Peer DID

A Peer Decentralized Identifier (Peer DID) is a specific class of DID defined by the W3C DID specification, engineered for direct, private relationships between two or more entities. Unlike public DIDs anchored to a blockchain or other verifiable data registry, a Peer DID is created, stored, and managed solely by the parties in the relationship, making it inherently off-ledger. Its core purpose is to enable secure, encrypted communication channels—such as those used in DIDComm—without exposing the relationship's metadata to any public system. The identifier itself is typically generated from the cryptographic material used to establish the secure peer connection.

The structure of a Peer DID follows the formal method specification did:peer. A key innovation is that the DID document is derived directly from the DID itself, using a process called peer DID method. This means the document does not need to be fetched from a remote resolver; any party that knows the Peer DID string can computationally derive the associated public keys and service endpoints required for interaction. This design eliminates network lookup latency and ensures the connection parameters are self-contained and verifiable. Common derivation methods include using the inception key's public key material or a multi-party agreement protocol.

Peer DIDs are fundamental to architectures requiring high privacy and pairwise uniqueness, such as agent-to-agent communication in decentralized identity ecosystems. Each relationship between two parties uses a unique Peer DID, preventing correlation of activities across different contexts. This is a critical feature for SSI (Self-Sovereign Identity) wallets and edge agents. For instance, when your digital wallet connects to a company's verifier, they generate a unique Peer DID for that single relationship. All subsequent credentials, presentations, and messages are tied to that specific identifier, creating an encrypted peer-to-peer tunnel that is invisible to outside observers.

The primary technical standards governing Peer DIDs are the W3C's Decentralized Identifiers (DIDs) v1.0 core specification and the affiliated Peer DID Method Specification. This method spec details the exact algorithms for generating the DID string, deriving the DID document, and performing key updates. Implementation is common in Hyperledger Aries frameworks, which use Peer DIDs as the default identifier for Aries agents establishing did:peer connections. The reliance on direct cryptography rather than a consensus mechanism makes Peer DIDs lightweight, fast, and perfectly suited for the trust model of direct, authenticated communication.

A Peer DID (Decentralized Identifier) is a specific method for creating DIDs intended for direct, private relationships between two or more parties, operating entirely off-ledger. Unlike public DIDs registered on a verifiable data registry like a blockchain, a Peer DID is generated, stored, and managed locally by the involved peers. Its core purpose is to enable secure, encrypted communication channels—such as those used in DIDComm—without exposing the relationship or its metadata to any public system. The identifier itself is typically derived from the cryptographic keys used for the connection, following the did:peer method specification.

The lifecycle of a Peer DID begins with its creation. When two entities (e.g., a wallet and an agent) establish a connection, they generate a unique DID for that specific relationship. This often involves creating a DID Document that contains public keys, service endpoints for messaging, and verification methods. The DID document is not published; instead, it is shared directly and confidentially between the peers during the connection protocol. This method ensures that the existence and details of the relationship are known only to its participants, providing a high degree of privacy and reducing reliance on external resolvers.

Resolution and usage of a Peer DID occur locally. Since there is no central resolver, each peer stores the DID Document it received from its counterpart. When Alice wants to send an encrypted message to Bob, she uses Bob's Peer DID to look up his public key and service endpoint from her local storage. This enables off-ledger authentication and end-to-end encrypted communication. The did:peer method includes several formats (e.g., did:peer:1, did:peer:2) that define how the identifier is numerically derived from the DID Document's constituent elements, ensuring consistency without a registry.

The primary advantages of Peer DIDs are privacy, efficiency, and control. By avoiding blockchain writes, they eliminate transaction fees, latency, and the public permanence of relationship data. This makes them ideal for high-volume, ephemeral, or sensitive interactions in decentralized identity ecosystems. However, their off-ledger nature means they are not suitable for use cases requiring public verifiability or discovery by third parties. Peer DIDs and public, on-ledger DIDs are often used complementarily within the same identity system, each serving distinct trust models.

A Peer DID is a Decentralized Identifier (DID) method designed for private, peer-to-peer relationships, where the DID is created, stored, and resolved directly between the involved parties without anchoring to a public verifiable data registry like a blockchain. Defined in the DIF Peer DID Method Specification, its primary purpose is to enable secure, off-ledger connections for decentralized identity and verifiable credentials. This makes it ideal for use cases requiring high privacy, such as secure messaging, confidential business transactions, and personal data exchanges, where the existence and details of a relationship should not be publicly discoverable.

The structure of a Peer DID is defined by the did:peer method and consists of a unique identifier derived directly from the initial state of the DID Document itself, often using a cryptographic hash. This creates a self-certifying identifier, meaning the DID's authenticity can be verified by recomputing the hash from the document. The associated DID Document, which contains public keys and service endpoints, is exchanged and stored privately between peers, forming the basis for a secure communication channel. This is a fundamental departure from public DID methods like did:ethr or did:web, which rely on a shared, global system for resolution.

Key technical components include the peer DID method algorithms for generating the identifier, rules for DID Document composition, and protocols for DID Resolution and DID-to-DID Communication. Since there is no global resolver, peers must exchange their DID Documents directly, typically during an initial connection protocol like DIDComm or Out-of-Band (OOB) invitations. This exchange establishes a shared cryptographic context, enabling subsequent encrypted and authenticated interactions. The specification outlines several numalgo (numerical algorithm) types for generating the identifier suffix, such as 0 for a simple inception document hash and 2 for a more complex multi-key genesis version.

The primary advantages of Peer DIDs are enhanced privacy and efficiency. Relationships remain off the public ledger, reducing metadata leakage and eliminating transaction fees or latency associated with blockchain writes. They are also self-sovereign, as control is entirely with the peer entities. However, this introduces the challenge of discovery; without a public registry, two parties must have a prior, secure method to exchange their Peer DIDs. Therefore, Peer DIDs are often used in conjunction with public DIDs or other discovery mechanisms to bootstrap the initial private connection, creating a layered architecture for decentralized identity systems.