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Verifiable Credentials Explained in Simple Terms

Verifiable Credentials Explained in Simple Terms

Verified Credentials
May 03, 2025

Imagine you have a digital version of your ID card, diploma, or even a concert ticket that you can store on your phone. A Verifiable Credential (VC) is like a digital document that proves something about you—like your age, qualifications, or membership—without needing to show a physical card or share extra personal details.

Here’s how it works in everyday life:

Trusted Proof: A VC is issued by someone trustworthy, like a university for a degree or a government for a driver’s license. It’s digitally signed, so no one can fake it.
Privacy Control: You decide what to share. For example, if a bar needs to know you’re over 21, you can show just your age from your VC without revealing your name or address.
Easy to Use: You can share VCs instantly online or in person (via QR codes), and the receiver can verify them quickly without contacting the issuer.
Secure and Portable: VCs live in a digital wallet on your phone, protected by encryption, so they’re safe and always with you.

Think of VCs as digital versions of your credentials that are secure, private, and easy to share only when you want to. They’re used for things like proving your identity online, verifying your education, or even accessing services without oversharing personal info.

Verifiable Credentials Explained in Technical Terms

A Verifiable Credential (VC) is a standardized, cryptographically secure data structure used to represent claims about a subject (e.g., a person, organization, or device) in a tamper-evident and privacy-preserving manner. VCs are a core component of decentralized identity systems, aligned with the W3C Verifiable Credentials Data Model and often used with Decentralized Identifiers (DIDs) and Self-Sovereign Identity (SSI) frameworks.

Key Components of Verifiable Credentials

Credential Structure:

A VC is a JSON or JSON-LD document containing:
- Metadata: Information about the credential (e.g., issuer, issuance date, expiration).
- Claims: Assertions about the subject (e.g., “Alice has a Bachelor’s degree”).
- Proofs: Cryptographic signatures (e.g., ECDSA, EdDSA) or zero-knowledge proofs (ZKPs) to ensure authenticity and integrity.

Example:

{
  "@context": ["https://www.w3.org/2018/credentials/v1"],
  "id": "urn:uuid:1234-5678",
  "type": ["VerifiableCredential", "EducationCredential"],
  "issuer": "did:example:university123",
  "issuanceDate": "2023-01-01T00:00:00Z",
  "credentialSubject": {
    "id": "did:example:alice",
    "degree": {
      "type": "BachelorDegree",
      "name": "Computer Science"
    }
  },
  "proof": {
    "type": "Ed25519Signature2020",
    "created": "2023-01-01T00:00:00Z",
    "proofValue": "..."
  }
}

Decentralized Identifiers (DIDs):
- DIDs are unique, self-controlled identifiers (e.g., did:ethr:0x123...) registered on a blockchain or distributed ledger. They identify the issuer, subject, or verifier without relying on a central authority.
- DIDs resolve to DID Documents, which contain public keys and service endpoints for verification.
Cryptographic Verification:
- VCs are signed using the issuer’s private key, allowing verifiers to check the signature against the issuer’s public key (retrieved via the DID).
- Advanced implementations use Zero-Knowledge Proofs (ZKPs) to enable selective disclosure, where the subject proves specific claims (e.g., “I’m over 18”) without revealing the full credential.
Digital Wallets:
- VCs are stored in a user’s digital wallet (e.g., mobile apps like uPort or Trinsic), which manages DIDs, credentials, and cryptographic keys.
- Wallets facilitate sharing via protocols like DIDComm or QR codes.

Workflow of Verifiable Credentials

Issuance: An issuer (e.g., a university) creates a VC, signs it with their private key, and sends it to the subject’s DID or wallet.
Storage: The subject stores the VC in their digital wallet, controlling access via their private key.
Presentation: The subject creates a Verifiable Presentation (a signed wrapper around one or more VCs) and shares it with a verifier (e.g., an employer).
Verification: The verifier checks:
- The issuer’s signature using the public key from the issuer’s DID.
- The credential’s integrity (no tampering).
- Optional revocation status (e.g., via a blockchain-based revocation registry).
- If ZKPs are used, the verifier confirms the proof without accessing the full data.

Standards and Interoperability

W3C VC Data Model: Defines the structure and semantics of VCs.
DID Specifications: Governs DIDs across methods (e.g., did:ethr, did:key).
Interoperability Frameworks: Organizations like the Decentralized Identity Foundation (DIF) and Trust over IP (ToIP) ensure VCs work across ecosystems.
Protocols: DIDComm, OpenID Connect for VCs, and Hyperledger Aries enable secure exchange.

Use Cases

Identity Verification: Privacy-preserving KYC for banking using selective disclosure.
Education Credentials: Digitally signed degrees or certifications (e.g., EveryCRED).
Professional Licenses: Verifiable medical or legal licenses.
Access Control: VCs for event tickets or secure facility access.
Supply Chain: Proof of product authenticity or compliance.

Benefits

Privacy: Selective disclosure and ZKPs minimize data exposure.
Security: Cryptographic signatures prevent forgery.
Decentralization: No reliance on central authorities, reducing single points of failure.
Interoperability: Standards ensure VCs work across platforms.

Challenges

Scalability: Blockchain-based DIDs may face transaction cost or latency issues.
Adoption: Requires ecosystem buy-in from issuers, verifiers, and users.
User Experience: Managing digital wallets and keys can be complex for non-technical users.
Regulatory Compliance: Aligning with frameworks like eIDAS or GDPR.

In summary, VCs are a cryptographically secure, decentralized way to represent and share verified claims, enabling trust and privacy in digital interactions. They combine standardized dat

Until next time,
Verified Credentials