Microsoft previews decentralized identity network based on blockchain agnostic protocol

Quick Take

  • Microsoft announced on Monday an early preview of its decentralized identifier (DID) network, ION 
  • While ION runs atop of the Bitcoin blockchain, the company is developing a protocol that can support DID networks as a second layer on any blockchains
  • The software giant laid out its plan to build a DID system last year, and it is looking to scale its DID network to accommodate large volumes of transactions in identity authentication 

Microsoft is making a breakthrough with its year-long effort to bring major infrastructure change to how internet users’ identities are stored and verified. The tech giant announced on Monday that it is test running its decentralized identifier (DID) network running atop the Bitcoin blockchain.

The decentralized identifier network, dabbed ION (Identity Overlay Network), is based on a protocol called Sidetree that can run on any blockchains. Sidetree is designed to tackle one of the biggest challenges that DID networks face – scalability. If running directly on blockchains, DID networks would not be able to accommodate all transactions because current blockchains operate at just tens of transactions per second. As Microsoft senior program manager Daniel Buchner wrote in the blog post, this is “nowhere near the volume a world full of DIDs would demand.” 

Thus the ION team develops the Sidetree protocol that creates DID networks as the second layer on top of existing blockchains, similar to the Lightning Network. Buchner noted that they has since observed tens of thousands of DID operations per second on low-powered consumer reference hardware after implementing the second layer architecture. 

Last year, Microsoft published a white paper detailing its vision for a decentralized identity system. The DID system essentially does away with a centralized authority managing internet users’ identity information such as emails and usernames. Under the DID system, these emails and user names are replaced by decentralized identifiers residing on a distributed ledger and only accessible by users with valid private keys. DIDs allow users can create and control their own identity information. They can also have several DIDs to store different parts of their identity information.

As laid out in the white paper, Microsoft’s original plan was to develop the DID network as a second layer on top of existing blockchains, similar to the Lightning Network, so that the network can process large volumes of transactions. 

With the software giant’s far-reaching influence across the network infrastructure industry, Microsoft leading the DID effort may expedite the shift from centralized to decentralized identity management. The software giant’s cloud identity systems, such as Azure Active Directory, are already being used by many companies. In the white paper, the firm stated that it plans to expand these identity products to include DIDs and further protect user identities. 

Microsoft made its DID projects open source to welcome contributions from the developer community and organizations. The firm itself is a member of the Decentralized Identity Foundation (DIF), a nonprofit that promotes the development and implementation of DID. Microsoft also collaborates with firms like ConsenSys and dapp startup Transmute to develop the DID networks.

The ION network is now available on Bitcoin testnet. Buchner said that the ION network on Bitcoin mainnet will be launched publicly in the coming months.

“We’re also engaging with ecosystem partners to operate ION nodes. Collaborating with partners to validate the protocol and build out the network is an essential step in preparation for mainnet release.”