Why Verified Credentials (VCs) are Coming to the Forefront in Digital Security and Identity Verification

What are VCs?

Verified Credentials (VCs) are digital documents that are cryptographically secure and tamper-evident, issued by a trusted authority. They serve as proof of identity, qualifications, or other attributes that any party can verify independently without relying on a central authority. These credentials can be stored and presented digitally, making them highly convenient and secure for various applications.

Some of the more popular types of Verified Credentials include:

1. W3C Verifiable Credentials (VC): This is the primary standard for digital credentials, providing a framework for cryptographically secure, tamper-proof digital records.
2. Open Badges 3.0: An evolution of the original Open Badges standard, now compatible with the W3C Verifiable Credentials model.
3. Comprehensive Learner Records (CLR): This standard captures and verifies various learning experiences and achievements. Leverages the Open Badges standard and is compatible with the W3C Verifiable Credentials
4. Europass Learning Model (ELM): Recently updated to use JSON-LD format and is compatible with the VC model. An extension of the W3C Verifiable Credentials data model.
5. ISO/IEC 18013-5: The primary international standard for mobile driver’s licenses (mDLs), providing specifications for implementation, security, and interoperability.

Why They’re Important for Identity

Reliable and trustworthy identity verification mechanisms are critical in an increasingly digital world. VCs provide a solution by ensuring that individuals can prove their identity or qualifications in a secure and privacy-preserving manner. This is especially important in the finance, healthcare, and education sectors, where accurate identity verification is crucial for accessing services and protecting against fraud.

VCs enable end-users to take control of their identity data, reducing the risk of data breaches and identity theft.

Why They’re Different to Passkeys and Not a Replacement or a Competitor

While Verified Credentials and passkeys serve purposes related to security and access, they operate in fundamentally different ways. Passkeys are primarily used for authentication; they grant access to systems or services by verifying that the user is who they claim to be. On the other hand, VCs additionally provide a verified set of claims about an individual’s identity or qualifications. They are not just about getting access but about proving identity attributes in a verifiable and secure manner.

One significant advantage of VCs is their usability across different sites and services. A VC issued by a trusted authority can be presented to various platforms to prove aspects of one's identity, such as age, professional certification, or educational achievements, without creating separate accounts or undergoing multiple verification processes. This interoperability enhances user convenience and security, as users can manage and share their credentials seamlessly and securely across various domains.

Therefore, VCs and passkeys are complementary technologies rather than replacements or competitors. While passkeys focus on authentication, VCs provide a versatile and secure way to verify identity attributes across various platforms, making them an invaluable component of the digital identity ecosystem.

Implementation: Direct or OIDC

Two main approaches to implementing verified credentials are direct implementation and indirect by using existing standards, such as OpenID Connect (OIDC).

1. Direct Implementation: This involves directly integrating VCs into your applications and systems. This approach provides maximum flexibility and control over the credential issuance, management, and verification processes. However, it can also be more complex and require substantial development effort and expertise in digital identity standards and cryptographic techniques.
2. Indirect Implementation: OIDC: OpenID Connect (OIDC) is an identity layer on top of the OAuth 2.0 protocol, commonly used for managing user authentication and authorisation. Implementing VCs through OIDC can simplify the process by leveraging existing standards and infrastructure. It allows for smoother integration with other systems and services that already use OIDC for identity management, making it a more accessible option for organisations looking to adopt VCs without starting from scratch.
   
   When used in multi-factor authentication or step-up scenarios, the indirect implementation allows for great authentication and authorisation user experience (UX).

Conclusion

Verified Credentials are a powerful, secure and reliable digital identity verification tool. Their ability to provide verifiable proof of identity attributes sets them apart from traditional authentication methods, making them an essential component in the future of digital security.

Secure and reliable identity verification solutions are becoming increasingly critical as the digital landscape evolves. At MakerX, we are committed to staying at the forefront of these advancements by helping our partners research and develop cutting-edge technology through strategic partnerships.

One such partnership is with Verified Orchestration, which specialises in providing a seamless identity and credential management infrastructure. This makes it easier for organisations to adopt and implement VCs via a Turnkey SaaS solution. For more insights, you can read about our collaboration in this blog post: Verified Orchestration’s Journey to Transform Trust at Scale.