A Look At Decentralised Identities: Present & Future

Sunday, June 18, 2023

Sunday, June 18, 2023


This article explains decentralized identities and the philosophy which made Mercle build the evolving identity infrastructure.

Philosophy of Real-World Identities

In the physical realm, identifying characteristics such as physical features or vocal attributes, coupled with official documentation like passports or ID cards, and personal history play crucial roles in defining an individual’s identity.

On the flip side, in the digital ecosystem, an individual’s identity is not static but is constantly being shaped by their activities. An individual’s digital identity is essentially a culmination of their online actions — the steps they take, the digital spaces where these actions are undertaken, and the motives driving them. This can include aspects such as the websites they frequent, their social media posts, their e-commerce activities, and a plethora of other online behaviours.

With the advent of blockchain and NFTs, these digital identities are becoming more significant and intricate. The vastness of the digital sphere coupled with diverse behaviours across different platforms can result in users having unique identities for each platform. Moreover, they might even hold multiple identities on a single platform. These identities can be represented and verified through NFTs, adding another layer of complexity and utility to digital identities in the modern world.

The Power and Potential of Decentralized Identities

As we have seen, digital identities are incredibly versatile and dynamic, capable of evolving quickly and mirroring the multifaceted nature of our real-world selves. However, one critical aspect we must address is the control and ownership of these identities. In the current paradigm, digital identities are largely controlled by centralized entities — the social media platforms, email providers, and other online services we use.

These centralized entities have enormous power over our digital identities. They can censor information, limit or block access, and even exploit personal data for their benefit. Moreover, the prevalence of data breaches in these centralized systems has repeatedly exposed the vulnerability of user data, leading to a loss of privacy and financial damage.

Key Characteristics of Decentralized Identities

Self-Sovereign and Interoperable: A decentralized identity is self-sovereign, meaning that the individual user has complete control over their identity, including the management of their data, how it’s shared, and with whom. Furthermore, these identities are designed to be interoperable across different platforms, services, and applications. This allows users to carry their identities with them across the digital landscape, eliminating the need to create and manage multiple identities.

Persistent and Secure: Decentralized identities are persistent and secure. They exist indefinitely, are not reliant on any central authority, and cannot be deleted by anyone other than the owner. Furthermore, they are secured by cryptographic mechanisms, making them resistant to fraud and identity theft.

Private and Portable: Decentralized identities enable privacy-preserving identity verification. Users can choose to disclose only the necessary information for a specific transaction or interaction, rather than sharing their entire identity record. Additionally, these identities are portable. They can be used anywhere in the digital world, irrespective of geographical boundaries, and are not tied to any specific platform or service.

The Intersection of Utility and Rewards in Identity Creation

A significant factor in identity creation is the utility or reward that a platform provides. Think about the various online platforms where you’ve created an identity. Each of these platforms provides a unique value proposition, a specific utility that has encouraged you to engage and share your data.

For instance, Instagram offers the utility of enhancing our photographs and sharing them with the world. Twitter enables us to share our thoughts and ideas in real-time, while LinkedIn provides a platform to connect with professionals and enhance our career opportunities. Each of these platforms provides a unique set of utilities that incentivizes us to create identities and share our data. This dynamic illustrates how integral utility and reward are to the process of digital identity creation and management.

How Mercle Is Rethinking Decentralised Identities

Mercle is building a new and novel way to encapsulate membership and reputation for online-first communities, with a core emphasis on ‘proof of work’. We understand that each community member contributes uniquely and significantly to the ecosystem. Therefore, our implementation ensures these distinct contributions are converted into measurable value, allowing members to carve out their reputations based on the work they do. This approach fosters a model where one’s digital identity is constructed and strengthened through active participation within the ecosystem.

In Mercle, evolving NFTs play a pivotal role in our identity framework. These NFTs serve as visual markers for one’s reputation within a community, much like a passport does for nationality. The flexibility and uniqueness of NFTs enhance our approach, allowing for a vivid, blockchain-backed representation of each individual’s contributions. This unique model enables each person’s involvement to be acknowledged and reinforced, leading to the formation of a solid and dynamic digital persona.

Unlocking Utility and Fostering Community Engagement

When it comes to fostering participation in online communities, gamification and the association of rewards play a crucial role. By turning interactions and contributions into a game-like experience, members feel more motivated to engage and participate. The promise of earning rewards creates a sense of excitement and anticipation. Each action taken doesn’t just have an impact on the community but also brings personal benefits. Be it gaining points, unlocking a new level, or earning a unique badge, these rewards hold significant value. They become tangible evidence of one’s efforts and achievements within the community.

Moreover, when these achievements are recognized and celebrated publicly, it adds an extra layer of motivation. This recognition fuels the desire to contribute more, creating a positive cycle of engagement. The feeling of accomplishment coupled with the recognition of efforts keeps community members active, invested, and excited about contributing more.

By intertwining gamification with reward systems, communities can build a more engaging and dynamic ecosystem, stimulating participation and strengthening member loyalty.