Something’s up. Everyone knows it. The world is in the midst of a transformation, socioeconomically, politically, and technologically… most of us can’t quite define it yet, but it is obvious that we are in an era of change that is affecting all of our lives.

One of the major areas of this change is our identity. The basic structure of our identities, who defines them, and who owns them are being disrupted through technological and social changes. Blockchain technology is allowing us to reclaim and own parts of our identity that up until recently were defined and owned by others (governments, corporations, and other organizations) that leveraged their power to collect social and financial advantages. By rebuilding the global identity system from the ground up in a decentralized fashion, individuals can control their identities, move around with their corresponding identifiers and use them wherever needed, without relying on anyone else. Redefining identity ownership will redefine the power structures in society.

If I asked you to prove to me that you are who you claim you are, what would you show me?

You could show me your government-issued IDs (social security number, passport, driver's license). You could show me a company-issued identifier (e-mail address, FB/Twitter/LinkedIn handle). You could show me an asset you own (home address, phone number). You can show me a biometric identifier (face, DNA, fingerprint, retina). Or you could have others (family, friends, your lawyer) vouch that you are who you claim you are, either based on your biometrics (your picture, physical presence) or based on some other information you mutually know.

Not all these identifiers are the same. Some of them are your assets and some of them are your rights. Your government-issued ID, the unique company identifier, or the listing of your asset is a registry in someone’s ledger that is dependent on the security (and ones standing within) of that institution. They give you the right to access that information. A right that if they want, they can cancel and that in most cases you need to pay for (with money, freedom or other assets). Your biometrics are yours; no one can take them away from you; however, they are limited only to the physical world. Once you connect them to a digital identifier, then that connection between the physical and the digital needs to sit somewhere, and most likely that connection will be owned by someone that isn’t you and that you need to pay to use.

How we present ourselves to the world and how others identify us, is a basic building block of human society. To co-operate and build a functioning society we need to know who is in front of us and if we can trust them. For centuries (if not millennia) people have had very little ownership over their identity. They relied on governments, corporations, and other institutions to define and own their identities in ledgers and databases. These organizations leased people’s identities back to them so that they can use them in their day to day in the form of passports, IDs, or usernames. They told us what we are allowed to say about ourselves and what is acceptable by defining the standards of identity. In return for this lease, people paid a fee, gave up their sovereignty, and limited their freedoms. The owner of the asset had enormous power.

The evolution of the blockchain, and more specifically, decentralized identities are allowing us to reclaim our identities back and turn them from a right into an asset. The core technology of the blockchain allows us to write a registration in a ledger, that anyone can trust, but without needing to put your trust in a central entity with interests that often are different than yours. The registration in the ledger is the asset of the person who is listed, and no one can change it without going through a pre-defined mechanism. This is a simplified description of the blockchain, and there are many derivatives of these chains with different balances between security, trust, and efficiency. There is also the very big question of how you connect this digital identifier to a real-world person and how people won’t just trade in their identities or steal them from one another. But at the conceptual level, the blockchain allows you to own a digital asset directly without relying on a 3rd party-controlled system. This is a massive change that is still under-appreciated.

This change of identity from a right to an asset will have huge impacts on society and on the power structure between states, corporations, and individuals. This piece is long enough, so I’ll stop here but in a few days we will publish Part II of this piece with thoughts on the practical implications of this change and how we think it will affect all our lives (Teaser: think of how it changes work visas and working in a global economy, global travel, a global tax system, personal accountability etc.). Stay tuned.