Over the last year, the topic of verifiable digital identities have become increasingly talked about, partly due to the rise and integration of artificial intelligence into digital human spaces.
You look at social media today and find that a growing number of accounts are run by AI-powered bots. Sometimes they are obvious, and other times not very much. This is of course due to the varying advancement of specific AI systems powering each bot.
That said, the public consensus on these things is that at some point, it will become incredibly difficult to distinguish between a human account and an AI bot.
Nonetheless, AI robots or agents are not the only reason behind increased conversations on verifiable digital identities.
There are various other reasons for digital IDs to be verifiable, including fraud detection both in monetary systems as well as in governance, especially in an hyper-digitized world.
Vitalik Buterin warns that single digital IDs could erode pseudonymity
Ethereum co-founder Vitalik Buterin has introduced a new kind of digital identity system dubbed “pluralistic identity,” arguing it could protect privacy while enabling fair participation in digital life.
In a blog post published Sunday, Buterin explored the promise and pitfalls of zero-knowledge (ZK) proof-wrapped IDs, warning that even privacy-preserving systems can carry serious risks if they rigidly enforce one identity per person.
“ZK-wrapping solves a lot of important problems,” he wrote, but warned that “ZK-wrapped ID still has risks,” especially because enforcing one ID per person can undermine pseudonymity and expose users to coercion.
To achieve a flexible approach, Buterin proposed pluralistic identity systems, where no single authority controls identity issuance, as the “best realistic solution.”
He explained these could be explicit, using social-graph-based verification like Circles, or implicit, relying on multiple ID providers — government documents, social platforms, and others — so no one ID gains near-total market share. — Cointelegraph report
It is important to note that I have limited understanding of zero knowledge proofs and its application in ID proofing.
However, judging off the quoted report, the use of ZK-proof wraps for IDs was never going to work. We first have to understand that for the most part, IDs are not relevant, they are significantly less important in the grand scheme of things.
Irrespective of the system, be it monetary or governance, it's not really important.
For a monetary system, proofing identity is an invasion of privacy and generally a tool most relevant for a centralized system. When we come to the decentralized world, it's not relevant in any way.
You want to talk about monetary fraud or exploits?
Proofing one’s identity does very little to prevent these things, so rather than force a solution to a problem it can't best serve, investing in measures that focus on actual security against fraud and exploits is a great place to start.
Now, when it comes to governance, our current system necessitates proofing identity, but judging from the fact that said system has really not worked in favor of most of us, the decentralized alternative has to be the logical next step and that does not require identity proofing.
The reason is that blockchain-based governance introduces significant risks. As our economies are designed to incentivize and penalize, individuals are forced to act honestly otherwise risk losing a fortune.
But if we ignore the facts about proofing IDs and consider them relevant, Vitaliks proposal would pass as a reasonable route to take. It is paramount that individuals can still enjoy anonymity whilst proofing their identity when the need arises.