As the digital landscape evolves, verifiable credentials (VCs) will become increasingly important to securing and sharing information. Specifically, the widespread adoption of verifiable credentials can revolutionize how we think about identity, qualifications, and trust. In this post, we’ll explore this powerful tool and why it plays such a critical role in the future of your digital identity (DID).

An Identity Crisis for the Digital Age

Traditional credentials can be easily forged or manipulated, even digitally. This practice can lead to fraud, identity theft, and other significant security risks. For example, the worldwide fake degree industry has grown from $1 billion in 2015 to $22 billion in 2022, while at least 700,000 Americans have been customers of diploma mills and fake universities. These numbers highlight how difficult it is to verify legitimate credentials while maintaining security and efficiency—this is where verifiable credentials make the difference.

Verifiable Credentials to the Rescue

VCs are a digital representation of identifying information cryptographically confirmed by a third party. In other words, they are the digital equivalent of credentials like educational degrees, passports, driver’s licenses, and more. However, unlike physical documents or cards, VCs are tamper-proof, secure, and easily authenticated by those with appropriate permissions.

How Verifiable Credentials Work

With the basics of VCs covered, we can examine how they function in more detail. In general, there are three parties needed to verify credentials:

  • The Issuer: The authority allowed to issue a credential.
  • The Holder: The credential owner who oversees how it's managed.
  • The Verifier: The party in charge of ensuring the legitimacy of the credential.

Given the prevalence of fake educational credentials worldwide, the following example illustrates how entities might interact during the verification process to address this problem.

  1. The university (Issuer) awards the graduating student (Holder) a degree.
  2. The student wants to present it to a potential employer (Verifier); however, the employer also wants to ensure the degree’s legitimacy beforehand.
  3. Using a decentralized blockchain database, the employer will compare a public key attached to the certificate with the university’s key to confirm the credential’s authenticity.

Verifiable Credentials Across Industries

Despite the example used above, it’s important to remember that academic qualifications aren’t the only type of VCs. In fact, there are many industries in which VCs have practical applications:

Embrace the Future with Verifiable Credentials

VCs are an exciting development in the world of blockchain technology. They provide a secure and efficient way to share information and combat fraud across multiple industry use cases. As the world becomes increasingly digital, the importance of VCs will only grow alongside the need for robust authentication tools. Contact SIMBA Chain today to learn how organizations can build blockchain applications that leverage the power of VCs, no matter the use case.