I go back and forth between thinking decentralization is inevitable and thinking it's just too hard. Lately, I'm optimistic because I think there's a good answer for one of the sticking points in building decentralized systems: decentralized identity.

Most interesting systems have an identity component. As Joe Andrieu says, "Identity is how we keep track of people and things and, in turn, how they keep track of us." The identity component is responsible for managing the identifiers and attributes that the system needs to function, authenticating the party making a request, and determining whether that party is authorized to make the request. But building an identity system that is usable, secure, maximizes privacy is difficult—much harder than most people realize.

The problem with decentralized identity is even more acute. Discovery is one of the key features of an identity system. And decentralized discovery is hard. Say, for example, that I have an identifier and need an associated attribute, a public key, for example. In a centralized identity system, there would be a database somewhere that associated identifiers with public keys. Make a query on the database with the identifier and I get back the key. Easy.

But doing discovery without a central database has been hard. Lack of decentralized discovery has made otherwise decentralized systems susceptible to denial of service attacks, insecure, or slow and inefficient.

Distributed ledgers—blockchains—promise to solve this by providing decentralized discovery that is secure and efficient. But just having a blockchain isn't enough. Decentralized identity might start with a distributed ledger, but making a system that is private, secure, and useful requires much more. Blockchains help with discovery, but you still have to worry about how to make key management and attribute exchange secure and private.

Having a global utility for identity solves this problem in a way everyone from the lone developer to the small startup to the global enterprise can take advantage of. In Fat Protocols, Joel Monegro argues:

[B]y replicating and storing user data across an open and decentralized network rather than individual applications controlling access to disparate silos of information, we reduce the barriers to entry for new players and create a more vibrant and competitive ecosystem of products and services on top.

Emerging blockchain-based identity systems are protocols for identity. As Joel says, this means that the applications riding on top of these identity protocols can offer more with less effort. For example, I've argued elsewhere that sharing economy companies like Lyft and AirBnB are based on identity platforms that allow for an exchange of trust. And that having a universal platform that allows anyone to do this accelerates the pace at which these kinds of services could be offered.

But more importantly, a universal, decentralized identity platform offers the opporunity for services to be decentralized. In the physical world, people start businesses all the time without some kind of platform. I lease a storefront, figure out how to get inventory, and my storefront can be up and running. I don't have to be a sharecropper for some large corporation. As an example, I can imagine a universal, decentralized identity system giving rise to apps that let anyone share rides in their car without the overhead of a Lyft or Uber because the identity system would let others vouch for the driver and the passenger.

The need for decentralized thinking has never been more acute. As I wrote in The CompuServe of Things:

My point isn't a narrow technical one. I'm not arguing for an open Internet of Things because of perceived technical benefits. Rather, this is about personal autonomy and ultimately human rights. As I said above, the Internet of Things will put computers with connectivity into everything. And I really mean "every thing." They will intermediate every aspect of our lives. Our autonomy and freedom as humans depend on how we build the Internet of Things. Unless we put these connected things under the control of the individuals they serve without an intervening administrative authority, we will end up building something that undermines the quality of life it's meant to bolster.

The emergence of a decentralized identity platform gives me hope that we can build online systems that respect human dignity. Back to Joe Andrieu:

When we build interconnected systems without a core understanding of identity, we risk inadvertently compromising human dignity. We risk accidentally building systems that deny self-expression, place individuals in harm’s way, and unintentionally oppress those most in need of self-determination.