IoT chain defines data sovereignty as the right for users to control their data assets. It is important to distinguish data assets from digital assets. Many of us are familiar with digital assets such as Bitcoin, Ethereum, EOS, and other virtual currencies. Traditional bank account balances can also be classified as digital assets. Compared to digital assets, data assets have the following unique characteristics.
1. Difficult to transfer
Unlike data assets, digital assets can be transferred. If party A transfers Bitcoin to party B, A loses control over that amount of Bitcoin. But with data assets, data can be overwritten and is difficult to transfer effectively. After the data has been reconstructed, the same data is often owned by both parties.
2. Continuous production of data assets
Our data assets are like a mine. As long as we are using Internet services, the amount of data tied to us will increase and become more valuable. Likewise with connected IoT devices; as long as they are operating, they are creating more data.
3. The value of data assets is reflected in use
Digital assets, such as Bitcoin, are valuable in themselves. The value of data needs to be reflected when it is used. For example, during advertising-directed activities, loan credit inquiries, and AI model training.
Therefore, data assets should be assets that belong to users— growing and constantly generating value. Unfortunately, this is not the status quo, largely in part because big companies have seized control of the data asset market. Decentralized identify is the key to breaking the data monopoly.
Distributed Identity vs Centralized Identity
Traditionally, identity information is centrally stored on servers that provide access to services such as email. These servers hold account usernames and passwords, as well as various other data related to the account. The administrators of these services have complete control over the server; users do not have control over their identity information.
In a distributed identity, no login or password is required, and the user controls their identity by holding their private key. The service provider does not store the user's password; it only records the user ID, similar to a public key and private key scenario.
Distributed identities allow privacy to be better protected. In a centralized identity system, service providers use user data at their discretion, and use this data to generate revenue without the user's knowledge or authorization.
In a distributed identity system, users can manage their own data in many different applications and services, breaking down data silos, and building a complete digital identity. Users can enjoy more accurate and efficient Internet services.
Interestingly, with the advent of the Internet of Things, we will also digitize data in new and exciting ways. Eventually, user data will not only be in the virtual world, but all of our real-world data will also be digitized. Users' demand for privacy and data protection will increase tremendously. The centralized identity systems are no longer meeting the needs of their users. We believe that distributed identity will be the bridge to link the physical world and the virtual world. During the next digital revolution, we will distribute control of your own identity data, allowing you to bring your data to any service provider. We will no longer be constrained to use centralized services for identity; we will give control back to the users. With the rise of edge computing, the computing power of the edge is increasing, and with it we can do a better job of protecting and processing data privacy before user data flows to the service.
Microsoft has put forward a concept of Decentralized Digital Identities, which continues to improve the distributed digital identity solution for the Internet of Things. In the era of the Internet of Things, we are gradually returning user data assets back to the users.
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