In today’s rapidly evolving digital landscape, protecting our identities has become an increasingly vital aspect of our online lives. This pressing concern was a central topic at Consensus 2023, where industry experts discussed the latest developments in digital and decentralized identifiers (DIDs) and their role in preserving our online identities.
DIDs have been on the minds of many prominent figures in the tech and cryptocurrency industries, including Ethereum founder Vitalik Buterin and Twitter co-founder Jack Dorsey.
Buterin proposed the concept of soulbound tokens (SBTs). Those are non-transferable NFTs representing an individual’s identity and achievements in the Web3 ecosystem. However, not everyone agrees with this approach.
The Case Against Soulbound Tokens
At Consensus 2023, a panel titled “Not Your Keys, Not Your Identity: How to Protect Our Most Precious Asset” examined the potential of SBTs in protecting digital identities. Daniel Buchner, Head of Decentralized Identity at Block, strongly opposed the idea.
“SBTs are largely a fraudulent meme,” Buchner stated, arguing that decentralized identities do not require a blockchain or a token to use the technology. Evin McMullen, Co-founder and CEO of disco.xyz, supported Buchner’s view, emphasizing the importance of not adopting “consent-free primitives” that could compromise privacy and security.
McMullen proposed an alternative solution: rotating keys behind the scenes of DIDs to prevent the catastrophic loss of an identity profile. In addition, this approach would enable better control over which NFTs are associated with a user’s digital identity.
Industry Experts Advocate for Verifiable Credentials
Tyrone Lobban, Head of Blockchain and Onyx Digital Assets at JPMorgan, agreed with his fellow panelists and encouraged developers to explore and become familiar with verifiable credentials.
This technology allows users to prove their identity, qualifications, or other personal attributes without revealing unnecessary information, enhancing privacy and security.
The consensus among the panelists against SBTs is particularly significant given Buterin’s prominent status within the crypto community. Their collective view highlights the need for ongoing innovation and experimentation in digital identity protection.
Conclusion: Striving for a Secure Digital Future
As our lives become increasingly intertwined with the digital world, safeguarding our online identities is crucial.
While soulbound tokens may not be the ultimate solution for digital identity protection, Consensus 2023 has demonstrated the industry’s commitment to exploring new and innovative methods.
By continuing to develop and refine decentralized identifiers and verifiable credentials, we can work towards a more secure and private digital future.