Microsoft To Embrace Decentralized Identity Systems Built On Bitcoin And Other Blockchain

blockchain
identity
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microsoft

#1


via Forbes

In a new post today, Microsoft announced their embrace of public blockchains, such as Bitcoin and Ethereum, for use in decentralized identity systems. Initially, the longtime tech giant will support blockchain-based decentralized IDs (DIDs) through the Microsoft Authenticator app.

Unlike the forms of identification used in the world today, a decentralized identity system is not controlled by any single, centralized institution such as a government or large tech company. The idea is that a decentralized identity system removes the possibility of censorship and gives an individual full control over their identity and reputation.

After looking at various types decentralized identity systems, Microsoft turned to public blockchains due to their ability to enable privacy, self-ownership, and permissionless access.

“After examining decentralized storage systems, consensus protocols, blockchains, and a variety of emerging standards we believe blockchain technology and protocols are well suited for enabling Decentralized IDs,” today’s announcement post from Microsoft says.

Identity is one of the long-touted use cases of blockchain technology that does not have anything to do with payments or currency. In today’s post, Microsoft points to Bitcoin, Ethereum, and Litecoin as three specific platforms that are suitable foundations for DIDs.

Dozens of blockchain projects related to identity have popped up over the years, with Blockstack ID and uPort being two of the most well-known examples.

Microsoft plans to work with DID method implementations, which follow a specific standard outlined by a W3C working group. However, the tech giant has not disclosed specific DID method integrations at this time.

So why is a public blockchain a good fit for the root of a decentralized identity system? Much like Bitcoin itself, it comes down to removing trust in counterparties. No government or other centralized entity has control over or can censor identities that are rooted in a public blockchain.

While it may be possible to use a federated model where a number of specific parties are trusted rather than a centralized institution, a public blockchain ensures that the base layer of these identity protocols is sufficiently decentralized and incorruptible.

In the past, critics have argued that identity systems built on public blockchains will be too expensive and difficult to scale, but today’s post from Microsoft points out that layer-two systems can be used to reduce the necessary number of costly on-chain interactions. This is somewhat similar to how the Lightning Network can be used to better scale Bitcoin’s payments use case.

The post from Microsoft dismisses simple block size increases as an insufficient scaling approach to address the volume demands of such a system. Although not called out by name, Bitcoin Cash is the clearest example of such a move.

“While some blockchain communities have increased on-chain transaction capacity (e.g. blocksize increases), this approach generally degrades the decentralized state of the network and cannot reach the millions of transactions per second the system would generate at world-scale. To overcome these technical barriers, we are collaborating on decentralized Layer 2 protocols that run atop these public blockchains to achieve global scale, while preserving the attributes of a world class DID system,” says the post from Microsoft.

At this point, it’s unclear what exactly Microsoft gains from supporting the concept of decentralized IDs. However, some inferences can be made from the current state of the Internet.

The most obvious use case for DIDs within Microsoft products would be LinkedIn, which could be viewed as a sort of a reputation system for an individual’s past education and work experience.

Longer term, this may be a play from Microsoft in the decentralized Internet space where they’re offering themselves as a company that will not build their financial future around spying on their userbase, which is effectively what is seen from the likes of Google and Facebook.


#2

I love the little stab at Bcash
"While some blockchain communities have increased on-chain transaction capacity (e.g. blocksize increases), this approach generally degrades the decentralized state of the network and cannot reach the millions of transactions per second the system would generate at world-scale."

Whats even better

“To overcome these technical barriers, we are collaborating on decentralized Layer 2 protocols that run atop these public blockchains to achieve global scale, while preserving the attributes of a world class DID system.”

Lastly

"The blockchain ecosystem today is still mostly early adopters who are willing to spend time, effort, and energy managing keys and securing devices. This is not something we can expect mainstream people to deal with. We need to make key management challenges, such as recovery, rotation, and secure access, intuitive and fool-proof. "

Microsoft to invent a brain dead simple trezor type/key management device/identity system? This is exactly what needs to happen to make it go mainstream anyway so grandma can use it


#3

GOODBYE BITCOIN CASH? MICROSOFT: ON-CHAIN SCALING ‘DEGRADES DECENTRALIZATION’

Microsoft has concluded that so-called ‘layer 2’ solutions are necessary for Bitcoin to scale and is “collaborating” on the technology.

MICROSOFT: ON-CHAIN FAILS TO MEET CAPACITY NEEDS
In a blog post on Monday, Director of Program Management at Microsoft’s Identity Division Alex Simons said that layer 2 scaling solutions, which principally involve the Lightning Network, are superior to on-chain scaling.

Simons writes:

  • While some blockchain communities have increased on-chain transaction capacity (e.g. blocksize increases), this approach generally degrades the decentralized state of the network and cannot reach the millions of transactions per second the system would generate at world-scale.

He later continues:

  • To overcome these technical barriers, we are collaborating on decentralized Layer 2 protocols that run atop these public blockchains to achieve global scale, while preserving the attributes of a world class DID (decentralized identity) system.

The post marks what is likely Microsoft’s most direct pledge yet on the future of public blockchains, including Bitcoin.

The computer giant’s description of on-chain scaling options as “degrading decentralization” in particular places it in opposition to Bitcoin hard forks offering bigger block sizes, specifically Bitcoin Cash.

The fork has long attracted criticism from some of Bitcoin’s earliest proponents, with computer scientist Nick Szabo calling the network “centralized sock puppetry” last year.

The resources it will now employ to further development of layer 2 remains unknown.


Lightning Network Passes Bitcoin Cash Node Count

LIGHTNING NETWORK PASSES BITCOIN CASH NODE COUNT
“We are humbled and excited to take on such a massive challenge, but also know it can’t be accomplished alone,” Simons continues.

“We are counting on the support and input of our alliance partners, members of the Decentralized Identity Foundation, and the diverse Microsoft ecosystem of designers, policy makers, business partners, hardware and software builders.”

The Lightning Network had already made considerable advances this year, debuting its first mainnet release and growing rapidly to incorporate almost 2000 nodes as of February 13 – more than the Bitcoin Cash network.

The highly-anticipated layer 2 technology would serve to make Bitcoin transactions cost fractions of a US dollar cent and complete almost instantaneously.


#4

Not surprised at all. Very recently Microsoft announced about accepting bitcoin payments and Bill Gates was among those few ‘celebrities’ that praised bitcoin in a video interview (that has been circulating actively YouTube).


#5


Google knows