By James Schulte
What does the decentralization driving the European Union’s digital identity specifications (eIDAS 2.0 and EUDI) mean for the future?
One way to see it is as the virtual extension of Europe’s single market: The free movement of goods, services, capital, and people throughout the EU’s member states.
With verifiable digital credentials managed from digital wallets, EU citizens and companies will be able to access government, commercial, and financial services seamlessly from anywhere in the EU in a privacy-preserving, secure way.
This is the immediate benefit, a much simpler, streamlined way of managing the duties of citizenship and the necessities of business.
But if we drill down to a more fundamental level, it’s more transformative and exciting than that.
What decentralized identity really means is that information can be permissioned to go from anywhere to everywhere, seamlessly, securely, and instantly. This is the real revolution in communications.
Identity is more than just who you are
To understand why this is a revolution, we need to understand that identity covers anything that can be identified and hold an identifier. Obviously, this means people, organizations, government agencies, companies; but it also means connected devices such as drones, robots, and sensors.
Less obviously, but increasingly important, digital identity applies to chatbots and AI agents. Even objects can have identities if they can be continuously identified through cameras and sensors and manipulated through spatial technologies.
As all these entities can be assigned identifiers, they can be issued with Verifiable Credentials containing contextual information that can be shared and authenticated seamlessly.
If you trust the source of the credential, you can trust the information contained in the credential and be certain that it hasn’t been altered.
This is why Verifiable Credentials are the building blocks for a new era of innovation: They enable instant, portable trust — from the real world to the virtual and back to the real world.
Three examples of verifiability’s impact on the future
Mitigating the existential threat of biometric identity fraud: Biometrics were supposed to solve the problem of passwords as identifiers. Your biometrics are unique to you, instantly verifiable, can’t be forgotten, and don’t need to be changed every few months.
Except, in order to authenticate a liveness check, we ended up storing biometric data in the same way we stored passwords and usernames: centralized databases. A biometric data breach is much more of an existential risk because, unlike a password, you can’t (really) change your face if your biometric is stolen. And then generative AI fraud came along with the capacity to fake your biometrics.
Decentralized Identity and Verifiable Credentials solve these problems. With an authenticated biometric in a Verifiable Credential, you no longer have to store biometric data in a centralized database to verify it. The person simply “brings their own biometrics,” and presents their biometric credential at the same time as they perform a liveness check; the software compares the two to ensure they match. This also mitigates attempts at deepfake phishing: A liveness check has to be corroborated with an authenticated biometric bound to the real owner and their device.
This makes complying with Europe’s regulations on biometric protection SO much simpler!
Connecting Europe to the world and the world to Europe: Decentralized identity and Verifiable Credentials come in different flavors, some with more advanced features that have compelling benefits for business. The key will be to make all these flavors blend seamlessly so that interoperability is frictionless.
Here, the future is very close. Indicio has already successfully combined an EU-specified identity (IATA’s OneID) with a digital passport credential (ICAO DTC Type 1) in a digital wallet to make each step of an international journey seamless.
Digital travel is driving interoperability between different protocols and standards, and Indicio is focused on making multi-credential workflows as simple as possible to connect Europe to Asia, Africa, and Canada.
This doesn’t just scale the market for digital travel, the fact that seamless border crossing requires the highest possible assurance means that digital passport credentials will be the most powerful form of decentralized identity, deployable across use cases where authentication is critical such as financial services and payments.
Generating portable, resilient, and reliable digital infrastructure:
In enabling information to go from anywhere to everywhere, decentralized identity removes both the practical constraints on creating markets (the cost and complexity of direct integrations and the security required for centralized identity authentication) and provide these markets with trustable data for instant decision making.
There’s a lot going on here, but think of it this way: Markets no longer need intermediaries or third-party rails to function as information brokers. If you trust the source of the credential, you can trust the information in the credential. And with the authenticated biometrics providing the highest grade of digital identity assurance, you can integrate AI-enabled chat and search in a permissioned way, and include direct payments across secure, peer-to-peer channels.
The combination of authenticated identity for people and agents, permissioned data access, secure communications, and AI driven search has explosive growth potential. It means that any entity can create a trust network and the trust network can share any kind of information securely between its members.
With the right communications protocol, Verifiable Credentials become digital rails for portable trust.
Before the future, today
Ok, maybe we are getting ahead of ourselves — or at least the EU. We must note that the EU digital identity standards — at present — shy away from full decentralization. But this is a look at the future. When Apple’s iPod was first launched, promising “ a 1000 songs in your pocket,” people didn’t immediately see that it would be the foundation for a phone 5,000 times more powerful in computing power than the supercomputers of the 1980s.
Technology is filled with examples where the initial use cases and specifications rapidly seed innovation. EUDI is a catalyst for European innovation, digital public infrastructure, and a new era in data privacy and security.
If you want to drive this innovation, we have three recommendations:
Choose a system that equips you to manage the diverse approaches to digital identity and streamline them into a simple workflow. Simply put, Europe is not going to be a walled garden for digital services and ecommerce. You’re going to want a system that can easily navigate between OID4VC and DIDComm.
Choose a system that allows you to accelerate to country-level and global scale in credential management. Mediation — the ability to connect to mobile devices and handle high volume credential issuance and verification is non-negotiable. The promise of a better digital world begins with delivering solutions that work.
Choose a technology that will be able to manage agentic AI, authenticated biometrics, and connected devices. Start fast with simple use cases, master the technology, and then scale to do the beat-the-competition stuff.
Choose a team with global experience who can deliver a business solution and not just a technical implementation.
In short, choose Indicio Proven: It can handle the wave of innovation that’s coming, and it’s backed by the team building that future right now.
Contact us now to see a demo, discuss strategy, or start using Verifiable Credentials to simplify your business.
