In today’s digital world, documents, photos, and videos can be easily doctored using deep fake technology or Photoshop. While this can be innocent when used purely for entertainment purposes, the reality is that bad actors and criminals can get their hands on this technology just like the rest of us, making it easier for them to defraud unwitting victims.
As a result, it’s becoming increasingly difficult to trust that people are who they claim to be, including the specific credentials they boast about having. Even a decade ago, researchers for the state of California found that more than half of people claiming to have a PhD had fake degrees. As technology has advanced in recent years, it’s no surprise that this problem hasn’t simply gone away.
Despite these challenges, credentials such as driver’s licenses, passports, college degrees, and professional licenses play important roles in modern society. They inform us of individuals’ capabilities and privileges, such as the ability to drive a car, purchase alcohol, or enter a foreign country. Luckily, advanced security capabilities, like verifiable credentials, enable the accurate, fraud-proof verification of identities in a digital format.
What are Verifiable Credentials?
Verifiable credentials (VCs) are a W3C specification that allows users to present machine-verifiable, cryptographically secure credentials online.
Verifying organizations often find it easier to assess the validity of a person’s credentials when presented in person. However, there is often less surety that a person’s credentials are valid when verification is completed online.
The standard W3C specifications for verifiable credentials aim to overcome this roadblock.
You can think of verifiable credentials as a digital counterpart to physical credentials like a passport, driver’s license, or birth certificate, but kept in a secure digital format that have been verified by a third party. Verifiable credentials can be stored on a person’s device, making it easy for them to present as needed.
Notably, verifiable credentials contain additional features, like digital signatures, that make them even more secure and tamper-proof than the physical versions.
How are Verifiable Credentials Issued and Used?
When using verifiable credentials, there are three distinct parties involved:
- The issuer
- The holder
- The verifier
In this case, the holder is the person who claims to possess a specific credential, including students, employees, and citizens. The issuer is the entity that has provided the credential to the holder, like the government or an educational institution. Finally, the verifier is the entity that requests or requires the credential, such as an employer, border patrol, or merchant.
This entire process is dependent on a verifiable data registry, which is a trusted system that creates and verifies these credentials, like a government database.
In practice, the issuer designates specific credentials to the holder after successfully verifying them. The holder can then store these credentials digitally. When needed, the holder can generate a verifiable presentation of the credentials, which they can offer to the verifier. The verifier will cross-check the VCs against the data registry to complete the process.
Let’s say you are traveling to a foreign country, and you’re using a digital passport as a VC. The issuer would be the government, as this is the entity that has verified your identity upon issuing you the credential. At the airport, you (the holder) can present the digital passport to border control, who is the verifier in this scenario. Using cryptography, the border agent confirms your passport’s authenticity without requiring you to share the physical document.
What are the Benefits of Verifiable Credentials?
In the digital age, VCs offer a number of benefits for all involved parties, as we will discuss in further detail below:
1. Fraud Prevention
One of the most significant benefits of VCs is that they strengthen the security and authenticity of digital credentials, reducing the risk of fraud. This means there’s a lesser chance that someone will claim to have a degree they haven’t actually earned or be older than they actually are. Plus, since these credentials are stored securely, there is a lower risk of being compromised or exposed to bad actors.
2. Greater Data Privacy
Holders will like that VCs give them full control over how and when their credentials are shared. VCs allow holders to share only the information that’s relevant to verifiers in the current scenario, protecting their data privacy.
For example, if you’re applying for a loan, and the lender only needs to ensure your credit score meets the requirements, you can share just this piece of information with them. This way, the lender doesn’t need to conduct a search on their own, getting access to your entire financial history.
3. Organizational Efficiency
VCs also provide enhanced efficiency for verifiers. They help streamline the verification process, automating the validation of credentials instantly. This saves verifiers the time and effort to complete the process manually. Plus, given the enhanced security of VCs, verifiers can have the peace of mind that they’re not receiving fraudulent credentials.
4. Holder Convenience
Holders can enjoy greater convenience with VCs, as it gives them a trusted, digital version of important credentials like their ID, academic achievements, passports, insurance cards, and more. This way, they don’t have to carry around physical copies of these credentials everywhere they go. Instead, they always have quick access to VCs from anywhere.
Use Cases of Verifiable Credentials
Verifiable credentials are becoming increasingly valuable in a world where it’s challenging to ensure the legitimacy of the credentials someone presents online. We are still in the early adoption stage of verifiable credentials, though here are some of the potential use cases for this technology:
- Financial services: Customers can present VCs when securing banking and lending services, enabling a faster onboarding process as institutions complete customer due diligence and know your customer (KYC) checks. Holders can share pertinent financial details without exposing unnecessary information.
- Healthcare: Patients can quickly and securely share medical records relevant to their care, such as vaccination records, surgery history, and more, with providers.
- Education: Students and alumna can conveniently store academic information like their degrees and certifications, which can easily be accessed and shared with employers or professional organizations.
- Travel: Travelers can enjoy quicker border control checks with the use of digital passports and visas.