A decentralized identity can bring the analog world into the digital world

Of course, connected devices need a reliable, distributed ledger and a solution based on technological digital identity. This is a basic requirement for the Internet of Things (IoT). In machine economics, devices must be able to recognize and communicate with each other; Robust identity management solutions are the key to effective data and process security. But what about the many analog “things” all around us? They can certainly also benefit from the advent of digital identity.

Imagine the following: You are just back from a grocery store or taking a walk in the park with your pooch when you suddenly realize that the family heirloom ring that has become a little too loose around your finger is no longer there. You track your steps, search the ground and check the gutters and molehills, but return empty-handed. So many aspects of our daily lives have moved online and valuables such as passwords, PIN codes and login certificates have been securely stored in appropriate security solutions. You can load and manage them centrally at any time. Why can’t you have the same for your family ring or other analog valuables?

Unlike your email password, your ring currently only lives in the analog world. You can mark it with a tracking device that connects to your phone, such as Apple’s AirTag, but this increases privacy and security issues, perhaps much more than they actually address – not to mention the fact that it is a bulky and special piece of jewelry. More importantly, we own a non-trivial number of analog valuables, and slapping trackers for every $ 40 per pop is not practical. It’s time to talk about the digital identity of analog things and finally invite our prized offline assets into our increasingly virtual world.

Related: Data economics is a dystopian nightmare

What is a decentralized digital identity?

Decentralized identity, or DID, refers to the digital identifier of something that exists in the physical world. This digital identifier is located on a fixed distributed ledger and contains a detailed description of attributes, capabilities and ownership. In practice, this means that there is a reliable record that will establish you as the owner of your now lost family ring. It describes the ring in detail and allows its immediate identification. You can use your credentials to prove that you are the owner; just a miniature QR or barcode – or other kind of scannable identifier – attached or lasered to the object. Depending on the item, digital labels with additional functions are another viable option.

Compared to a simple label or other tracking device, digital identity has several other key advantages. It is securely stored thanks to the support of Distributed Ledger (DLT) technology and can establish ownership without leading directly to the owner. If you don’t want to publish your personal information in the general ledger – a sensible decision, you can create your own verified digital identity and assign your analogous things to it. In the example of your lost ring, you have proof that you own the ring, and you can also use pseudonymization, which makes it difficult for unwanted third parties to find your valuables back to you.

Related: No more enforcement and return: Digital ID solves the privacy dilemma

Striking ownership of inconspicuous value

Analog things have different kinds of values ​​- monetary, emotional, practical – and can attract unwanted attitudes and potential theft from bad actors at any time and for any reason. Creating a robust DLT-based digital identity system for valuable physical objects has the additional advantage of discouraging theft, as confirming the origin of a stolen object in the general ledger would automatically disprove its resale.

To further discourage abuse attempts, you can create various verifiable credentials associated with your digital identity. You can also choose who you share this sensitive information with – if anyone. With selective disclosure, you can reliably determine your ownership of analog objects without having to share more information than necessary. For example, a public entry in the general ledger may list you as the owner of a white porcelain vase with blue floral motifs that is 20.5 inches high and weighs 14.8 pounds.

In another verifiable credential, you can specify that the vase is Qianlong – a collector’s item worth millions of dollars. This information may not be public, but you can share it with potential buyers if you choose to split the path with your valuable collectibles. Digital identity using DLT technology gives you complete control over how much information you publish and how you distribute it to suit your individual ownership, identification and security needs.

Related: A decentralized identity is a way to fight data theft and privacy

Identification and authentication on a global scale

Cross-platform communication remains a challenge in the digital sphere, even more so in the analogous case. Verifying the identity and ownership of an item across national borders and language barriers can be a lengthy, slow, and costly process that involves several steps and the services of certified professionals. In the case of particularly valuable objects or real estate, the verification includes notaries, translators, independent evaluators and even consulates and embassies. A unified digital identity system can replace lengthy chains of approval and verification with a simple DLT solution that instantly confirms the ownership and properties of an analog item anywhere in the world.

However, digital identity is not only useful for cross-border transactions. Today’s supply chains are spread around the world, and tracking materials and product components across continents is a challenging task that, despite all odds, remains surprisingly analogous. Shipments are still often tracked manually and on paper. The possibility of human error is high and errors are transmitted and multiplied throughout the life cycle of the consignment. A fixed digital identity can speed up and automate many logistics processes. Special objects that require special handling, such as temperature control or motion stabilization, can be paired with sensors that monitor their transport conditions. Finally, the goods arrive at their destination with an unchangeable record of the quality and safety of transport.

Such solutions are not limited to the logistics industry. The world is on the brink of the post-COVID-19 era and the return to international travel it promises. Many of us will go out into the sky in search of exciting new destinations, but our bags will sometimes not travel with us. According to pre-pandemic statistics, airlines from around the world misplace about 25 million bags a year. Chances are, it happened to you, and you know first-hand what the pain is to track down and recover your lost luggage. Pairing a bag with DID would find it immediately – you no longer have to look for one black suitcase out of thousands. Airlines could also mark your bag with a DLT-enabled sensor at check-in, which would issue an audible or visual warning to baggage handlers if they are about to put their suitcase on the wrong aircraft.

Digital afterlife for analog things

Analog things are lost or lost – it is in their nature. Whether we are talking about manufacturing, logistics or personal matters, such incidents are often costly and worrying. In our increasingly digitized daily life, there is a risk that our analog goods will remain permanently disconnected. Instead of leaving them behind, we can pair them with a digital identity that gives them the electronic afterlife they deserve without compromising their nature.

DID does not require digitization of analog objects and does not need expensive sensors or hi-tech tags to function properly. Instead, it offers an affordable, reliable, and versatile way to remove offline items from a digital blind spot.

The views, ideas and opinions expressed herein are by the author only and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Dominik Schiener is a co-founder of the Iota Foundation, a non-profit foundation based in Berlin. He oversees the partnership and the overall implementation of the project vision. Iota is a distributed general ledger technology for the Internet of Things and is a cryptocurrency. In addition, he won the largest blockchain hackathon in Shanghai. For the past two years, he has focused on enabling machine economics through Iota.

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