Verifiable Credentials and Their Use Cases

Credentials are an integral part of our lives, as they validate our achievements, qualifications, and identities. Each credential carries the holder’s name along with relevant personally identifiable information. Additionally, it encompasses details regarding the issuing authority, type of credential, description, date of issuance, expiration date, and the signature or seal of the issuing authority. Credentials can take various forms, including academic degrees, professional certifications, licenses, and more.

Within a credential, there are one or more claims. A claim is a specific piece of information or an assertion made within a credential. Take a driver’s license, for instance; it is a form of credential that holds multiple claims, such as the holder’s name, date of birth, address, type of license, expiration date, and license number. Presenting a credential serves various purposes such as establishing authority, verifying identity, demonstrating qualifications, or gaining access to certain privileges.

As we move forward in an increasingly digital world, the landscape of credentials is undergoing a revolutionary transformation. Keep reading to see how credentials are turning digital and how verifiable credentials are playing a pivotal role in this evolution, enhancing security, privacy, and convenience.

Understanding the Credential Ecosystem

In the credential ecosystem, there are three key players:

Issuer: The authoritative entity that creates and issues credentials. Issuers can be government agencies, educational institutions, certification bodies, or any organization that has the authority to attest to certain information or achievements.

Holder: The individual or entity that receives and holds the credential. The holder is the subject of the information contained within the credential.

Verifier: The party that checks and confirms the authenticity and validity of the information in the holder’s credentials.

Physical vs. Digital Credentials

Credentials can come in various formats and may utilize different authentication methods. They can also differ in terms of portability and accessibility. Broadly speaking, credentials are classified into two categories:

Physical Credentials: These are tangible documents that can be physically handled, such as a paper certificate or an ID card.

Digital Credentials: These are in electronic format and can be stored and shared digitally.

Verifiable credentials fall under the category of digital credentials. However, what sets them apart is that they are cryptographically secure, making them tamper-evident, and can be verified for authenticity without the need to contact the issuing authority. This adds an additional layer of trust and security to the credential.

What are Verifiable Credentials? 

Verifiable credentials (VCs) are digital credentials that are cryptographically signed, shared, and verified in a secure and tamper-evident manner. They utilize decentralized and cryptographic technologies to enable individuals and organizations to manage and share their credentials and personal information with others while maintaining privacy and control. VCs offer enhanced efficiency, speed, and security; they are not just digital versions of physical credentials. They give users control over who has access to their credentials and for how long, prioritizing privacy and consent. With VCs, users can present only the essential claims from their credentials without disclosing additional personal information. 

8 Use Cases of Verifiable Credentials 

Verifiable credentials are versatile, secure, and privacy-enhancing, making them applicable across various sectors. Here are eight key use cases:

1. Digital identity management and verification
2. Education 
3. Healthcare
4. Finance
5. Banking
6. Retail
7. Professional Credentials
8. Devices 

1. Digital Identity Management and Verification

Verifiable credentials are revolutionizing digital identity management and verification by providing a secure, convenient, and efficient way to verify an individual’s identity. They offer several advancements over traditional methods:

1. Self-Sovereign Identities: Individuals have control over their self-sovereign identities, independent of centralized authorities. These identities are portable and cryptographically signed by issuers, ensuring easy access, integrity, and security.
2. Government Issued VCs: Government agencies can issue verifiable credentials such as digital driving licenses or passports, simplifying immigration and travel processes.
3. Seamless Onboarding: Verifiable credentials enable seamless customer and employee onboarding processes.
4. Privacy Preservation: Individuals can comply with Know Your Customer (KYC) processes while safeguarding their privacy by withholding unnecessary personal information.
5. Integration with Existing Systems: Verifiable credentials seamlessly integrate with existing identity verification systems, enhancing efficiency and security.

2. Education 

In the education sector, verifiable credentials are streamlining processes and ensuring the security of digital certifications:

1. Streamlined Admissions: Simplify the admission process by reducing paperwork and enabling instant verification of applicants’ credentials.
2. Tamper-proof Digital Certifications: Issue secure and tamper-proof digital certifications and transcripts.
3. Seamless Academic Transitions: Facilitate seamless transitions between educational institutions.
4. Control Over Credential Issuance: Provide educational institutions with greater control over the issuance and revocation of credentials.
5. Secure Management of Digital Transcripts: Safely manage and share digital transcripts containing academic records, grades, skills, and other relevant information.

3. Healthcare

Verifiable credentials are transforming the healthcare system by streamlining patient identity verification and addressing the need for confidentiality:

1. Streamlined Patient Identity Verification: Streamline patient identity verification, eliminating manual processes and reducing errors.
2. Patient Control over Medical Records: Enable patients to maintain control over their medical records and selectively share information, ensuring privacy and consent.
3. Authentication of Healthcare Providers: Authenticate healthcare providers’ licenses and certificates, minimizing fraud risks and protecting patients.
4. Efficient Management of Vaccination Certificates and Immunization Records: Effectively manage vaccination certificates and immunization records. Vaccine recipients can be issued credentials to ensure the authenticity and integrity of vaccination information. These credentials can be securely shared with employers, educational institutions, or border authorities, easing travel, employment, and academic requirements.
5. Digital Prescriptions: Serve as digital prescriptions, enhancing prescription management by reducing forgery and errors. Patients can maintain their prescription credentials, facilitating easy access to their medication history and prescription refills.
6. Support for Emergency and Disaster Response: Verifiable credentials play a vital role in emergency and disaster response initiatives. Verify healthcare professionals’ identities and credentials during natural disasters and public health emergencies, enabling the efficient mobilization of resources and expertise for timely and effective emergency responses.
7. Simplified Health Insurance Claims: Simplify health insurance claims, ensuring accuracy, preventing fraud, and expediting reimbursements.

4. Finance

The financial industry is reaping the benefits of verifiable credentials by ensuring secure and transparent solutions for transactions and decentralized finance:

1. Secure Digital Wallet Solutions: Use secure and convenient digital wallet solutions to store users’ digital payment credentials. This allows for seamless and trusted transactions.
2. Simplified Cross-Border Payments and Remittances: Simplify cross-border payments and remittances through instant verification of credentials.
3. Essential for Smart Contracts and Decentralized Finance: Verifiable credentials play a crucial role in smart contracts and decentralized finance, ensuring trust and secure transactions without intermediaries.
4. Verification and Fraud Prevention: Verify the authenticity of customer information, track transactions, and detect suspicious activities in financial transactions. This helps mitigate fraud and enhance anti-money laundering (AML) measures.

5. Banking

In the banking sector, verifiable credentials are revolutionizing customer onboarding, KYC processes, and identity verification:

1. Seamless Customer Onboarding: Enable seamless customer onboarding for banks, reducing manual verification. This simplifies the account opening process, improves customer experience, and enhances fraud prevention measures.
2. Streamlined KYC Processes: Streamline Know Your Customer (KYC) processes in banking, helping banks comply with Anti-Money Laundering (AML) regulations and establish customer trust.
3. Identity Verification for Account Access and Transactions: Prove the identity of individuals for account access, transaction authorization, or remote customer interactions in banking. This helps prevent identity theft, unauthorized access, and fraudulent activities.
4. Preserving Privacy with KYC Compliance: Allow compliance with KYC processes in banking while preserving privacy.

6. Retail

The retail industry is leveraging verifiable credentials to enhance product authenticity, secure transactions, and streamline customer interactions:

1. Accurate Customer Identity Verification: Establish and verify customer identities accurately in retail transactions.
2. Enhanced Product Authenticity and Supply Chain Transparency: Improve product authenticity and supply chain transparency in retail. Products are assigned credentials containing information such as origin, manufacturing processes, certifications, and quality assurance details. This enables customers to verify the authenticity and integrity of products, supporting ethical sourcing, combating counterfeiting, and ensuring consumer trust.
3. Secure and Efficient Age Verification: Enable secure and efficient age verification for age-restricted retail transactions.
4. Digital Proof of Purchase: Serve as digital proof of purchase, allowing credentials to be securely shared with retailers. This simplifies returns, enables targeted loyalty rewards, and provides a seamless omnichannel shopping experience.
5. Streamlined Warranty Management and After-Sales Services: Simplify warranty management and after-sales services for retailers.
6. Facilitated Product Recalls and Safety Alerts: Facilitate product recalls and safety alerts in retail. Notifications about recalls, safety alerts, or updates can be sent using credentials.

7. Professional Credentials

Verifiable credentials are transforming the issuance, management, and verification of professional credentials:

1. Secure Management and Verification of Professional Licenses and Accreditations: Enable secure management and verification of professional licenses and accreditations. Digital credentials issued by licensing bodies and professional associations validate an individual’s professional qualifications, licenses, and compliance with industry standards. These credentials can also be revoked when necessary.
2. Simplified Verification of Academic Degrees and Certifications: Simplify the verification of academic degrees and certifications. Educational institutions can issue digital credentials that contain verified information about a person’s educational achievements, including degrees earned, areas of study, and academic honors.
3. Fraud Reduction and Public Protection: Reflect revocations of licenses or credentials by issuing authorities in the verified credentials, helping reduce fraud and protect the general public.
4. Digital Resumes and Portfolios: Enable the creation of digital resumes and portfolios that showcase professional achievements, employment history, and skill information. These credentials can be easily shared with potential employers, streamlining the hiring process and facilitating accurate evaluation of candidates’ qualifications.
5. Support for Remote Work and Distributed Teams: Provide a reliable way to verify remote employees’ qualifications and skills, supporting remote work and distributed teams.
6. Establishing Professional Reputation: Professionals can establish their reputation through endorsements, client feedback, or performance evaluations embedded with trust attributes.

8. Devices

The world of connected devices is being secured and streamlined through the use of verifiable credentials:

1. Secure Device Identity and Authentication: Enable secure device identity and authentication using unique digital credentials that contain relevant information such as firmware version, configuration details, or access permissions.
2. Fine-Grained Access Control and Authorization: Enable fine-grained access control and authorization for devices. VCs can be used to manage permissions and control device interactions within a network or ecosystem. Device owners can define access policies, grant or revoke permissions, and enforce secure communication protocols to ensure authorized and controlled device interactions.
3. Secure Firmware and Software Updates: Facilitate secure firmware and software updates for devices. VCs ensure that only authorized updates are installed, protecting against malicious firmware or software modifications.
4. Simplified Device Ownership Transfer: Simplify device ownership transfer processes using VCs. VCs can serve as proof of ownership, transfer of ownership agreements, or warranty details. By securely sharing these credentials, device owners can transfer device ownership while ensuring transparency, authenticity, and proper documentation.

Conclusion

Verifiable credentials are transforming how we establish trust, manage identities, and authenticate information in a digital world. With its ability to enable self-sovereign identity and revolutionize industries like education, healthcare, and supply chain management, this technology offers countless possibilities. In an increasingly interconnected world, verifiable credentials can enhance security, streamline processes, and foster trust. Utilize this technology to stay at the forefront of innovation and secure digital interactions in your industry.

Identity.com

In the 21st century, verifying a user’s identity and the authenticity of their credentials has become increasingly urgent and crucial. Building on the decentralized ecosystem framework, verifiable credentials are revolutionizing existing structures and offering new solutions. It’s exciting to see Identity.com playing a role in shaping this desired future. Also, we are a member of the World Wide Web Consortium (W3C), the standards body for the World Wide Web.

The work of Identity.com as a future-oriented company is helping many businesses by giving their customers a hassle-free identity verification process. Identity.com is an open-source ecosystem providing access to on-chain and secure identity verification. Our solutions improve the user experience and reduce onboarding friction through reusable and interoperable gateway passes. Please refer to our FAQs page for more information about Identity.com and how we can help you with identity verification and general KYC processes.