with a DID Document containing metadata, cryptographic keys, and service endpoints.
  4. Verification: Other parties can verify the DID’s authenticity without relying on a central authority.
  5. Credential Issuance: Users receive verifiable credentials linked to their DID from trusted issuers.
  6. Selective Disclosure: Users present credentials to verifiers, proving specific claims without exposing their full identity.

Structure of a DID

A DID typically follows this structure:

did:method:unique_identifier
  • did: – A required prefix indicating it is a Decentralized Identifier.
  • method: – Specifies the DID method, which determines how the DID is created and resolved (e.g., did:ion, did:ethr).
  • unique_identifier: – A unique string that identifies the DID owner within the chosen method.

Example of a DID

did:example:123456789abcdefghi

The Role of DID Documents

A DID Document contains key information needed to verify the DID’s authenticity. It includes:

  • Public Keys: Used for cryptographic verification of credentials.
  • Service Endpoints: URLs pointing to trusted services associated with the DID.
  • Authentication Methods: Mechanisms to prove control over the DID.

Example of a DID Document

{
  "@context": "https://www.w3.org/ns/did/v1",
  "id": "did:example:123456789abcdefghi",
  "authentication": [{
    "type": "Ed25519SignatureAuthentication2018",
    "publicKey": "did:example:123456789abcdefghi#keys-1"
  }],
  "service": [{
    "type": "IdentityHub",
    "serviceEndpoint": "https://hub.getonepass.eu/"
  }]
}

Why Are DIDs Important for Digital Trust Ecosystems?

DIDs play a crucial role in creating trusted, decentralized digital interactions by:

  • Eliminating Centralized Control: Users no longer depend on governments or corporations for identity verification.
  • Enhancing Privacy & Security: Data breaches are minimized, and personal information is not stored in centralized databases.
  • Enabling Cross-Border Interoperability: DIDs work across different networks and jurisdictions.
  • Supporting Verifiable Credentials: DIDs act as anchors for digital credentials that can be verified instantly.

Real-World Applications of DIDs

  • Financial Services: Secure KYC verification for banking and DeFi platforms.
  • Healthcare: Patient identity management and medical records access.
  • Education: Issuance of digital diplomas and academic credentials.
  • Government Services: Digital IDs for online access to public services.

The Role of OnePass Credentials

OnePass Credentials enables organizations to create, manage, and verify DIDs seamlessly. By integrating OnePass Credentials, businesses can build trusted digital ecosystems that prioritize user sovereignty, security, and efficiency.

Conclusion

DIDs are the foundation of decentralized identity, providing individuals and organizations with greater control, security, and interoperability in digital interactions. Understanding and adopting DIDs is the first step toward a more trusted, user-centric internet.