The Hidden Flaw in Most Enterprise DID Implementations

The DID Paradox is this: Decentralized Identifiers promise user-controlled identity, but enterprise implementations like Microsoft Entra Verified ID or IBM's offerings architect for corporate custody. This centralizes the root of trust they claim to decentralize.

The flaw is architectural: These systems treat the DID document—the core identity record—as a permissioned database entry. This contradicts the W3C standard's vision of a verifiable data registry anchored on a public ledger like Ethereum or ION.

The consequence is fragility: A corporate DID provider becomes a single point of failure. If Accenture's internal system revokes a key, the user's entire verifiable credential graph breaks. This recreates the legacy identity silos DIDs were designed to dismantle.

Evidence: In a true decentralized system like Ethereum with ENS or SpruceID's Kepler, key rotation and document updates are self-sovereign transactions. Enterprise models delegate this control, making the DID a walled credential, not a foundational identity layer.

Enterprise DID systems are walled gardens. They treat identity as a private asset, not a public good. This design prevents the composable network effects that make public blockchains valuable.

The flaw is architectural, not political. A system like Microsoft Entra Verified ID or a private Hyperledger Indy network creates a closed graph. It cannot interoperate with the open, permissionless protocols like Ceramic or ENS that drive utility.

Utility drives adoption, not compliance. A DID is worthless if it only works in one vendor's ecosystem. The verifiable credential model fails without a shared, neutral settlement layer for attestations, akin to how Ethereum settles value.

Evidence: The W3C DID standard lists 150+ methods, but fewer than 10 have meaningful adoption. This fragmentation is the direct result of sovereign design choices that ignore Metcalfe's Law.

Enterprise DID implementations fail because they prioritize internal control over user sovereignty. They treat the DID as a company-owned credential, not a user-owned asset, which defeats the purpose of decentralized identity.

The privacy trade-off is false. Systems like Indy/Aries or Veramo offer selective disclosure and zero-knowledge proofs, providing more granular privacy than a corporate black box. Enterprise demands for total data opacity create walled gardens, not a web of trust.

Evidence: Microsoft's ION, built on Bitcoin, demonstrates that enterprise-scale systems can use public, permissionless networks for anchoring without exposing private user data, proving the control argument is often a legacy compliance crutch.

Enterprise DID silos are legacy databases. Most corporate decentralized identity projects use private, permissioned ledgers that create isolated data pools. This architecture defeats the purpose of portable, user-owned identity and replicates the vendor lock-in of traditional systems like Okta or Active Directory.

The solution is shared verification layers. The value is not in hosting the credential data, but in providing cryptographic proof of state. Protocols like Veramo and Spruce ID demonstrate this by decoupling credential issuance from verification, enabling interoperability across chains and enterprises.

Adopt the W3C Verifiable Credentials standard. This open specification, not a proprietary blockchain, is the true interoperability layer. It allows credentials issued on a private Hedera network to be verified on a public Ethereum application, moving beyond chain-specific solutions.

Evidence: Microsoft's ION, built on Bitcoin, processes over 50,000 decentralized identifiers (DIDs) daily on a public network, proving scalable, shared infrastructure is viable for enterprise-grade identity without creating new silos.