Microsoft launches beta version of decentralized identification system on Bitcoin blockchain

  • Microsoft released a beta version of its Identity Overlay Network on the Bitcoin blockchain (BTC).
  • There is not yet a release date for the final version of the Overlay Identity Network. However, a final version could come out this fall.

A Microsoft blog post announced the launch of the beta version of the Identity Overlay Network (ION). Launched on the Bitcoin (BTC) blockchain using the Sidetree protocol, ION is an open, permission less second layer network first announced in May 2019. The goal of the project is to create decentralized identifications that replace the need to utilize usernames and give each person more control over their data.

The announcement was made by Daniel Buchner, one of the developers of the open source project. Buchner developed the basic formula of the protocol that uses the ION in 2017. Since then, the development has been carried out together with the team of the Decentralized Identity Foundation. The Sidetree protocol is what makes it possible for unique identifiers to be created, allowing users to manage and control their metadata:

Sidetree is a protocol for creating scalable decentralized public key infrastructure (DPKI) networks that can run atop of any existing decentralized ledger system (e.g. Bitcoin) and be as open, public, and permissionless as the underlying ledger they utilize.

Use cases and deployment on the Bitcoin (BTC) blockchain

As Buchner outlines, the ION has been developed as a decentralized network from the beginning. Therefore, it will operate independently of any centralized party and “trusted intermediaries” such as Microsoft. Furthermore, the ION will not depend on any special utility tokens, trusted validation nodes or additional consensus mechanisms, as Buchner outlined.

The developer emphasized that anyone will be able to run an ION node to participate. During the development the ION team had help from collaborators who gave feedback and operated nodes to support the project. Among them are the Bitcoin self-custody service, Casa, BitPay, and the crypto exchange Gemini, among others. Buchner also offered some use cases and attacks that could be prevented with the ION:

We built this decentralized ID/DPKI layer that can act as the foundation for universal encrypted messaging, privacy-preserving decentralized apps, uninterdictable gig econ networks, & filter out fraudulent accounts on social media.

From its launch, users can use the ION to create their own decentralized identities (DID) and use self-issued open identities that can be used in applications and sites, among others. Companies will also be able to create verifiable credentials for their employees/users.

There is not yet a release date for the final version, but the team will work to increase the community, contributors and node operators. In addition, they will use the feedback they receive to improve the protocol and enhance the ION. The final release could be launched this fall.

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About Author


Reynaldo Marquez has closely followed the growth of Bitcoin and blockchain technology since 2016. He has since worked as a columnist on crypto coins covering advances, falls and rises in the market, bifurcations and developments. He believes that crypto coins and blockchain technology will have a great positive impact on people's lives.

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