Introduction to Azure Active Directory Verifiable Credentials (Preview)


Azure Active Directory Verifiable Credentials is currently in public preview. This preview version is provided without a service level agreement, and it's not recommended for production workloads. Certain features might not be supported or might have constrained capabilities. For more information, see Supplemental Terms of Use for Microsoft Azure Previews.

Our digital and physical lives are increasingly linked to the apps, services, and devices we use to access a rich set of experiences. This digital transformation allows us to interact with hundreds of companies and thousands of other users in ways that were previously unimaginable.

But identity data has too often been exposed in security breaches. These breaches affect our social, professional, and financial lives. Microsoft believes that there’s a better way. Every person has a right to an identity that they own and control, one that securely stores elements of their digital identity and preserves privacy. This primer explains how we are joining hands with a diverse community to build an open, trustworthy, interoperable, and standards-based Decentralized Identity (DID) solution for individuals and organizations.

Why we need Decentralized Identity

Today we use our digital identity at work, at home, and across every app, service, and device we use. It’s made up of everything we say, do, and experience in our lives—purchasing tickets for an event, checking into a hotel, or even ordering lunch. Currently, our identity and all our digital interactions are owned and controlled by other parties, some of whom we aren’t even aware of.

Generally, users grant consent to several apps and devices. This approach requires a high degree of vigilance on the user's part to track who has access to what information. On the enterprise front, collaboration with consumers and partners requires high-touch orchestration to securely exchange data in a way that maintains privacy and security for all involved.

We believe a standards-based Decentralized Identity system can unlock a new set of experiences that give users and organizations to have greater control over their data—and deliver a higher degree of trust and security for apps, devices, and service providers.

Lead with open standards

We’re committed to working closely with customers, partners, and the community to unlock the next generation of Decentralized Identity–based experiences, and we’re excited to partner with the individuals and organizations that are making incredible contributions in this space. If the DID ecosystem is to grow, standards, technical components, and code deliverables must be open source and accessible to all.

Microsoft is actively collaborating with members of the Decentralized Identity Foundation (DIF), the W3C Credentials Community Group, and the wider identity community. We’ve worked with these groups to identify and develop critical standards, and the following standards have been implemented in our services.

What are DIDs?

Before we can understand DIDs, it helps to compare them with current identity systems. Email addresses and social network IDs are human-friendly aliases for collaboration but are now overloaded to serve as the control points for data access across many scenarios beyond collaboration. This creates a potential problem, because access to these IDs can be removed at any time by external parties.

Decentralized Identifiers (DIDs) are different. DIDs are user-generated, self-owned, globally unique identifiers rooted in decentralized systems like ION. They possess unique characteristics, like greater assurance of immutability, censorship resistance, and tamper evasiveness. These attributes are critical for any ID system that is intended to provide self-ownership and user control.

Microsoft’s verifiable credential solution uses decentralized credentials (DIDs) to cryptographically sign as proof that a relying party (verifier) is attesting to information proving they are the owners of a verifiable credential. A basic understanding of DIDs is recommended for anyone creating a verifiable credential solution based on the Microsoft offering.

What are Verifiable Credentials?

We use IDs in our daily lives. We have drivers licenses that we use as evidence of our ability to operate a car. Universities issue diplomas that prove we attained a level of education. We use passports to prove who we are to authorities as we arrive to other countries. The data model describes how we could handle these types of scenarios when working over the internet but in a secure manner that respects users' privacy. You can get additional information in The Verifiable Credentials Data Model 1.0.

In short, verifiable credentials are data objects consisting of claims made by the issuer attesting information about a subject. These claims are identified by schema and include the DID the issuer and subject. The issuer's DID creates a digital signature as proof that they attest to this information.

How does Decentralized Identity work?

We need a new form of identity. We need an identity that brings together technologies and standards to deliver key identity attributes like self-ownership and censorship resistance. These capabilities are difficult to achieve using existing systems.

To deliver on these promises, we need a technical foundation made up of seven key innovations. One key innovation is identifiers that are owned by the user, a user agent to manage keys associated with such identifiers, and encrypted, user-controlled datastores.

overview of Microsoft's verifiable credential environment

1. W3C Decentralized Identifiers (DIDs) IDs users create, own, and control independently of any organization or government. DIDs are globally unique identifiers linked to Decentralized Public Key Infrastructure (DPKI) metadata composed of JSON documents that contain public key material, authentication descriptors, and service endpoints.

2. Decentralized system: ION (Identity Overlay Network) ION is a Layer 2 open, permissionless network based on the purely deterministic Sidetree protocol, which requires no special tokens, trusted validators, or other consensus mechanisms; the linear progression of Bitcoin's time chain is all that's required for its operation. We have open sourced a npm package to make working with the ION network easy to integrate into your apps and services. Libraries include creating a new DID, generating keys and anchoring your DID on the Bitcoin blockchain.

3. DID User Agent/Wallet: Microsoft Authenticator App Enables real people to use decentralized identities and Verifiable Credentials. Authenticator creates DIDs, facilitates issuance and presentation requests for verifiable credentials and manages the backup of your DID's seed through an encrypted wallet file.

4. Microsoft Resolver An API that connects to our ION node to look up and resolve DIDs using the did:ion method and return the DID Document Object (DDO). The DDO includes DPKI metadata associated with the DID such as public keys and service endpoints.

5. Azure Active Directory Verified Credentials Service An issuance and verification API and open-source SDK for W3C Verifiable Credentials that are signed with the did:ion method. They enable identity owners to generate, present, and verify claims. This forms the basis of trust between users of the systems.

A sample scenario

The scenario we use to explain how VCs work involves:

  • Woodgrove Inc. a company.
  • Proseware, a company that offers Woodgrove employees discounts.
  • Alice, an employee at Woodgrove, Inc. who wants to get a discount from Proseware

Today, Alice provides a username and password to log onto Woodgrove’s networked environment. Woodgrove is deploying a VC solution to provide a more manageable way for Alice to prove she is an employee of Woodgrove. Proseware is using a VC solution compatible with Woodgrove's VC solution and they accept credentials issued by Woodgrove as proof of employment.

The issuer of the credential, Woodgrove Inc., creates a public key and a private key. The public key is stored on ION. When the key is added to the infrastructure, the entry is recorded in a blockchain-based decentralized ledger. The issuer provides Alice the private key that is stored in a wallet application. Each time Alice successfully uses the private key the transaction is logged in the wallet application.


Roles in a verifiable credential solution

There are three primary actors in the verifiable credential solution. In the following diagram:

  • Step 1, the user requests a verifiable credential from an issuer.
  • Step 2, the issuer of the credential attests that the proof the user provided is accurate and creates a verifiable credential signed with their DID and the user’s DID is the subject.
  • In Step 3, the user signs a verifiable presentation (VP) with their DID and sends to the verifier. The verifier then validates of the credential by matching with the public key placed in the DPKI.

The roles in this scenario are:

roles in a verifiable credential environment

issuer – The issuer is an organization that creates an issuance solution requesting information from a user. The information is used to verify the user’s identity. For example, Woodgrove, Inc. has an issuance solution that enables them to create and distribute verifiable credentials (VCs) to all their employees. The employee uses the Authenticator app to sign in with their username and password, which passes an ID token to the issuing service. Once Woodgrove, Inc. validates the ID token submitted, the issuance solution creates a VC that includes claims about the employee and is signed with Woodgrove, Inc. DID. The employee now has a verifiable credential that is signed by their employer, which includes the employees DID as the subject DID.

user – The user is the person or entity that is requesting a VC. For example, Alice is a new employee of Woodgrove, Inc. and was previously issued her proof of employment verifiable credential. When Alice needs to provide proof of employment in order to get a discount at Proseware, she can grant access to the credential in her Authenticator app by signing a verifiable presentation that proves Alice is the owner of the DID. Proseware is able to validate the credential was issued by Woodgrove, Inc.and Alice is the owner of the credential.

verifier – The verifier is a company or entity who needs to verify claims from one or more issuers they trust. For example, Proseware trusts Woodgrove, Inc. does an adequate job of verifying their employees’ identity and issuing authentic and valid VCs. When Alice tries to order the equipment she needs for her job, Proseware will use open standards such as SIOP and Presentation Exchange to request credentials from the User proving they are an employee of Woodgrove, Inc. For example, Proseware might provide Alice a link to a website with a QR code she scans with her phone camera. This initiates the request for a specific VC, which Authenticator will analyze and give Alice the ability to approve the request to prove her employment to Proseware. Proseware can use the verifiable credentials service API or SDK, to verify the authenticity of the verifiable presentation. Based on the information provided by Alice they give Alice the discount. If other companies and organizations know that Woodgrove, Inc. issues VCs to their employees, they can also create a verifier solution and use the Woodgrove, Inc. verifiable credential to provide special offers reserved for Woodgrove, Inc. employees.

Next steps

Now that you know about DIDs and verifiable credentials try them yourself by following our get started article or one of our articles providing more detail on verifiable credential concepts.