Payment and credential network cheqd has unveiled a new product designed to balance data monetization with privacy preservation. Credential Payments aims to achieve these goals through a combination of on- and off-chain sources. The new product from cheqd, which slots into its existing Credential Service, extends the capabilities of Self-Sovereign Identity (SSI).
SSI describes the various decentralized components that, when combined, can provide a full stack solution for digital ID, authentication, and verification. This provides a secure alternative to incumbent solutions, whose reliance on centralized databases has fueled the black market in stolen identities, which are attractive to carders, phishers, and other scammers.
cheqd is one of numerous companies leveraging decentralized technologies to create secure alternatives. In Credential Payments, it believes it’s found a way to facilitate a two-way market for identity data without exposing the underlying data.
Trusted data in a trustless setting
One of the challenges for developers of decentralized identities is convincing businesses operating on the centralized web to integrate them. This is cheqd’s speciality. The startup has created a suite of products and tools that slot into existing network and payment systems, allowing businesses to capitalize on the advantages of SSI without having to rebuild their existing infrastructure.
Credential Payments will fit into this stack, adding the ability for businesses to trade trusted data onchain, without the need for the data itself to be placed onchain for the buyer to take receipt of it. Moreover, because this trusted data is verifiable, its integrity can be proven without violating its privacy guarantees.
As for how this works in practice, it means an organization could generate revenue from monetizing credentials that it has verified. Essentially, a digital identity could be reused elsewhere, without the individual needing to undergo fresh KYC verification. The initial entity that has conducted this check, meanwhile, can recoup some of the initial cost through sharing this trusted data with a secondary organization with the user’s permission.
A lucrative market to master
SSI is a valuable market, with predictions that it could eventually reach $500 billion in value. No wonder, then, that early champions of the technology have been endeavoring to plant their flag. cheqd has developed a name in the fledgling space after sealing partnerships with multiple SSI application vendors. With Credential Payments, the startup hopes it has found one of the most compelling use cases yet for decentralized identities.
Aside from customer verification data, cheqd’s latest product has the potential to be used within the education sector. Here, it would support a market for credential verification, with entities paying to check a list of trusted issuer identifiers, ensuring that degrees and other credentials were legitimate.
As web3 evolves, and fuses with existing web2 infrastructure, the challenge of issuing reusable KYC and other trusted data onchain will come into sharp focus. Businesses navigating the space have to balance their legal and regulatory obligations with the needs of users, whose privacy must be taken into account. Companies such as cheqd are leading the movement to mainstream trusted data, supporting a thriving economy in which all participants benefit.
Featured image credit: Scott Graham / Unsplash
