I think Decentralized Identity is a space that has multiple solutions, with various tradeoffs, and can provide different needs.
It is really hard to broadly talk about this topic, since the conversation can travel in many directions, but here are some of the high level thoughts I have:
There are two classes of blockchain based identity solutions that I am interested in.
First are identity solutions which could be useful for blockchains, specifically to solve the de-sybiling problem. These should generally be decentralized, open, and permissionless solutions, to maintain the properties of the blockchains they are built on. Two technologies which I think fit that are:
- Proof of Personhood
- On-Chain Reputation / Networks of Trust
Second are a set of blockchain based identity solutions to replace / improve existing centralized systems.
- Self-Sovereign Identity
Someone who is better versed in this space can probably list other solutions and problem spaces better than I. The key thing about these second class of problems / solutions is that they ultimately rely on oracles and centralized actors to bring “non-native blockchian data” to the network.
But this is just a fact of life, and I think it would be naive to think that “Web3 Identities” would have no government bodies, driver’s license institutions, international passports, etc… Blockchains simply cannot natively understand “people”, and thus require intermediaries to help bridge that.
What does this mean for the future?
Well, I think that Polkadot is well suited to be the hub of development of fully permissionless blockchain based identity solutions. My hypothesis is that these kinds of Web3 applications do not exist today because platforms like Ethereum failed to scale fast enough for the demand; and that, combined with a fee based transaction system, suppressed any non-defi application. Who would or could pay $100+ to update their identification? Polkadot is designed to have many unique and clever mechanisms for allocating block space, for example governance allocated slots, which would keep the costs of running these systems extremely low and predictable.
However these kinds of systems are extremely complex, and not obvious what the right solution is, or how that solution may need to evolve. In this case, I think winners will be found from many many competing solutions.
As for centralized identity solutions, I think that this depends way less on the technology and development, and much more on politics and adoption. We see some countries in the world are already being early adopters to a digital identity system, but many are far behind. I think that “legitimacy” or “quality” of these central identity solutions will be much less dependent on the underlying blockchain platform used, and more about how the central players act on those systems.
That being said, for the same reasons that Polkadot should be a competitive home for any Web3 application (scalability, security, interoperability), I think it would make for an attractive home for any government or identification system.
Finally just to link to some names in the space, check out: https://substrate.io/ecosystem/projects/?category=identity