The Way We Handle Identity Online Is Fundamentally Wrong

Identity is a concept we understand rather differently on and offline.

Identity is a concept we understand rather differently on and offline. In the physical world, most of us are not keen on sharing more than is absolutely necessary. On the internet, however, most users simply agree to accept and consent to everything without much consideration as to who’s going to use our personal data or how. This has been raising concerns for some time now, and rightly so. 

Our Online Identities Don’t Belong to Us

Right now, we entrust, though not exactly willingly since it is largely the only option, our identities to the third parties. 


Take a certain social media platform or search engine for example, which asks for a couple of identifiers, so you can start using the platform. That in and of itself isn’t so bad because, technically, at this point, that information doesn’t even have to be real. 

Ingo Rübe, creator of the KILT Protocol (more on that later), points out in his exclusive interview with DailyCoin, interesting things happen once you begin using said platform. 

“Once the user starts behaving on the platform, it starts to generate credentials for them. The user never gets to see that information, it doesn’t belong to them. And if they want to use another service, choosing to prove identity with the information from the previous platform, those platforms start negotiating between themselves without the user ever getting involved.”

Essentially, what happened is that certain platforms and companies eventually started providing our online identities for us to use other services. 

Since the internet as we know it isn’t really equipped with the tools to verify identity, this approach may well be efficient, but it’s far from secure, as massive data breaches and identity theft are anything but uncommon. It’s centralized, out of users’ control, and, according to Mr. Rübe, fundamentally wrong. 

Applying the Same Logic from Real Life

Decentralized identity and control of personal data are some of the fundamentals of Web 3.0. The key difference is authorizing access to a certain amount of personal data instead of providing it every time we want to register for something, and updating it separately when details change. 


The KILT Protocol is based on blockchain and works in a very similar fashion to processes in real life, where trusted authorities issue documents that are then owned and controlled by the people. 

A good example is the driver’s license, Rübe explains. 

“There are three roles involved in the process of getting a driver’s license: there’s the claimer (the student who passed the test), the attester (the DMV), and the verifier (the policeman). The attester acts as a trusted entity in this process, as it checks whether the student passed the test and their claim for the driver’s license is valid. 

Therefore, when the policeman checks the license, they see that it was issued by the DMV, which is trusted to supervise the issuing process.”

Blockchain technology enables users to prove the authenticity of a document to anyone they decide to show it to, this is something it can already do. 

Of course, storing personal data on a blockchain is one of the things that should never be done. That’s why the solution that KILT offers, as an issuer, is to store only the checksum (hash values) of credentials on its blockchain, without storing any actual data. 

As in real life, different services require different credentials, and none of these service providers need the entire identity of a user. 

This ability to control how much one shares with a certain company is something we don’t have today, but could very well be an essential principle of using services on the internet in the near future.

On The Flipside

  • Standardization is going to be a key challenge as there are a number of competitors offering similar solutions and aiming for the same goal.

You can watch the full interview with Ingo Rübe here:

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Milko Trajcevski

Milko Trajcevski is a DailyCoin news reporter, mainly focused on Ethereum (ETH), Cardano (ADA), and their founders (Vitalik Buterin and Charles Hoskinson). Milko is an avid follower of crypto and blockchain technology and has written thousands of articles on the subjects. He finds joy in transforming complex issues into written content that anyone can understand. Milko has used and analyzed numerous exchanges, such as Coinbase, FTX, and Binance. He also closely follows all of the latest news around the largest decentralized exchanges (DEXs). Location: Skopje, Macedonia