The current identity verification system is broken. Several incidents in the past year have proven the danger of using outdated systems. In these systems, consumers are forced to repeatedly share the same core identifiers, such as Social Security numbers, birth dates, and biometrics, across countless digital platforms.
In October 2023, a breach exposed genetic and ancestry data from nearly seven million users. This data included names, birth years, and locations. Months later, hackers infiltrated customer environments, compromising sensitive records from companies like AT&T and Ticketmaster. In August 2024, a report stated that 2.9 billion records had been stolen, potentially putting every American’s personal information, including Social Security numbers, in the hands of bad actors.
These incidents are symptoms of a more significant problem. The more personal data circulates in its raw, reusable form, the more risk there is, not just in financial loss but also in privacy, trust, and individual autonomy. Traditional cybersecurity approaches cannot keep up. A foundational shift in how identity data is stored, shared, and secured is necessary.
Tokenization offers this shift. Tokenization replaces sensitive information with secure, non-sensitive equivalents. This process has already been proven to work in the financial sector. Visa has issued over 10 billion tokens, reducing fraud by 60% and preventing hundreds of millions in losses.
Verified trust credentials are tamper-proof digital versions of physical ID attributes. These credentials can be validated instantly without lengthy manual checks or repeated exchanges of personal information. A reusable verifiable trust credential typically comprises three key components: metadata, claims, and proof.
By tokenizing verified trust credentials, individuals can verify who they are without exposing unnecessary details. Organizations can validate both the credentials and the trustworthiness of their source. These credentials live in digital wallets, enabling users to control what they share and with whom.
The tokenization of verified trust credentials marks a major evolution in how digital identity is managed. Imagine a future where educational degrees, licenses, background checks, and IDs are stored in one secure wallet and shared only as needed. This is already happening in some areas, such as universities issuing degrees as verifiable credentials.
In the future, tokenized credentials could revolutionize patient data sharing in healthcare. Patients could grant secure, temporary access to records, keeping control while improving care coordination. The applications of tokenized credentials extend to age verification, borderless credential checks, and even secure online voting systems.
The internet lacks a built-in identity layer, making personal data vulnerable to breaches, fraud, and misuse. Tokenization fills this missing layer, giving individuals the power to verify identity and build trust online without surrendering control of their private data. This is no longer optional; it’s essential in a world of rising cyber threats, evolving regulations, and AI-powered decision-making.
