# Verifiable Credentials

# What Are Credentials?

Credentials serve as evidence of a person’s achievements, qualifications, experience, or other relevant aspects of their life. A typical physical credential includes details such as:

1. A description of the owner or subject of the credential, such as a name, photograph, identification number, etc.
2. Details, trademarks, or symbols of the issuing authority, such as the U.S. great seal, state government symbols, government agencies’ logos, health centers’ logos’ and educational institutions’ trademarks.
3. Specific information the credential carries, such as a health insurance card, an international passport, a receipt or proof of house ownership, or a driver’s license.
4. The way in which a credential, such as a university graduation certificate, was obtained provides information on whether the student has completed the required number of years for the course.
5. Evidence of grade or rating, such as students that graduated with first class, second class upper or lower according to the U.K. grading system, a student awarded with the tag of “best graduating student,” best performing actor, doctor, governor, mayor, etc.
6. Credentials’ limitations or constraints, such as expiration dates, conditions for validity, or terms of use.

To comprehend the concept of verifiable credentials, we must establish a foundation of what credentials are. The examples provided above illustrate the diverse information that can be found within a credential. Verified credentials, as we will explore, go beyond the traditional format to facilitate secure and efficient transfer and verification processes.

# What Are Verifiable Credentials (VCs)?

Verifiable Credentials (VCs) are digital credentials that are digitally signed and cryptographically secured to ensure tamper-evident properties. They go far beyond just digital versions of physical credentials by offering vastly improved efficiency, speed, and security in issuance and verification.

With verifiable credentials, new credentials can be generated and issued immediately and then presented by holders to organizations or individuals for verification. A major advantage verifiable credentials have over traditional credentials is the increased privacy protections they provide. Users can selectively disclose only necessary information or claims without revealing additional personal details.

For example, rather than having to submit a physical or scanned copy of a graduation certificate to prove attendance at Harvard University, users can simply provide a verified “Yes” or “No” response to the verifier. The verifier can then instantly check this credential directly with Harvard using their digital signature based on public key cryptography.

# Digital Wallet vs. Digital ID Wallet

A digital wallet serves as a secure electronic tool that allows users to store payment methods like credit cards, bank account details, and even digital currency. It simplifies online purchases and transactions by quickly providing payment information without the need for manual entry.

On the other hand, a Digital ID Wallet is designed primarily to securely store and manage a user’s digital identity credentials. This can include digital versions of driver’s licenses, insurance cards, membership cards, and other personal identification documents. Enhanced by blockchain technology, digital ID wallets offer a secure means for users to present digital identification during interactions that require identity verification. Issuers can also utilize digital ID wallets to present verifiable credentials. They leverage cryptography and their public keys to ensure authenticity and security.

# The Verifiable Credentials Ecosystem

Both traditional credential issuance and VC ecosystems involve three parties: the issuer, the holder, and the verifier. Communication between these entities is essential to verify a user’s credentials during presentation. Let’s take a closer look at the roles of these three entities:

1. Issuer

The issuer, which can be a school, healthcare center, bank, company, government agency, or an individual, is responsible for issuing credentials to users. For example, a university issuing graduation certificates to students serves as the issuer. Issuers employ various methods to demonstrate their competence and authority to issue credentials.

2. Holder

The holder is the recipient of the credentials issued by the issuer. In the example mentioned earlier, each student receiving a certificate from the university would be a holder. Holders have full control over with whom they share their credentials and can revoke access from previously shared parties. They can store their issued credentials in a digital wallet on their mobile device or back them up online or on the cloud.

3. Verifier

The verifier completes the communication circle within the VC ecosystem. When a holder presents their credentials to a verifier who requests verification, the verifier confirms the authenticity of the credentials through cryptographic communication with the issuer. Public-key cryptography enables the verifier to detect alterations, verify validity, or check expiration dates within seconds.

# The Role of Decentralized Identifiers (DIDs) in Verifiable Credentials

Decentralized Identifiers (DIDs) play a crucial role in verifiable credentials. DIDs leverage digital signatures and other web 3.0 components to publicly identify and verify users or entities in a decentralized manner. Decentralized identifiers are unique global identifiers built on decentralized blockchain technology, in contrast to the centralized registries commonly used today.

DIDs serve as a means to establish and prove the identity of entities involved in verifiable credentials. Entities utilize private keys to cryptographically bind their identity to each credential they issue or hold. DIDs provide a unique technology that verifies the identity claims of any entity, whether it’s the issuer, holder, or verifier. Moreover, the verifier can utilize the public key during verification to attest to the authenticity of the verifiable credentials submitted by the holder.

Please click here to learn more about the importance of decentralized identifiers (DIDs) within the World Wide Web Consortium (W3C).

Source: https://www.identity.com/what-are-verifiable-credentials/

More information on W3C website: https://www.w3.org/TR/vc-data-model/