Decentralized Identity: Your Reputation Travels With You - a16z crypto

If decentralized identity is the future of the web, then the contributions that you accumulate in your crypto wallet — the articles you write, the content you curate, or the things you buy — will become very important.

ontextualizing information explains why you’ve earned or bought an artefact. Earning an NFT for a contribution to a project, for example, should provide context about why you earned it and what skills you demonstrated.

Likewise, on-chain data could be used to gauge engagement or interest in specific creators or brands. A music artist, for example, could easily identify their top fans based on platform-agnostic, on-chain interactions and reward them with exclusive access or other perks. In the financial realm, decentralized identity could enable an internet-native... See more

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

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.

And in addition to organizing the raw data, it’s important to have systems that aggregate and simplify the information contained in a person’s wallet to make that information more clearly interpretable and comparable across individuals.

In the realm of talent sourcing, decentralized identities promise “open CVs” based on fine-grained records of professional activities and accomplishments. This could allow for a fuller picture of someone’s past work and provide more granular insight into their skills and contributions.

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.

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

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