Use Cases of Decentralized Identity
Decentralized identity (DID) is transforming the way individuals, businesses, and institutions manage and verify identity. By using verifiable credentials and decentralized identifiers, DID provides secure, privacy-preserving, and efficient identity solutions across multiple industries. This guide explores real-world use cases where decentralized identity is making an impact.
1. Secure Online Authentication
Problem
Traditional login systems rely on passwords, which are vulnerable to phishing, credential theft, and data breaches.
Solution with Decentralized Identity
- Users log in using verifiable credentials instead of passwords.
- Eliminates reliance on centralized identity providers.
- Enhances security while improving user experience.
Example
A user accesses an online service using their decentralized identity wallet, proving their identity without entering a password or sharing unnecessary personal data.
2. Know Your Customer (KYC) & Financial Services
Problem
KYC processes are time-consuming, expensive, and involve repeated identity verification across multiple institutions.
Solution with Decentralized Identity
- Users hold a reusable, verifiable KYC credential issued by a trusted entity (e.g., a bank or government).
- When opening a new account, users share their credential instantly without undergoing repeated verification.
- Reduces fraud and compliance costs.
Example
A fintech platform enables users to complete KYC verification in seconds by accepting verifiable credentials from a certified issuer instead of requiring manual document uploads.
3. Education & Employment Verification
Problem
Academic degrees and professional certifications are often difficult to verify, leading to fraud and inefficiencies.
Solution with Decentralized Identity
- Universities issue verifiable credentials for diplomas and certificates.
- Employers verify credentials instantly without contacting the issuing institution.
- Reduces fake credentials and speeds up hiring processes.
Example
A job applicant shares a verifiable credential of their degree from their digital identity wallet, and the employer instantly verifies its authenticity without calling the university.
4. Healthcare & Patient Identity Management
Problem
Medical records are often fragmented across different providers, making it difficult for patients to securely access and share their data.
Solution with Decentralized Identity
- Patients hold verifiable credentials for their medical records and insurance information.
- Secure sharing of records with doctors, pharmacies, and insurance providers without exposing unnecessary data.
- Prevents identity fraud and enhances privacy.
Example
A patient visits a new doctor and grants access to their verified medical history without needing to request records from multiple hospitals.
5. Government & Public Services
Problem
Citizens need to provide identity verification for services like voting, social benefits, and travel, often requiring paper documents.
Solution with Decentralized Identity
- Governments issue digital IDs as verifiable credentials.
- Citizens use their decentralized identity to access public services online and offline.
- Reduces identity fraud and bureaucracy.
Example
A citizen uses their government-issued decentralized ID to prove their residency for accessing social benefits without submitting physical documents.
6. Cross-Border Identity Verification
Problem
Individuals moving across borders often face challenges in verifying their identity for employment, banking, and services.
Solution with Decentralized Identity
- Individuals hold a portable, verifiable digital identity accepted across different countries.
- Eliminates the need to repeatedly verify identity in each new location.
Example
A startup founder from Europe uses a verifiable business credential to prove their company’s legal existence when applying for funding in another country.
7. Supply Chain & Logistics
Problem
Supply chain participants must verify credentials, certifications, and compliance documents for goods and services.
Solution with Decentralized Identity
- Suppliers and manufacturers hold verifiable credentials proving product authenticity and regulatory compliance.
- Reduces counterfeiting and improves transparency in global supply chains.
Example
A supplier shares a verifiable certification of product sustainability with a retailer, ensuring compliance with ethical sourcing requirements.
The Role of OnePass Credentials
OnePass Credentials provides the infrastructure for organizations to issue, manage, and verify decentralized identity credentials. By integrating OnePass Credentials, businesses can enhance trust, security, and efficiency across multiple industries.
Conclusion
Decentralized identity is revolutionizing identity verification across various sectors, offering increased security, privacy, and efficiency. Organizations looking to adopt DID can leverage OnePass Credentials to build trusted digital ecosystems that streamline identity management.