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Microsoft’s Decentralized Identifier ION Running Atop BTC Network Could Make Entering Passwords a Thing of the Past

By November 9, 2021 No Comments

Key takeaways:

  • Microsoft’s Identity Team has launched Decentralized Identifier network ION that runs on the Bitcoin network as a layer 2 solution
  • ION-created digital identities (IDs) are linked to the BTC network and ensure that a user’s personal information is authenticated when logging into online services
  • World Wide Web Consortium is currently considering recognizing decentralized identifiers as a universal standard

The process of entering your username and password could soon become a thing of the past, thanks to Microsoft’s ION Decentralized Identifier (DID). The service utilizes blockchain technology to authenticate online identities and runs as a layer 2 solution on the Bitcoin network.

How does Microsoft’s ION work?

While Lighting network, the most well-known layer 2 technology running on the Bitcoin network, facilitates payments, ION uses a similar approach to generate digital IDs that can be used when accessing various online services, from social media accounts to banking websites.

The full implementation of a blockchain network such as ION would make the process of using passwords, emails, and other traditional identifiers a thing of the past. When accessing a particular online service for the first time, the user would have to sign its digital identity with their ION account. Having done so, personal data (such as name, address, etc.) would get stored off-chain for maximum security. 

Various IDs that the user creates can serve a number of different use cases. For instance, for recurring tasks, such as accessing email, ION-created IDs can be used to log into a user’s account on a recurring basis. For one-off use cases, such as verifying concert tickets, one-time IDs can be created and disregarded once used.

Version 1 of ION nodes can process up to 10,000 ID requests in a single transaction and uses  InterPlanetary File System (IPFS) protocol to store IDs to the Bitcoin blockchain. Cryptographic links connecting ION and Bitcoin network ensure the authenticity of a user’s ID.

Senior project manager at Microsoft’s Decentralized Identity team, Daniel Buchner, has written a quick overview of the ION network in his recent blog post: 

“We are excited to share that [version 1] of ION is complete and has been launched on Bitcoin mainnet. We have deployed an ION node to our production infrastructure and are working together with other companies and organizations to do so as well. ION does not rely on centralized entities, trusted validators, or special protocol tokens. ION answers to no one but you, the community.”

Decentralized identity introduces a new use case for blockchain technology, which is all too often used exclusively for various monetary applications. The proliferation of decentralized identifiers (DIDs) is likely to pick up the pace if the World Wide Web Consortium (W3C) ends up recognizing the nascent blockchain technology as an international standard.