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Microsoft Azure announces blockchain based identity system


On May 13th, Microsoft’s cloud platform Azure released a preview of their decentralized identity (DID) network. The Identity Overlay Network (ION), running on the Bitcoin blockchain, can be used by anyone to create and manage identities.

The ION is being developed as part of Microsoft’s aim to provide secure DIDs which enhance privacy and control rather than relying on email addresses or usernames. Other Microsoft’s DID efforts, such as Identity Hubs which are blockchain based, are too slow for real-world use.

Today’s announcement introduces ION, which aims to address the issue of scalability of DID networks. Microsoft hopes that ION will be powerful enough to become a global identity ecosystem.

ION is based on the Sidetree protocol, which was created through a collaboration with members of the Decentralized Identity Foundation (DIF), particularly with ConsenSys and Transmute. Other DIF members include HyperLedger, IBM, and Sovrin.

Sidetree addresses the issue of scalability by eliminating the consensus needed for transactions. This potentially makes operations on the blockchain thousands of times faster.

“Unlike monetary units and asset tokens, IDs are not intended to be exchanged and traded”, explains Daniel Buchner, a Senior Program Manager at Microsoft’s Identity Division. ION runs ‘above’ Bitcoin’s blockchain, using its cryptographically secure structure but without the slow transaction process.

Buchner continues: “while blockchains unlock the ability to create highly secure, censorship resistant identity systems, their transactional volumes are severely limited when compared to traditional systems.

“To tackle this challenge, we’ve been collaborating with members of the DIF, notably ConsenSys and Transmute, to develop a blockchain-agnostic protocol for creating scalable DID networks, called Sidetree.”

In the early stages of development, the underlying code is open source, with Azure encouraging developers to test and contribute to their new system. ION already has participating tech firms such as Equinix, Casa, Learning Machine, Civic, and Cloudflare.