Decentralized Identity: Your Reputation Travels With You - a16z crypto

Managing reputation information also requires publicly accessible data standards — agreed upon formats for, say, “what an attestation of a contribution looks like” or “how to formulate an on-chain record.” Structuring these inputs to reputation ensures interoperability, both (1) enabling people to meaningfully combine parts of their decentralized i... See more

More broadly, it is essential to expand access to sources of on-chain reputation. At present, crypto tends to skew affluent, male, and white. If the playing field for building on-chain identity isn’t leveled, this new source of reputation will accrue primarily to the already privileged, exacerbating existing social and socioeconomic divides.

The wealth of information stored on-chain could even upend markets as big as search and discovery. A range of matching algorithms will be enabled by the openly queryable nature of decentralized identities; whereas previously, matching algorithms could only be developed by whoever had access to our data. Additionally, until now we’ve only been able ... See more

For the sake of logistical simplicity (and because different facets of a person’s identity naturally overlap and interact), it makes sense to store one’s relevant activities and contributions in a single wallet. But any given person isn’t solely a creator, builder, investor, or collector; they’re many things at once. Thus, we need some way to take ... See more

unlike web2 profiles, decentralized identities are backed by hard evidence: a permanent, timestamped record of a person’s accomplishments, contributions, interests, and activities to date.

By moving identities on-chain, we could upend archaic financial processes and provide equitable access to capital, re-architect how talent is matched with projects, and provide entirely new paradigms for recognizing and compensating labor online.

Once all this identity data has been recorded on-chain, we’ll need systems in place to map and interpret it so that it makes sense to the wallet holder and those they interact with. Since wallets are also used for mundane content storage and transactions, this task is especially challenging: wallets accrue a lot of noisy data.

instead of creating temporary profiles like we do in web2, web3 promotes long-term thinking. If people were empowered to build and maintain permanent identities online, we believe that on-chain systems could encourage people to more carefully curate the reputation markers that they carry with them into the future. In this case, curating a permanent... See more

But in order to mainstream decentralized identity, we must first establish systems that map people’s relevant off-chain experiences and affiliations on-chain. Then we must build mechanisms to standardize, process, and prioritize the influx of data that will be added on-chain. On the way, we’ll need to solve endemic challenges to decentralized ident... See more

If decentralized identity were widely adopted, people would be able to carry their full selves with them as they traverse cyberspace: their affinities and experiences reflected by what they’ve created, contributed to, earned, and owned online, no matter the specific platform. This would bring us closer to how things work in the physical world, wher... See more