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MicroStrategy announced the development of a decentralized identity solution on the Bitcoin blockchain. The protocol, dubbed MicroStrategy Orange, adopts a Bitcoin registration DID method, similar to the ordinals technique, to manage decentralized identifiers (DIDs) using unspent transaction outputs (UTXOs) for control. Michael Saylor, co-founder and executive chairman of the company, revealed the innovation at the Bitcoin For Corporations conference on May 1.
“The Bitcoin Registration DID (did:btc) method uses the Bitcoin blockchain exclusively to store and retrieve DID information. On-chain UTXOs are used to control DIDs. “Writing data to the transaction witness allows for greater scalability and verbosity when creating DID documents, while reducing fees and block space consumed,” as discussed in a draft of a potential specification (the document) of the new solution on MicroStrategy GitHub.
According to Saylor, MicroStrategy Orange is an open source initiative that does not rely on sidechains and is capable of processing up to 10,000 DIDs in a single Bitcoin transaction. The system aims to simplify the adoption of DIDs for organizations and individuals, providing a way to manage online identities in a secure and pseudonymous manner.
“The goal of this method is to provide trustless, tamper-proof and durable decentralized identities using only the public Bitcoin blockchain as a data source, while allowing full compatibility with the specification (DID-CORE) and backward compatibility for future expansions,” the document states.
DIDs provide a pseudonymous way to manage online identities, separate from real-world identities, thereby improving privacy. The MicroStrategy Orange suite includes the Orange service allowing organizations to issue DIDs, the Orange SDK for developers and Orange applications such as “Orange For Outlook” for digitally signing emails.
The onboarding process involves an invitation from an organization, creating a DID, and listing on the Bitcoin blockchain, ensuring that the data is permanent and tamper-proof.
According to Cezary Raczko, MicroStrategy's executive vice president of engineering, MicroStrategy Orange's vision is to integrate DIDs on Bitcoin into a broader “verifiable credentials ecosystem.”
In other words, anyone can verify the authenticity of these credentials across various applications without relying on a central authority. Verification would be done by checking information on the Bitcoin blockchain, known for its immutability and security.
DIDs could be used to verify user identities on social media platforms, potentially enabling a more secure, user-controlled and decentralized way of issuing and verifying credentials, Raczko highlighted a case of potential use of the new protocol.
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