Watch/Listen To This Episode:
In this episode of Bitcoin Spaces Live, hosts Christian Keroles (@ck_snarks) and P (@phjlljp) are joined by Daniel B (@csuwildcat), Shinobi (@brian_trollz), and Level39 (@level39) to discuss the future of decentralized identity. They explore the different decentralized identity projects happening at Microsoft and Square, ION (a layer 2 built on top of Bitcoin), why decentralized identity is just as important as decentralized money, the future of lightning and DID, and much more.
Read The Full Transcript Below:
[00:00:08] CK: Daniel, you have been a huge advocate for decentralized identity, especially using Bitcoin. You have pushed this idea forward in the public, as well as at different organizations. Most recently, Microsoft. Obviously, there’s some changes there. The mission continues. You had some big news earlier this week that you’re realigning with Square, which is obviously a Bitcoin-forward company. I guess, let’s just jump into decentralized identity, your role within decentralized identity and maybe talking about what’s happening with decentralized identity at Square and what is going to happen with decentralized identity at Microsoft?
[00:00:51] DB: Yeah, sure. I got into decentralized identity a while back, first that Mozilla, around 2012, just the concepts around decentralized apps. I don’t mean decentralized apps in the way that the strange blockchain type things. It means actual decentralized applications that don’t have an application server in the middle of them. In that process, found out, identity is pretty critical, right? If your account IDs are some companies that’s running the app and your data is stored with the company servers, you can’t really have a centralized app to see if – figure that out.
[00:01:20] P: I’m sorry. Can you define what decentralized identity is, versus a centralized identity?
[00:01:27] DB: Yeah. Identity is all-encompassing concept. There’s a few things within it. Your identity, I define it anyway, as everything that defines you. It’s all your communications, your thoughts, your beliefs, things you write down, data you put into apps any. Anything that’s really tied to you, your fingerprint on the digital world, if we’re talking about digital identity is your identity.
Within your identity, you have a single identity that encompasses everything. You might have many personas, ways you want to reflect that identity out to people. You might have a very public one, like your Twitter profile would be a very good example of a public reflection of a large portion of your public identity. Then you may have very private ones that you keep with groups of friends, or certain counterparties that you don’t let as much of that data that defines your identity. That’s the definitive definition.
[00:02:13] P: Got it. You’re saying, the identity is the representation of truly who the individual is, or the entity. Then there are these personas, which are basically thin slices of that, that one might present to different audiences.
[00:02:28] DB: Yeah, absolutely. Yeah. The goal there is obviously, to make sure that the people aren’t disclosing any more than they want to. I mean, now you get in context and that thing. Where decentralizing comes in. The difference between centralized and decentralized identity is in centralized identity, what we currently have today, your identifiers, which are the ways you reflect out personas typically, right? You give someone an identifier that could be your Twitter handles, and a very public identifier. Those are typically owned by companies. That has its consequences. Obviously, we see that today in the public sphere, when you’re an identifier, which is the way that everyone recognizes you, that’s what really identifiers are. The way people recognize you in the world.
If you didn’t have at least a pseudo-anonymous identifiers, no one would be able to know a provenance of you at the time. If I just tweeted from a random identifier every single time, the tweets might be great. Maybe they’re banging, but people are like, “Oh, I didn’t even know this. It’s just tweets coming out of nowhere. I guess, I’ll just read and consume this amorphously.” It doesn’t accrue to any identity. That’s why people use things like, Twitter profiles. The issue is your data is stored with a single company and your identifiers can be cut off, whether it’s Facebook, or others.
I mean, that’s an issue, right? Because you don’t really own that big chunk of your life, which is maybe your public identity. It’s very hard to even own, private or semi-private IDs as well. That’s an issue. Decentralized entity sets up to solve those things with a couple of key standards; ones that DID spec the decentralized and FR spec that’s going through WTC right now, facing some opposition from some entities, obviously large silo entities that have best interest in not having the cops. The other is this personal data store aspect.
Tying it into the journey, the personal data store aspect is like what I was most interested in 2012, which was how do we decentralize apps? Back in Mozilla days, it was Firefox handshake was the going term that we were using internally. That didn’t get funded, but I ended up leaving Mozilla to go to Microsoft, because they were after talking them into it, they’re willing to pursue decentralized identity. Strange bedfellows, you might think.
Yeah, it’s weird in the sense that Microsoft, people like to be down on them. I get it. I’m not a 100% aligned, obviously, anywhere close with some of the things they do. In the identity sphere, they’re not what you would think. Because they don’t make their money in the same ways that the make the Googles and the Facebooks of the world do. They make most of their money from providing what some of us might think of as a little bit enterprisey tools and services to companies.
[00:04:57] P: I just want to jump back for one second and re-articulate what you just said, because I think for a lot of people in the audience, or for a number of them, anyway, the idea of decentralized identity is not something that they may be thinking about. Tell me if you agree with this, that basically, where – just as we think of Bitcoin as being something that is so important, because it decentralizes and add censorship resistance to money and sound money, having a decentralized identity, that is to say, a decentralized system, by which you can uniquely identify yourself to other people is critically important.
If you understand Bitcoin and the reason for decentralization sound money, one can just shift that over to decentralization of identity and being able to uniquely say that you are you, via a variety of specific factors.
[00:05:42] DB: Yeah. It’s incredibly important. A lot of people have this misconception like, “Oh, identity is bad.” Identity is bad, and it totally depends on how you use it. You want identity. People want to know their counterparties and they want to know, hey. Even in Bitcoin, you have identity. You the pseudo anonymous addresses. If someone says, “Oh, pay me $5 in Bitcoin.” You don’t say, “Oh, let me just send Bitcoin to any old address. I don’t need to know your identity.” Because remember, addresses are pseudo-anonymous identifiers.
We like identity. Identity helps reputation. If I can refer to someone by an identifier and say, “Hey, do you trust this person, Bob? I’m trying to do some business with this person. Do you trust them?” You want an anchor of identity. The negative uses of identity are really the ones that get people up, their hackles up. Don’t throw the baby out with the bath water. Identity is important. If us owning our Twitter accounts and our other social accounts is really important, and you’ve seen this.
Luke Dashjr just came back. He got out of Twitter jail. It’s cool. Maybe he should have never been in Twitter jail, because maybe there shouldn’t be a jail for people’s digital identity. I don’t know. It’s just my own personal view. I don’t think companies should be able to snap you out of existence. That’s what DIDs prevent. If we had a system of decentralized identity, and let’s just say, you were using it in this particular instance for public identifier, like you would a Twitter handle, you would publish tweets from your personal data store, or something of that nature. People would come to your identifier and then they would find your personal data store, which the data exists with you and you control it, and they would pull.
In that way, it doesn’t really matter what client someone’s using. There’s no person in the sky to hit a button to say your ID doesn’t exist, or your tweets don’t exist, or your content doesn’t exist. Now, I understand the position Twitter’s in, now that I happen to work for one of these two companies, obviously. It’s just, I want to be a little sensitive here. They have regulations and they’ve got norms and social stuff that goes on, and they have their own policies. That’s okay. What decentralized identity is makes that even better in the sense that every business can say, “I do or do not want to do business with these IDs.”
What it removes from their hands, which they should have never had, but it’s not their fault, because we never had any other way to do it, is the intertwining of the actual identity with their particular service. That’s a separation of church and state that we need to have. We just don’t today.
[00:07:58] S: Yeah. That is so important in an age where the town square is digital. Everybody isn’t just meeting up in the middle of town, where they all know each other and they can all talk. It’s all happening online. When you remove that identity from somebody, you literally exclude them from that town square, for the equivalent of it these days.
[00:08:21] DB: Yeah, it’s exactly right. I don’t think that this is about getting down on any one company, and they all…