2 Feb 2023

Since the launch of the Web2.0 concept in 2003, the traditional Internet has formed a relatively mature system. With the advancement of Internet applications, these applications covering various fields have become indispensable tools in our lives. Whether it is internet applications in the fields of social networking, shopping, finance, etc., users must have to register and log in to ensure access to the application's further services. However, most Internet applications requests users to verify their identity under legal requirements.

This information such as Internet traces and other data will be stored in the centralized server behind these applications. Internet companies, as the developers, actual operators and controllers of these applications, certainly have the right to control these user information. According to statistics, in the first half of 2018, more than 4.5 billion sensitive data records were exposed due to data theft. It is estimated that by 2022, the global annual loss caused by data breaches will exceed US$2.1 trillion.

The centralized ideology built by the traditional Internet is destined to form a large and small semi closed ecology with commerce as the core, and each application is almost an island of information. Obviously, every user who wants to live a normal life must be connected to the Internet ecology. We still need to face different Internet applications and financial applications every day, and we constantly register and log in many accounts, and constantly Complete KYC.

According to statistics, every Internet user have created 130 to 200 different accounts associated with the same email address and mobile phone number. At the same time, creating many accounts further increases the dangers of user information leakage and asset security.

Autonomous SSI

SSI itself is based on blockchain technology to register an autonomous identity attribute and permanently register it on the block.The blockchain technology has the characteristics of peer-to-peer, irreversible and non-tamperable, and authorization to access external resources is required. The SSI autonomous identity system built on the blockchain itself is not controlled by any centralized power such as a group or individual. SSI itself is verifiable and credible, and the blockchain network itself has economic penalties for many dishonest acts.

The advantage of SSI's autonomous identity is that business entities recognized by this identity system will be able to log in and authorize through the system, and the SSI wallet can be used to prove a person qualifications and identity. Therefore, the user does not need to register a new account, and can interact with the application only through authorization.

For many Internet companies, this technology will also further reduce the pressure to protect users' personal information, reduce management burdens and improve customer experience. Financial institutions will also not need to conduct costly KYC, directly verify mortgage data and sources to optimize the mortgage loan process, or even some back-adjustments of onboarding. Blockchain-based SSI is expected to further improve the efficiency and trust of the Internet and further build a complete decentralized data identity system.

Although SSI seems to have considerable potential, SSI itself has certain problems. The start of the infrastructure of the SSI model requires a large number of business entities to collaborate together, and it is difficult to build a governance and collaboration model, which is not a technical problem in itself. The implementation of SSI means the sharing of data. Obviously, many traditional Internet business entities believe that user information is profitable, and they are unwilling to share this data with competitors. However, many companies have no incentive to promote SSI if they are used to traditional data models, so SSI is still in an early stage.

Cheqd blockchain infrastructure

As we have seen, the world is based on business, which also makes business groups and individuals focus on interests. As a distributed network, the blockchain itself is a decentralized ecology in which all users participate in collaboration, and the factor that promotes normal operation is incentives. For example, nodes obtain rewards by helping the blockchain to package and produce blocks on the chain to record, which in turn allows many people to spontaneously participate in it, and many people take this as a career.

In the SSI sector, cheqd has built an incentive role. The cheqd network is not an independent chain and it is built on Cosmos. Cheqd itself builds a credible and true data economy, and builds a new type of decentralized data-based business model.

Cheqd is a web 3.0, which allows any company or individual to publish and read self sovereign identity (SSI) certificates. At the same time, various roles in the ecosystem, such as issuers, receiver, holder, node operator, etc., are allowed to pay digital certificates to each other without compromising user privacy and security. Of course, every role in cheqd network gets rewards after it contributes to the cheqd network.

Through the cheqd network, the issuer of any data information will obtain a digital identity, and the identity will be tokenized (NFT), and individuals and organizations will fully grasp and control their own data through absolute ownership of these assets. In cheqd, the use of any information requires the consent of the holder and payment of corresponding fees (in the form of tokens). Of course, this method is quite cheap compared to the services of KYC providers in the traditional Internet. In the network constructed by cheqd, a payment system based on cryptocurrency is built.

In the future, after building a sovereign identity through cheqd, users will be able to log in to applications in a decentralized form based on their digital identities, and authenticate their identity through authorization. For many Internet applications, there is no need to further store the user's identity information and login information.

In the cheqd ecosystem, based on incentives, the enthusiasm of issuers and holders to participate in the network is further promoted, while the cost of data acquisition for recipients is further reduced, and it is possible for them to further create new businesses.

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