In February 2018 Microsoft unveiled the full scope and details around its distributed ledger technology (DLT)-based plan.

While many were expecting a broad series of products and services, the digital identity solution struck a chord with most industry insiders.

Microsoft reported that blockchain technology allows hosting decentralized IDs (DID) on top of the distributed ledgers. This, in turn, would serve as the cornerstone for what would become a major initiative by the tech giant.

Ankur Patel, principal program manager at Microsoft Identity Division, wrote at the time: “With data breaches and identity theft becoming more sophisticated and frequent, users need a way to take ownership of their identity. After examining decentralized storage systems, consensus protocols, blockchains, and a variety of emerging standards we believe blockchain technology and protocols are well suited for enabling Decentralized IDs. […] We need a secure encrypted digital hub (ID Hubs) that can interact with user’s data while honoring user privacy and control.”

The project is an open source implementation, called Ion. As a protocol, it’s designed that others can build and expand on top of it.

For example, if you log onto Airbnb using Facebook, a protocol deals with the software that sends the personal information from your social profile to that external service provider. In this case, Ion handles the decentralized identifiers, which control the ability to prove you own the keys to this data. Christopher Allen, a crypto veteran and the co-founder of the World Wide Web Consortium (W3C) working group for decentralized identity (DID) solutions said that Microsoft’s move could impact the entire tech industry. “A lot of enterprise infrastructures use Microsoft products,” Allen said. “So if they integrate this into any of their infrastructure products, they’ll have access to DID.”

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