Microsoft is developing decentralized digital identities

Posted: 13 February 2018 12:49 pm
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The tech giant insists increasing on-chain transaction capacity generally degrades decentralized networks.

Leading technology company Microsoft has been researching and developing ways to utilize blockchain and other types of distributed ledgers to create innovative and secure decentralized digital identities.

In a recent blog post Microsoft Identity Division director of program management Alex Simons revealed that over the last year the firm has been hatching ideas aimed at enhancing personal privacy, security and control.

Outlining these new concepts, Microsoft Identity Division principal program manager Ankur Patel declared that increasing on-chain transaction capacity (block size increases), such as with Bitcoin Cash, “generally degrades the decentralized state” of the blockchain network, limiting the overall scalability of the system.

In order to overcome these technical barriers, Patel said Microsoft has been collaborating to establish decentralized Layer 2 protocols that “run atop these public blockchains to achieve global scale”.

“To create a robust decentralized identity ecosystem that is accessible to all, it must be built on standard, open source technologies, protocols, and reference implementations,” Patel said.

“After examining decentralized storage systems, consensus protocols, blockchains, and a variety of emerging standards we believe blockchain technology and protocols are well suited for enabling Decentralized IDs.”

Traditional identity systems are often geared toward authentication and access management. A self-owned identity system adds a focus on authenticity and how community can establish trust. In a decentralized system trust is based on attestations: claims that other entities endorse — which helps prove facets of one’s identity.

Networks that act in a similar fashion

One such network that operates in this way is the Lightning Network, which features a scalable peer-to-peer system for making micropayments in digital currencies.

The Lightning Network is a decentralized system which utilizes smart contracts in the blockchain to enable instant payments across a large group. This network is capable of millions to billions of transactions per second. This speed and scalability is possible because the Lightning Network doesn’t create on-blockchain transactions for individual payments. However, the smart contracts can be enforced on-blockchain.

In January, a Reddit user reportedly completed the first ever bitcoin transaction over the Lightning Network. Later that same month, cryptocurrency platform Stellar Lumens released its 2018 Roadmap, revealing plans to incorporate the high-volume micropayments enterprise in order to enhance scalability and improve security.

Microsoft’s next steps

The Microsoft Authenticator app is currently used by millions of people to prove their identity every day.

“We will experiment with decentralized identities by adding support for them into Microsoft Authenticator. With consent, Microsoft Authenticator will be able to act as your user agent to manage identity data and cryptographic keys,” Patel said.

“Once we have added this capability, apps and services will be able to interact with user’s data using a common messaging conduit by requesting granular consent. Initially we will support a select group of Decentralized Identifiers (DID) implementations across blockchains and we will likely add more in the future.”

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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