Decentralized Identifiers: Building Smarter, More Sustainable Customer Relationships

The following was published as Chapter 1 of our series, The Seven Deadly Sins of Digital Customer Relationships. This chapter can be read by itself as a great introduction to self-sovereign identity (SSI) and decentralized identifiers (DIDs). However, if you’d like to start from the beginning, you can find the entire series here and the preface here.

Seven Sins of Customer Relationships: Lust & Decentralized Identifiers

Every day, billions of tiny data files – so called ‘cookies’ and device identifiers – are monitoring our connected devices all over the world. These tiny digital trackers expose deep insights about what people are doing online, what apps they use, how they use them, where they have been recently, and what online content they look at and when. They reveal how long app visitors scroll for, what they tap on, when and where they fill out forms (and if they complete them), not to mention detailed information about the customer’s device, the battery status… even their real-time typing behavior (called ‘keystroke dynamics’).

It’s a LOT of data.

Gathering as much customer data as possible has not only become a business norm, it’s become core to many business models in our digital economy today.

The use of cookies over the last decade alone has simply exploded. Like tiny wiretaps inside our browsers and mobile apps, cookies lie at the heart of today’s data tracking and customer surveillance economy, with many companies regularly choosing to track individuals who aren’t even customers.

Like tiny wiretaps inside our browsers and mobile apps, cookies lie at the heart of today’s data tracking and customer surveillance economy

Cookies have had an immeasurable impact on the digital economy since 1995 and have prompted important questions about citizen surveillance and business ethics. Their widespread use to track individuals online has helped accelerate the adoption of many data protection regulations including the General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA).

I think it’s fair to say that the explosion and use of cookies, trackers and device identifiers have become a story of data lust.

Lust sometimes gets described as an ‘intense wanting’ or ‘longing.’ Given some of the intense tracker activity seen across websites today, it feels a justifiable label.

There are three root causes for this increasing lust for consumer data.

First, it’s become incredibly easy to track customers at low cost, to follow their digital footprints around the internet. If it’s said that “what can be connected, will be connected…,” then in today’s digital economy, “what data can be collected, will be collected.

Second, this business norm has roots in something deeper: the often-touted company value of ‘customer obsession.’ It’s one thing to be passionate about helping customers solve real problems; but quite another to be ‘obsessed.’ It conjures up images of excess and addiction. (Just think about it: a teacher wouldn’t say they were obsessed with their students; nor a married person obsessed with their spouse. Obsessive individuals often need help and treatment, and are sometimes given restraining orders).

And third, many businesses are simply ignoring the downstream impacts that customer tracking has on the rest of business: the additional overheads like the compliance and IT processes needed to manage, secure and clean the data collected; plus considering the effects of losing customer trust when the company’s vast troves of personal data are hacked or breached.

Why does it matter?

This isn’t about changing business processes because some tinfoil-hat-wearing customers are ranting about digital privacy. It’s about recognizing that this widespread tracking behavior is actually changing how customers now behave.

Individuals repeatedly tell business they don’t want to be tracked, yet that’s exactly what then happens. So guess what: customers now hand over a bunch of fake personal data when signing up for new services. What’s that? You need a full name? Sure: Mickey Mouse. Email: I wonder how many dates of birth are recorded in CRM systems as 1/1/1990.

Then consider this: it’s estimated that up to half of shoppers are deciding not to use a product due to privacy concerns. Unwanted customer tracking is also now one of the reasons behind the explosion in the use of consumer privacy tools, and why companies like Apple are making privacy a centerpiece of their products and brand marketing.

Up to half of shoppers are deciding not to use a product due to privacy concerns

But there’s more afoot here. Technology providers are now helping consumers block tracking by default, and Apple is even going after the tracking industry by killing-off user device IDs completely.

When you add it all up together you can see that ‘going digital’ isn’t just about capturing more data and building richer customer insights. It’s about understanding a new digital dynamic, appreciating the new consumer attitudes to privacy, and understanding a larger loss of confidence in our digital economy that many companies are simply ignoring.

A smarter, and more private, way

But how about this: what if each customer could manage their own digital footprints, their own digital identifiers?

What if individuals could automatically create a new, unique identifier – think of it like a contact number – for each and every digital relationship they have: one for every business, every service provider, every school, government department, and so on. And what if each organization did the same in return, creating a new, unique contact number for each and every customer they dealt with.

It would mean that when the customer contacted the business, they would be recognized instantly because it could only ever be that single customer calling on that special number. And when the organization contacted the customer, they too would be instantly recognized. No more need to plant persistent cookies on devices to track customers everywhere. But also: no phone call phishing. Seamless call center experiences. Fraud would plummet. It could transform levels of trust everywhere.

Decentralized Identifiers (or ‘DIDs’ for short) now make this possible. Excitingly, these DID aren’t just ‘contact numbers’, but a clever way of knowing you’re dealing with the same person or business as before, so it’s way more than a contact number: it’s an identifier that can work across any context or setting; from a mobile app or on a website; from dealing with a contact center or even face-to-face.

DIDs have huge potential, and the World Wide Web Consortium (W3C) – the body that looks after the standards for the web – are getting pretty serious about it. And the last time they looked at identifiers it was 20 years ago… to define the URL.

Sustainable relationships & decentralized identifiers

DIDs have the potential to impact every person, business and connected ‘thing’ on the planet. I’d go as far as to say that DIDs will be as disruptive to the economy as the internet and mobile phones have been to twentieth century business models and structures.

DIDs are about building lasting private and secure digital relationships with customers

DIDs are about building lasting private and secure digital relationships with customers, and as we’ll see with each of the Deadly Sins, about reducing costs, increasing compliance and enabling truly personalized products and services – without being creepy.

Companies whose very business models depend on correlation and tracking (data brokers anyone?) will have an increasingly difficult time. But those that want to build genuine, direct and private digital relationships with customers will thrive.

Digital privacy is undoubtedly going to shape the next decade of economic and global growth. So here’s the prediction: it’ll soon become more valuable to build sustainable customer relationships over secure and trusted digital connections using DIDs, than to lust over customer data with tracking cookies and digital surveillance infrastructure like today’s ad-tech woowoo.

I’ll go further: in 10 year’s time, 80% of the data that’s collected today will become relatively useless compared to the data that’s exchanged with customers using Decentralized Identifiers.

With DIDs, businesses will enable a whole new category of direct, secure, private and permissioned digital relationships, while unlocking new customer experiences, new business models, and new levels of customer trust.

So here’s to the next several years of customer tracking, but this time using the customer’s very own set of DIDs that they control. And here’s to an end to one-sided digital surveillance; to introducing some overdue checks and balances on today’s so-called customer obsession with data.

Acting on lust without having a trusted relationship is quite simply stalking.

Decentralized Identifiers might just become a kind of self-help treatment badly needed by those businesses obsessing about customer data. And it’s about time too…. else customers will be filing for that restraining order…

Enjoyed this chapter?

You can find our entire series on the Seven Deadly Sins of Digital Customer Relationships here, or use the buttons below to view the previous and next chapters:

7 Deadly Sins of Digital Customer Relationships

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In today’s big data arms race, customer relationships have taken a backseat to customer data. Self-sovereign identity (SSI) offers a much-needed correction.

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2. Sloth

What it means to challenge the status quo and start building ‘outside-in,’ with customer feedback sourced from new secure, private, and direct customer channels.