From the Wikipedia:
"An online Identity is a social identity that network users establish in online communities. Although some people prefer to use their real names online, most Internet users prefer to identify themselves by means of pseudonyms, which reveal varying amounts of personally identifiable information. In some online contexts, including Internet forums, MUDs, instant messaging, and massively multiplayer online games, users can represent themselves visually by choosing an avatar, an icon-sized graphic image. As other users interact with an established online identity, it acquires a Reputation, which enables them to decide whether the identity is worthy of Trust." (http://en.wikipedia.org/wiki/Online_identity)
"The models for online identity have advanced through four broad stages since the advent of the Internet: centralized identity, federated identity, user-centric identity, and self-sovereign identity.
Phase One: Centralized Identity
(administrative control by a single authority or hierarchy) In the Internet’s early days, centralized authorities became the issuers and authenticators of digital identity. Organizations like IANA (1988) determined the validity of IP addresses and ICANN (1998) arbitrated domain names. Then, beginning in 1995, certificate authorities (CAs) stepped up to help Internet commerce sites prove they were who they said they were.
Some of these organizations took a small step beyond centralization and created hierarchies. A root controller could annoint other organizations to each oversee their own heirarchy. However, the root still had the core power — they were just creating new, less powerful centralizations beneath them.
Unfortunately, granting control of digital identity to centralized authorities of the online world suffers from the same problems caused by the state authorities of the physical world: users are locked in to a single authority who can deny their identity or even confirm a false identity. Centralization innately gives power to the centralized entities, not to the users.
As the Internet grew, as power accumulated across hierarchies, a further problem was revealed: identities were increasingly balkanized. They multiplied as web sites did, forcing users to juggle dozens of identities on dozens of different sites — while having control over none of them.
To a large extent, identity on the Internet today is still centralized — or at best, hierarchical. Digital identities are owned by CAs, domain registrars, and individual sites, and then rented to users or revoked at any time. However, for the last two decades there’s also been a growing push to return identities to the people, so that they actually could control them.
Interlude: Foreshadowing the Future
PGP (1991) offered one of the first hints toward what could become self-sovereign identity. It introduced the 'Web of Trust'1, which established trust for a digital identity by allowing peers to act as introducers and validators of public keys2. Anyone could be validator in the PGP model. The result was a powerful example of decentralized trust management, but it focused on email addresses, which meant that it still depended on centralized hierarchies. For a variety of reasons, PGP never became broadly adopted.
Other early thoughts appeared in “Establishing Identity without Certification Authority” (1996), a paper by Carl Ellison that examined how digital identity was created3. He considered both authorities such as Certificate Authorities and peer-to-peer systems like PGP as options for defining digital identity. He then settled on a method for verifying online identity by exchanging shared secrets over a secure channel. This allowed users to control their own identity without depending on a managing authority.
Ellison was also at the heart of the SPKI/SDSI project (1999) 4 - 5. Its goal was to build a simpler public infrastructure for identity certificates that could replace the complicated X.509 system. Although centralized authorities were considered as an option, they were not the only option.
It was a beginning, but an even more revolutionary reconception of identity in the 21st century would be required to truly bring self-sovereignty to the forefront.
Phase Two: Federated Identity
(administrative control by multiple, federated authorities)
The next major advancement for digital identity occurred at the turn of the century when a variety of commercial organizations moved beyond hierarchy to debalkanize online identity in a new manner.
Microsoft’s Passport (1999) initiative was one of the first. It imagined federated identity, which allowed users to utilize the same identity on multiple sites. However, it put Microsoft at the center of the federation, which made it almost as centralized as traditional authorities.
In response Sun Microsoft organized the Liberty Alliance (2001). They resisted the idea of centralized authority, instead creating a "true" federation, but the result was instaed an oligarchy: the power of centralized authority was now divided among several powerful entities.
Federation improved on the problem of balkanization: users could wander from site to site under the system. However, each individual site remained an authority."
Phase Three: User-Centric Identity
(individual or administrative control across multiple authorities without requiring a federation)
The Augmented Social Network (2000) laid the groundwork for a new sort of digital identity in their proposal for the creation of a next-generation Internet. In an extensive white paper6, they suggested building “persistent online identity” into the very architecture of the Internet. From the viewpoint of self-sovereign identity, their most important advance was “the assumption that every individual ought to have the right to control his or her own online identity”. The ASN group felt that Passport and the Liberty Alliance could not meet these goals because the “business-based initiatives” put too much emphasis on the privatization of information and the modeling of users as consumers.
These ASN ideas would become the foundation of much that followed.
The Identity Commons (2001-Present) began to consolidate the new work on digital identity with a focus on decentralization. Their most important contribution may have been the creation, in association with the Identity Gang, of the Internet Identity Workshop (2005-Present) working group. For the last ten years, the IIW has advanced the idea of decentralized identity in a series of semi-yearly meetings.
The IIW community focused on a new term that countered the server-centric model of centralized authorities: user-centric identity. The term suggests that users are placed in the middle of the identity process. Initial discussions of the topic focused on creating a better user experience7, which underlined the need to put users front and center in the quest for online identity. However the definition of a user-centric identity soon expanded to include the desire for a user to have more control over his identity and for trust to be decentralized8.
The work of the IIW has supported many new methods for creating digital identity, including OpenID (2005), OpenID 2.0 (2006), OpenID Connect (2014), OAuth (2010), and FIDO (2013). As implemented, user-centric methodologies tend to focus on two elements: user consent and interoperability. By adopting them, a user can decide to share an identity from one service to another and thus debalkanize his digital self.
The user-centric identity communities had even more ambitious visions; they intended to give users complete control of their digital identities. Unfortunately, powerful institutions co-opted their efforts and kept them from fully realizing their goals. Much as with the Liberty Alliance, final ownership of user-centric identities today remain with the entities that register them.
OpenID offers an example. A user can theoretically register his own OpenID, which he can then use autonomously. However, this takes some technical know-how, so the casual Internet user is more likely to use an OpenID from one public web site as a login for another. If the user selects a site that is long-lived and trustworthy, he can gain many of the advantages of a self-sovereign identity — but it could be taken away at any time by the registering entity!
Facebook Connect (2008) appeared a few years after OpenID, leveraging lessons learned, and thus was several times more successful largely due to a better user interface9. Unfortunately, Facebook Connect veers even further from the original user-centric ideal of user control. To start with, there’s no choice of provider; it’s Facebook. Worse, Facebook has a history of arbitrarily closing accounts, as was seen in their recent real-name controversy10. As a result, people who access other sites with their “user-centric” Facebook Connect identity may be even more vulnerable than OpenID users to losing that identity in multiple places at one time.
It’s central authorities all over again. Worse, it’s like state-controlled authentication of identity, except with a self-elected “rogue” state.
In other words: being user-centric isn’t enough.
Phase Four: Self-Sovereign Identity
(individual control across any number of authorities)
User-centric designs turned centralized identities into interoperable federated identities with centralized control, while also respecting some level of user consent about how to share an identity (and with whom). It was an important step toward true user control of identity, but just a step. To take the next step required user autonomy.
This is the heart of self-sovereign identity, a term that’s coming into increased use in the ‘10s. Rather than just advocating that users be at the center of the identity process, self-sovereign identity requires that users be the rulers of their own identity.
One of the first references to identity sovereignty occurred in February 2012, when developer Moxie Marlinspike wrote about “Sovereign Source Authority”. He said that individuals “have an established Right to an ‘identity’”, but that national registration destroys that sovereignty. Some ideas are in the air, so it’s no surprise that almost simultaneously, in March 2012, Patrick Deegan began work on Open Mustard Seed, an open-source framework that gives users control of their digital identity and their data in decentralized systems12. It was one of several "personal cloud" initiatives that appeared around the same time.
Since then, the idea of self-sovereign identity has proliferated. Marlinspike has blogged how the term has evolved. As a developer, he shows one way to address self-sovereign identity: as a mathematical policy, where cryptography is used to protect a user’s autonomy and control. However, that’s not the only model. Respect Network instead addresses self-sovereign identity as a legal policy; they define contractual rules and principles that members of their network agree to follow14. The Windhover Principles For Digital Identity, Trust and Data and Everynym’s Identity System Essentials offer some additional perspectives on the rapid advent of self-sovereign identity since 2012.
In the last year, self-sovereign identity has also entered the sphere of international policy17. This has largely been driven by the refugee crisis that has beset Europe, which has resulted in many people lacking a recognized identity due to their flight from the state that issued their credentials. However, it’s a long-standing international problem, as foreign workers have often been abused by the countries they work in due to the lack of state-issued credentials.
If self-sovereign identity was becoming relevant a few years ago, in light of current international crises its importance has skyrocketed." (http://www.lifewithalacrity.com/2016/04/the-path-to-self-soverereign-identity.html)
Extensive article in the Wikipedia at http://en.wikipedia.org/wiki/Online_identity