Decentralized Identity Verification (DIDV), within the broader crypto technology landscape, represents a paradigm shift from traditional centralized identity systems, granting individuals sovereign control over their digital identity data. It permits verifiable claims about identity attributes without reliance on a single, authoritative third-party issuer or repository, enhancing privacy and security in digital interactions.
Mechanism
DIDV operates using self-sovereign identities (SSIs) anchored to blockchain technology. Users generate unique decentralized identifiers (DIDs) and store verifiable credentials (VCs) issued by trusted parties, such as regulatory bodies or attestors, on a distributed ledger or in a secure personal wallet. When verification is required, the user presents specific VCs, cryptographically proving ownership and validity to a verifier without disclosing unnecessary personal information.
Methodology
The methodology involves cryptographic primitives like zero-knowledge proofs (ZKPs) and digital signatures to ensure authenticity and privacy. Entities wishing to verify identity attributes request specific VCs, and the user, via their wallet, selectively discloses only the necessary proofs. This framework supports compliance requirements in crypto RFQ and institutional trading by enabling granular, verifiable attestations of KYC/AML status or accreditation without exposing sensitive underlying data to every counterparty.
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