Microsoft is developing a blockchain-based identification system.

Microsoft technology giant plans to use blockchain technology to solve some problems in the management of personal digital data, including in the field of privacy and security.

The article, entitled "Decentralized digital identity and the blockchain – the future as we see it", Microsoft has announced that it intends to use the blockchain technology underlying Bitcoin and Ethereum, decentralized identifiers (Decentralized ID, or DID) as a means of authentication in Microsoft Authenticator.

Unlike the traditional forms of identification used today, a decentralized identification system is not controlled by any single institution, such as a government or a technology company. The idea is that DID give the user complete individual control of their own identity and reputation.

After reviewing various types of decentralized identity systems, Microsoft reached out to public blockchains because of their ability to provide privacy, self-ownership, and access without third-party authorization.

“After the study of decentralized storage systems, protocols, consensus of the block chain and new standards, we believe that blockchain technology and protocols are well suited to decentralization ID”, – said in the announcement Microsoft.

Microsoft specifies that the proper platforms to create on their basis DID number the company believes blackany Bitcoin, Litecoin, and Ethereum.

The key point of the invention is that instead of relying on third parties, the blockchain can regain control over the data in the hands of the client, provided that personal data is safely stored.

"Today, users are forced to agree to the use of their personal data by countless applications and services to collect and store information without any control," the report said. "As violations and theft of information become more frequent and complex, users need a way to take control of their own personal data."

In the past, critics argued that identification systems built on public blockchains would be too expensive and difficult to scale, but Microsoft's work suggests that second-tier systems can be used to reduce the necessary amount of costly interactions in the chain. This is somewhat similar to how Lightning's computing network can be used to scale Bitcoin payments more efficiently.

"While some blockchain communities have increased the capacity of transactions in the chain (for example, block size increase), this approach usually degrades the decentralized state of the network and cannot reach the millions of transactions per second that the system will generate globally. To overcome these technical barriers, we work with decentralized layer 2 protocols that run on these public blockchains to achieve a global scale, while retaining the attributes of a world – class DID system,” Microsoft said.

If you liked my post please upvote & follow me.