Exploring Decentralized Digital Identity An Ecosystem Perspective

The age of centralized digital platforms has resulted in centralized digital identity solutions controlled by major tech companies, raising concerns regarding user autonomy and privacy. In order to face these concerns, the concept of decentralized digital identity models has emerged, aiming to empower users to take back control over their personal data and mitigate the influence of large platform corporations. To research this topic this study aims to answer the following research questions: (i) What are the key elements in establishing a decentralized digital identity ecosystem, and (ii) how does it align and differ from existing digital identity models? The research utilizes an ecosystem lens to understand the key elements needed for establishing a decentralized digital identity ecosystem. Additionally, this thesis aims to compare a practical real-world instance of decentralized digital identity with the existing literature on identity models. Our qualitative research method involved conducting 12 semi-structured interviews with nine experts actively engaged in the field of digital identity solutions, across six companies. The collected data was analyzed using thematic analysis and abductive reasoning. The analysis resulted in the development of a three-phase model. The model depicts the phases of establishing a decentralized digital identity ecosystem; 1) its initiating phase, 2) establishing the ecosystem, and 3) the operational dynamics within the established ecosystem. The research contributes to the theory by providing a comprehensive understanding of the key elements in establishing a decentralized digital identity ecosystem, underlining the importance of value creation, collaborative efforts among actors, adoption, a trusted infrastructure, and technical interfaces. Furthermore, we contribute to the literature on digital identity models by examining a practical implementation of a decentralized digital identity model in the light of existing literature. Revealing that a practical decentralized digital identity model will include some central components, while still encompassing important concepts from decentralized digital identity models, by enhancing user control and privacy of identity data.