Microsoft to Embrace Bitcoin for Decentralized Identities (DIDs)!

In the following Forbes article, Forbes' Kyle Torpey reports that Microsoft is considering a decentralized ID (DID) solution as a layer-2 protocol on a leading decentralized blockchain like Etherium, Litecoin or Bitcoin (with an apparent preference for Bitcoin, specifically).

Here are a few notable quotes from within the article:

After looking at various types [of] decentralized identity systems, Microsoft turned to public blockchains due to their ability to enable privacy, self-ownership, and permissionless access.

“After examining decentralized storage systems, consensus protocols, blockchains, and a variety of emerging standards we believe blockchain technology and protocols are well suited for enabling Decentralized IDs,” today’s announcement post from Microsoft says.

Identity is one of the long-touted use cases of blockchain technology that does not have anything to do with payments or currency. In today’s post, Microsoft points to Bitcoin, Ethereum, and Litecoin as three specific platforms that are suitable foundations for DIDs.

So why is a public blockchain a good fit for the root of a decentralized identity system? Much like Bitcoin itself, it comes down to removing trust in counterparties. No government or other centralized entity has control over or can censor identities that are rooted in a public blockchain.

Microsoft Not a Fan of Bitcoin Cash?

The post from Microsoft dismisses simple block size increases as an insufficient scaling approach to address the volume demands of such a system. Although not called out by name, Bitcoin Cash is the clearest example of such a move.

“While some blockchain communities have increased on-chain transaction capacity (e.g. blocksize increases), this approach generally degrades the decentralized state of the network and cannot reach the millions of transactions per second the system would generate at world-scale. To overcome these technical barriers, we are collaborating on decentralized Layer 2 protocols that run atop these public blockchains to achieve global scale, while preserving the attributes of a world class DID system,” says the post from Microsoft.

Microsofts' DID Plans

At this point, it’s unclear what exactly Microsoft gains from supporting the concept of decentralized IDs. However, some inferences can be made from the current state of the Internet.

The most obvious use case for DIDs within Microsoft products would be LinkedIn, which could be viewed as a sort of a reputation system for an individual's past education and work experience.

Longer term, this may be a play from Microsoft in the decentralized Internet space where they’re offering themselves as a company that will not build their financial future around spying on their userbase, which is effectively what is seen from the likes of Google and Facebook.

Microsoft writing a layer-2 protocol on the Bitcoin blockchain? To revolutionize identity databases? Does that qualify as Bitcoin being legitimized as revolutionary technology?

I think so...

...I think so, folks :)