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One of the most common questions I get when to customers and analysts about the self-sovereign (SSI) movement is, “Why blockchain?”

This question tends to stem from the notion that data associated with a person’s identity is destined to be stored, shared and used for verification on some of distributed ledger . My hope is that this article with help to debunk that notion and provide a basic foundational understanding of how distributed ledger is being used to solve our identity infrastructure dilemma and resolve the impacts of the internet lacking an identity layer.

Busting the myth of on-chain PII

One of the most common myths surrounding blockchain and identity is that blockchain technology provides an ideal distributed alternative to a centralized database for storing personally identifiable information (PII). There are several flavors of this perception: (a) use blockchain to store the data; (b) use a blockchain as a distributed hash table (DHT) for PII data stored off-chain.

Let’s solve digital identity management together

Yes, blockchain can technically support the placement of PII on the chain or used to create attestations on the chain that point to off-chain PII storage. Just because technology can be applied to solve a specific problem does not mean that it is the proper tool for the job. This misconception about PII storage in the early stages of the blockchain technology adoption lifecycle is so pervasive that it recently inspired a Twitter thread dedicated to the debate on why putting hashed PII on any immutable ledger is a bad Idea. From GDPR compliance, to correlation, to the cost of block read/write transactions, the debate continues.

Blockchain technology is much more than a distributed storage system. My intent herein is to help the inquisitive identity solution researcher debunk beliefs about PII storage approaches by gaining an understanding for how blockchain can be used as an infrastructure for identity attestations. My hope is this article will offer a helpful aid towards that education and awareness.

The SSI initiative is a perfect counterpunch to detrimental PII management practices. A SSI solution uses a distributed ledger to establish immutable recordings of lifecycle events for globally unique decentralized identifiers (DIDs). Consider the domain name system (DNS) as an exemplar of a widely accepted public mapping utility. This hierarchical decentralized naming system maps domain names to the numerical IP addresses needed for locating and identifying computers, services or other connected devices, with the underlying network protocols. Analogous to the DNS, a SSI solution based on DIDs is compliant with the same underpinning internet standard universally unique identifiers (UUIDs) and provides the mapping of a unique identifier such as DID, to an entity — a person, organization or connected device. However, the verifiable credentials that are associated with an individual’s DID and PII are never placed on a public ledger. A verifiable credential is cryptographically shared between peers at the edges of the network. The recipient of a verifiable credential, known as a verifier, in a peer to peer connection would use the associated DID as a resource locator for the sender’s public verification key so that the data in the verifiable credentials can be decoded and validated.

No PII on ledger, then why blockchain?

So, what problem is blockchain solving for identity if PII is not being stored on the ledger? The short answer is that blockchain provides a transparent, immutable, reliable and auditable way to address the seamless and secure exchange of cryptographic keys. To better understand this position, let us explore some foundational concepts.

Encryption schemes

Initial cryptography solutions used a symmetrical encryption scheme which uses a secret key that can either be a number, a word or a string of random letters. Symmetrical encryption blends a secret key and the plain text of a message in an algorithmic specific manner to hide a message. If the sender and the recipient of the message have shared the secret key, then they can encrypt and decrypt messages. A drawback to this approach is the requirement of exchanging the secret encryption key between all recipients involved before they can decrypt it.

Asymmetrical encryption, or public key cryptography, is a scheme based on two keys. It addresses the shortcomings of symmetrical encryption by using one key to encrypt and another to decrypt a message. Since malicious persons know that anyone with a secret key can decrypt a message encrypted with the same key, they are motivated to obtain access to the secret key. To deter malicious attempts and improve security, asymmetrical encryption allows a public key to be made freely available to anyone who might want to send you a message. The second private key is managed in a manner so that only the owner has access. A message that is encrypted using a public key can only be decrypted using a private key, while a message encrypted using a private key can be decrypted using a public key.

Unfortunately, asymmetric encryption introduces the problem of discovering a trusted and authentic public key. Today the most pervasive technique for public key discovery in communications based on a client-server model is the use of digital certificates. A digital certificate is a document that binds metadata about a trusted server with a person or organization. The metadata contained in this digital document includes details such as an organization’s name, the organization that issued the certificate, the user’s email address and country, and the user’s public key. When using digital certificates, the parties required to communicate in a secure encrypted manner must discover each other’s public keys by extracting the other party’s public key from the certificate obtained by the trusted server.

Trust chains

A trusted server, or certificate authority, uses digital certificates to provide a mechanism whereby trust can be established through a chain of known or associated endorsements. For example, Alice can be confident that the public key in Carol’s digital certificate belongs to Carol because Alice can walk the chain of certificate endorsements from trusted relationships back to a common root of trust.

Our current identity authentication scheme on the internet is based on asymmetric encryption and the use of a centralized trust model. Public key infrastructure (PKI) implements this centralized trust model by inserting reliance on a hierarchy of certificate authorities. These certificate authorities establish the authenticity of the binding between a public key and its owner via the issuance of digital certificates.

Explore our IBM Blockchain Enterprise Plan to learn how a certificate authority (CA) is used by Blockchain Platform.

Understanding the key exchange dilemma

As the identity industry migrates beyond authentication based on a current client-server model towards a peer-to-peer relationship model, based on private encrypted connections, it is important to understand the differences between symmetric and asymmetric encryption schemas:

  • Symmetric encryption uses a single key that needs to be shared among the people who need to receive the message.
  • Asymmetrical encryption uses a public/private key pair to encrypt and decrypt messages.
  • Asymmetric encryption tends to take more setup and processing time than symmetric encryption.
  • Asymmetric encryption eliminates the need to share a symmetric key by using a pair of public-private keys.
  • Key discovery and sharing in symmetric key encryption can be addressed using inconvenient and expensive methods:
    • Face-to-face key exchange
    • Reliance on a trusted third party that has a relationship with all message stakeholders
  • Asymmetric encryption eliminates the problem of private key exchange, but introduces the issue of trusting the authenticity of a publicly available key. Nevertheless, similar methods can be used for the discovery and sharing of trusted public keys:
    • Face-to-face key exchange
    • Reliance on a trusted third party that has a relationship with all message stakeholders
    • Certificates that provide digitally signed assertions that a specific key belongs to an entity

Rebooting the web of trust

What if we wanted to avoid this centralized reliance on a trust chain of certificate authorities? What if we could leverage distributed ledger technology as a transparent and immutable for verifying and auditing the authenticity of the binding between a public key and its owner?

An alternative to the PKI-based centralized trust model, which relies exclusively on a hierarchy of certificate authorities, is a decentralized trust model. A web of trust, which relies on an individual’s social network to be the source of trust, offers one approach to this decentralized alternative. However, the emergence of distributed ledger technology has provided new life to the web of trust vision. Solutions using SSI can leverage distributed ledger as the basis for a new web of trust model that provides immutable recordings of the lifecycle events associated with the binding between a public key and its owner.

Decentralized PKI in a nutshell

As explained earlier and depicted in the diagram below, in a PKI based system Alice and Bob need to establish a way to exchange and store their public keys. Conversely, in a blockchain-based web of trust model, the storage of public keys are managed on the public ledger. As participants in a global identity network, Alice and Bob create their unique DIDs, attach their public keys and write them to the public ledger. Now any person or organization that can discover these DIDs will be able to acquire access to the associated public keys for verification purposes.


My hope is that this article has provided you with a basic understanding and appreciation for why blockchain offers a powerful infrastructure to identity attestations. The SSI movement uses a blockchain to addresses several solution requirements but the most basic is for the secure and authentic exchange of keys which was not possible using PKI. Minimally, you should now be armed with enough awareness of decentralized identity principles to establish some doubt about those advocates that champion the use of blockchain for the storage of personal data.

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