This is the age of digital evolution, one thing that matters more than anything today is the data. The data we create,store, share and use are the way transactions happen in the world. But no matter how seamless data has made our operations online, the risk of data theft and other cybercrimes is immense.

One of the reasons why decentralized identifiers (DIDs) have become paramount is they ensure security and reliability of data. They have emerged as a promising solution to deal with the concerns of data in centralized identity systems.

But similar to any technology, DIDs are not just sunshines and rainbows, they come with their own set of limitations. Understanding these confinements will help you navigate the world of DIDs in the most optimized way possible.

Let’s get on the journey to know about what limits DIDs and how they can be addressed.

Complexity in Implementation

Self-sovereign identities, that’s what DIDs are all about as they help create and manage the same. This means there is no involvement of intermediaries, making processes easy to go through with better ownership of data.

Despite this impressive perk, a decentralized identity system can be complex to implement. The problem can only persist if the organization has limited technical expertise.

The requirement for fully understanding benchmarks such as key management, cryptographic protocols and interoperability standards makes the process of implementation more tough. As these knowledge are known to everyone and thus demands for hiring specialized skill set of people.

However, not every organization can afford to hire such a talent pool. The best way to overcome this? Leverage the platforms and frameworks that are designed to offer simplified tools or API integration for DID management.

Scalability Issues

Despite the limitations, there’s no denying that DID has gained traction and an increasing number of entities are leaning to adopt decentralized identity solutions.

But with that being said, scalability emerges as a grave concern or rather we could say a sore limitation. Unlike traditional centralized systems, decentralized systems struggle to handle millions of identity transactions per second. This is due to the distributed mechanism of operation.

In order to boost scalability, several key areas require improvements such as blockchain technologies, network infrastructures and consensus algorithms. But maybe, this limitation of DID may not stick around too long. 

Big projects like Ethereum 2.0 and Polkadot are researching and exploring solutions such as sharding and parallel processing to boost scalability without having to compromise on its decentralized nature.

Interoperability Supporting Standards

The success of DIDs is latched with the establishment of interoperability between varied identity systems and protocols. But, achieving interoperability is easier said than done. Why?

It is mainly because of the lack of standardized protocols and government frameworks. The problem only persists when varied blockchain platforms or identity providers use incompatible protocols or proprietary that tends to hinder data exchange and seamless integration.

To successfully overcome the interoperability concern, the global decentralized identity community must be unified and make collaborative efforts. For example, organizations such as the World Wide Web Consortium (W3C), Decentralized Identity Foundation (DIF) and more are working towards defining common standards and specifications for DIDs and related solutions.

Regulations & Legal Framework

The regulatory and legal landscape is still in the nascent and evolving stage when it comes to decentralized identifiers. There are many areas where there compliance emerges as major obstacles for organizations who are looking to deploy DIDs in global markets or regulated industries. Some of these are –

  • Digital identity standards
  • Data protection regulations
  • Cross-border data transfers

KYC or Know Your Customer and Anti-Money Laundering regulations have mandatory obligations to establish robust identity verification processes. This raises the intimidating questions about the integration of decentralized identity solutions with KYC providers and regulatory reporting systems.

User Adoption and Education

But technological limitations are not the only obstacles that surround decentralized identifiers. User acceptance and understanding is a critical concern that slows down the deployment of DIDs.

Despite their impressive attributes and plethora of perks they offer, DIDs are still not a familiar concept. This leads to adoption barriers and misconceptions surrounding DIDs. One of the concerns that poses a major challenge is the complexity of this concept and the struggle non-technical users have to understand it.

Without a technical background, the terms associated with DIDs are just like hieroglyphs to the non-tech savvy users. Therefore, it becomes a critical objective for the decentralized industry to fill this gap.

More educational initiatives and user-friendly interfaces must come into existence. 

Bottom Line

While the limitations related to DIDs stick out like a sore thumb that doesn’t mean they will remain like that for the long-term. There are game-changing companies working towards making DIDs more accessible, user-friendly, simplified and compliant.

Organizations big or small are making their contributions to enhanced DID deployment and adoption. ProofEasy is one such pioneering company that deals with the concept of DIDs to offer solutions that are meant to keep documents secure, transparent and verifiable.

Learn more about them and what they offer in the decentralized identity world.