An identity is represented by its identifier and a set of attributes. For example, your identifier could be your wallet address and your attributes could be non-fungible tokens (NFTs) or soulbound tokens (SBTs). Or your identifier could be your DID (decentralized identifier) and your attributes could be verifiable credentials (VC), the W3C standard used in Polygon ID.
• Non-Fungible Tokens (NFTs): are unique representations of an asset on a blockchain. NFTs have frequently been speculative “assets” used to represent community memberships, profile pictures, art, metaverse land, and more. In digital identity, NFTs are used primarily as a form of purchasable membership pass or as a certificate. Some characteristics of NFTs are:
- Identifier is a wallet address: NFTs are associated with static, public wallet addresses.
- Transferable: NFT can be transferred to another address therefore to another user.
- Tradable: NFTs facilitate the seamless buying and selling of digital assets.
- Traceable: Anyone can see on the blockchain how an NFT has been transferred.
- Blockchain specific: An NFT is tied to a specific blockchain.
- Public: NFTs are public on the blockchain; anyone can see them.
- Costs: If you were to issue an NFT, you would have to pay blockchain minting fees.
• Soulbound Tokens (SBTs): are NFTs that can't be transferred and are permanently tied to an individual owner. They are designed to store personalized data in a secure and non-transferable, non-tradable way. Although SBTs have more potential than NFTs to digitize identities, they still have the downside of being public on the blockchain and therefore are not suitable to hold sensitive data.
• Verifier Credentials (VC): are a type of credential that an Issuer cryptographically signs about a user. These credentials (e.g., KYC, credit score, master’s degree, etc.) are stored in the user’s identity wallet and not on the blockchain. These credentials are therefore private by default and are proven upon request, and in the case of Polygon ID, thanks to zero-knowledge technology, they can be proven without revealing any information, unless the user decides to do so via Selective Disclosure. Verifiable credentials can be programmed to be verifiable for specific durations of time or revocable by the Issuer. Some characteristics of VCs are:
- Identifier is a DID: The identifier is not a wallet address, but a DID (decentralized identifier). The VCs are owned by the DID.
- Non-transferable: VCs are issued to a specific identity (i.e. the user/Identity Holder) and cannot be transferred.
- Non-tradable: As the VCs cannot be transferred, they cannot be traded. You cannot sell your credentials. They are part of who you are.
- Not traceable: With the profiles anti-tracking feature of Polygon ID, you can interact with different vendors via multiple DIDs generated from the main DID.
- Interoperable: VCs standardize the format of information allowing Identity Holders to own their data and selectively share it with relevant parties across the internet, including between different blockchains. For example, once you have your KYC credentials, you can reuse them to authenticate you in different applications.
- Private by default: VCs are not publicly viewable as they are stored in the user’s digital wallet (you own your data), and will only be shared upon user consent and without necessarily revealing any information, thanks to zero-knowledge proofs.
- Costs: as the VC is not transferable and is not stored on the blockchain, there are no minting or transfer costs as withNFTs. For more details about the costs of running Polygon ID, see the question “What is the cost of Polygon ID?”.
Verifiable credentials, the W3C standard implemented in Polygon ID, are the most practical technology to digitize our identities and finally allow people to prove who they are on the internet. The challenge is user adoption, and Polygon ID is leading the way in the Web3 space. Join the ecosystem of projects already implementing Polygon ID!