What is Reusable Identity?

Currently, we live in a digital world of silos or isolated compartments. Each service, website, or platform manages its own data; what we do in one app doesn’t carry over to another, and the information we validate in one service is only applicable to that specific environment. How many times do we verify our identity online? How often have we had to fill in our name, email, age, or scan our ID? Every time we want to access a new platform or institution, we must go through a process known as KYC (Know Your Customer). Some KYC processes aren’t too burdensome—perhaps only requiring email verification or a captcha—while others demand that you take photos, record videos, scan documents, or answer several questions. The most frustrating part is that this identity validation can’t be reused on other platforms or online services. Until now.

Verifiable credentials and decentralized identity can change this—and it’s a significant change, as they can radically transform how we interact in the digital world. The idea is simple: just as in the physical world we don’t have to revalidate our identity every time we interact with someone—instead, we present our identity credentials (such as an ID card, driver’s license, club membership, etc.)—we can do the same in the digital realm. For example, when I interact with a bank to open an account or conduct certain transactions, I must go through different KYC processes. The problem is that the validation I complete for Bank A isn’t accepted by Bank B, or by another institution. A considerable amount of our online time has been wasted repeating the same process hundreds of times. This results in lost time and money for both citizens and for banks, governments, or organizations in general. For institutions, it’s very costly to validate the identity of each new client—costs that were minimal in the physical world. Now, thanks to the power of verifiable credentials, we can replicate the process we used in the physical world. We can use our primary credentials to validate our identity and avoid going through another KYC, as the validator (be it a bank, government, telco, etc.) can verify that the credential is valid, the issuer is recognized, and that I am indeed the owner of that credential. This means less time and lower costs to validate the identity of my clients or citizens.

For the citizen, this means that I can reuse the same credential as many times as I want, while preserving my privacy and enjoying a much more frictionless user experience. This is the value of reusable identity, or circular identity: you don’t have to undergo a new KYC process every time you interact online. In our countries, where the national ID (or, in some cases, the driver’s license) is the most commonly used credential to validate our identity, it would be a major advancement to have those credentials in a verifiable format that each organization could use for their own KYC processes. Today, we have “digitized” credentials—meaning that we have them on our devices—but they can’t be used to validate identity online and often don’t serve that function in the physical world either. For example, in Argentina there is an online driver’s license, but almost no one uses it because of its complexity in terms of updates and third-party validation. Having a digital credential on your phone does not mean that it possesses all the capabilities required in the online world.

Verify Once, Reuse Everywhere

The greatest benefit of Reusable Identity is the enhanced experience for citizens, as it eliminates the need to repeat the same process every time they interact with a new institution. Beyond this user experience benefit, there are many other advantages related to privacy, scalability, and security for institutions. The most radical change lies in the architecture of the new reusable identity and its effects on personal privacy. While traditional Digital Identity systems require communication with an Identity Provider (IdP) to verify or validate credentials, the Reusable Identity model allows verification directly through the signatures contained in the credential—without needing to contact the issuer.

Reusable identity can drastically reduce costs for companies that need to validate their customers’ identities (mainly banks and telcos), as they often have to perform multiple verification processes for the same end customer registering with different companies. Under this model, the user only needs to validate their identity once, whether with the state or one company, and can then use that validation with any other company or organization.

This interoperability of identity is achieved through shared protocols and standards, which are key to any model of Decentralized Identity and Verifiable Credentials. At QuarkID, our goal is for Latin America to join other regions that are implementing these technologies.