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5 guiding principles for decentralized identities

Microsoft | Alex Simons  | Oct 6, 2021

Guiding principles decentralized identities - 5 guiding principles for decentralized identitiesThree years ago, as part of Microsoft’s mission to empower people and organizations to achieve more, we announced that we were incubating a new set of decentralized identity technologies based on a simple vision:

Each of us needs a digital identity we own, one which securely and privately stores all elements of our digital identity. This self-owned identity must be easy to use and give us complete control over how our identity data is accessed and used.

During this incubation, customers and partners all around the world have helped us understand their challenges and the shortcomings of their existing identity systems. We’ve learned a ton through a set of successful proof of concepts partnering with Keio University,1 The National Health Service (UK),2 and the Government of Flanders.3 We’ve worked with our partners in the Decentralized Identity Foundation (DIF) and the open standards community to develop standards and demonstrate interoperability.

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Using these new open standards and all these learnings to guide us, we turned on the public preview of our new decentralized identity systemMicrosoft Azure Active Directory Verifiable Credentials—in April 2021. That preview generated a ton of valuable feedback and gave us the opportunity to learn from all of you.

Through all these interactions and investments, we have become even more excited about the opportunity to create a decentralized identity system that increases customer trust and adoption by minimizing data processing and providing the user much greater control of the specific identity data they share and how it will be used.

The 5 guiding principles

In this new phase, we want to share the set of guiding principles that we will use to guide both efforts. Not all these principles will be realizable from the start, but we believe that all are necessary over time to realize the promise of decentralized identities:

1. Secure, reliable, and trustworthy

  • My digital identity must be secure. It must not be easy to forge or hack. No one must be able to use it to impersonate me.
  • I must always have a way to access, use, and securely recover my digital identity.
  • I must have access to a detailed log of all the times I’ve used my digital identity, who I used it with, and what it was used for.

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2. Privacy protecting and in my control

  • My digital identity is under my control. It must only be used with my consent and when I consent; I must know who will use it and how it will be used.
  • I must be able to review which elements of my digital identity are being requested and I must have the option to only disclose the specific information necessary to support the consented use.
  • My use of my digital identity must be private. No one, other than the party I explicitly share it with, should know I am using it without my consent.
  • My digital identity must not be able to be used to track me across unrelated services or applications without my consent.
  • I must have the freedom to switch between the devices and applications of my choosing to manage my digital identity, and never be locked in.
  • I must be able to delete all aspects of my digital identity and any associated data and log files from wherever I choose to store them.

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NCFA Jan 2018 resize - 5 guiding principles for decentralized identities The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit:

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