LTO Network ("LTO") - Introduction to Decentralised Identifiers (DIDs)

LTO Network ("LTO") - Introduction to Decentralised Identifiers (DIDs)

By Orageux101 | Ad-hoc posts | 21 Apr 2021


What are Decentralised Identifiers (DIDs)?

Decentralised Identifiers have been described as the linchpin of self-sovereign identity. They are a new type of globally unique identifier that does not require a centralised registration authority because control of the identifier can be proved using cryptography. In the digital era, this will be equivalent to the widespread adoption of centralised Digital IDs used by nations.

There are a number of blockchain platforms in the DIDs field including Ontology and Civic. This will soon include LTO Network who appear to integrate DIDs in their existing solutions in a manner not yet seen in the cryptocurrency space. As with all transitions from centralised architecture to a decentralised blockchain – the benefits of blockchain technology includes immutability, removal of single points of failure and faster settlements.

How do countries use Digital IDs?

The most notable use of Digital IDs in society today is Estonia’s state issued digital identity provided to every Estonian regardless of their location. 98% of Estonians have a Digital ID and since its inception, there are more than 900m digital signatures which shows the success and widespread adoption of the technology. Digital IDs in Estonia are used for various activities including:

  • Travel ID for journeys within the EU;
  • National health insurance;
  • Public voting;
  • Submit tax claims; and
  • Customer loyalty card (removing the need for a loyalty card per business).

Estonia has further built on this creating Mobile-IDs which utilises a special mobile SIM card to make it even simpler for individuals to use services.

Estonia’s digital society is dependent on X-Road, a centrally managed distributed Data Exchange Layer (DXL) between information systems. It is based on an interoperable ecosystem and utilises blockchain technology.

Officials report that Estonia saves over 1,400 years of working time and 2% of annual GDP through its digitised public services (which are enabled by Digital IDs).

There are a number of states that have utilised Digital IDs including India, Belgium, Italy, Japan and the Netherlands. In India, 1.24bn Digital IDs have been issued to residents of India since 2010. There are also a number of countries including the UK and Canada who are researching effective means of Digital ID implementation.

What does LTO Network plans to utilise DIDs for?

Blockchains benefit from the transparency of enabling anyone to audit every transaction and address. However, it also has great privacy benefits as unless explicitly permissioned, blockchains require no KYC and users can participate pseudo-anonymously. As opposed to state regulated Digital IDs, DIDs have been designed to be independent of centralised registries and identity providers. They allow the controller of a DID to prove control over it without requiring permission from any other party.

LTO Network looks to go one step further than traditional Digital IDs which are only used to validate a person. They look to utilise DIDs as a new type of globally unique identifier that is assignable to any subject, which can be a person or an object, such as a car or a house.

There are multiple potential uses for DIDs including:

  • DeFi Lending will be supported by proof of collateral and potential credit score incorporation;
  • Can be used to verify products, documents as legitimate copies (i.e. university diplomas);
  • Ability to prove residence (without showing residence to third parties) to obtain services;
  • Provide customers with fast access to encrypted data regarding their lifetime purchases; and
  • Linking DIDs to bank accounts could make transfer of accounts significantly easier which would simplify processes for executors of wills.

These are on top of the uses of Digital IDs that were mentioned above (utilised by states).

LTO Network approach uses Chainlink oracles to implement cross-chain operability and Sphereon for wallet integration.

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