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20 Use Cases for Decentralized Identity

Marc Lewis
Managing Editor
February 24, 2023
Since this post was written, Hyperledger FireFly has reached 1.0. Learn more here!

Decentralized identity offers several benefits compared to traditional, centralized identity management systems. With decentralized identity, users have complete control over their personal data and how it is shared. A person has identifiers, data, credentials—and they keep those in a digital wallet to share at will. This puts people in charge of their identity and helps protect their privacy. It can also enhance security by reducing the risk of data breaches and hacks. Since personal data is not stored in a central database, there is no single point of failure that can be exploited by hackers.

We're still a few technological advances away from an end-goal where everyone owns their digital likeness. We need systems that can communicate with each other on a common set of standards, easy-to-use digital identity systems, and ways to include populations that have been excluded from traditional digital markets. But setting aside those challenges for a moment, it can be fun to think about potential use cases in a world where blockchain-backed identity solutions are universal.

Below is a list of ways decentralized systems can empower people, organizations, and communities to own, move, and protect their identities in the future to change the way we live, work, and play.

Decentralized Identity Examples & Use Cases

All these examples are written to illustrate what’s possible, assuming we build systems to communicate with one another, support access for diverse populations, and make tools that are simple for people, businesses, and governments to use.

Self-sovereign identity (SSI) for individuals

We can empower people to control their personal data and identity, and share it with others securely and selectively.

Decentralized finance (DeFi)

We can build ways for people to access new and emerging financial services and products without relying on traditional banks or intermediaries. For financial institutions, we can make AML & KYC instant and automated.

Identity verification for digital onboarding

Register a product, rent a car, renew car tags—we can make it easy for institutions and companies to verify the identity of their users remotely and securely.

Healthcare identity management

We can create an environment where patients control their health data and share it with healthcare providers as needed, automatically, which will greatly reduce administrative costs.

Supply chain management

DID can enable end-to-end tracking and verification of products and goods across the supply chain, while letting us automate customs, monitoring, and regulatory compliance.

Voting and elections

We can eliminate election drama by enabling secure and transparent voting processes that are free from fraud and manipulation.

An illustration of Polygon ID
Polygon ID is a blockchain-backed identity solution that uses zero knowledge proofs. Image via Polygon

Access control and authentication

Decentralized identity will give companies the ability to instantly grant secure access to physical and digital spaces and resources.

Digital notarization

Blockchain-baked identity will make it easy to complete the verification and authentication of digital documents and transactions.

Personal data privacy and protection

No more surrendering your digital profile to advertising companies, as blockchain-backed identity helps users control the use and sharing of their personal data, browning history, and preferences.

Decentralized social networks

We can build new ways for users to communicate and share content without relying on centralized platforms that collect and control user data.

Digital identity for refugees and stateless persons

Decentralized ID makes it easier for displaced persons to access services and prove their identity without relying on a centralized authority, which can lighten the burden on state security services as well.

Digital identity for developing countries

From financial inclusion to data literacy, self-sovereign ID can empower people to access services and opportunities that were previously unavailable to them.

Identity-based payments and micropayments

Currently people might connect to a variety of payment applications or ecosystems, where self-sovereign identity can empower a single, frictionless, and secure payment without intermediaries.

Identity-based loyalty programs

Decentralized ID will make it easy for companies to reward their customers based on their identity and behavior.

Digital identity for the Internet of Things (IoT)

Decentralized ID will enable secure and private communication between devices and their owners, opening new constructs for securely identifying things and organizations.

Personalized advertising and marketing

Soon you will only see the ads that matter to you as companies deliver targeted and relevant ads and promotions based on your identity and preferences.

Cross-border identity verification

Safe and secure migration, customs, and travel, as companies, financial institutions, and governments verify identity in different countries and regions more easily.

Humanitarian aid and disaster relief

Decentralized ID will allow aid organizations to deliver aid and support to people in need without relying on centralized authorities.

Identity-based insurance

Decentralized ID will allow insurance companies to offer personalized and fair insurance products based on the user's identity and behavior.

Digital identity for education and e-learning

Students will prove their identity and credentials and access online courses and educational resources, and carry those credentials with them.

An illustration of a student credential identity use case
This image from Frontiers illustrates an SSI use case where proof of credentials are needed.

Final Thoughts

Any new technology that has the potential to change the way we live and work comes with risks. For example, how do we ensure that blockchain identity tech isn’t used in the wrong way? What if a government, company, or individual wants to permanently attach something to our identity that we don’t accept? If our device is lost or stolen, how do we get our identity back? There are plenty of issues to sort out as we define the ways identity will work in web3.

But what’s clear is that the market is demanding ways for people to own their identity, control use of their data, and take control of their online presence. These are a few examples of the use cases for decentralized identity. As the technology evolves, more industries will adopt decentralized identity to enable secure, trusted, and user-centric data exchange—and we’ll update this page to reflect those developments.

Build with Polygon ID

Speak to one of our experts about how to use decentralized ID in your app.

Contact Us

Build with Polygon ID

Speak to one of our experts about how to use decentralized ID in your app.

Contact Us
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Interested in Blockchain?

Start learning blockchain and creating enterprise solutions today with a free Kaleido account!

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Build with Polygon ID

Speak to one of our experts about how to use decentralized ID in your app.

Contact Us

Build with Polygon ID

Speak to one of our experts about how to use decentralized ID in your app.

Contact Us

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