Can Digital Notarization Solve Digital ID’s Chicken-and-egg Problem?

Which came first, the chicken or the egg?

Unlike a traditional, linear startup, a platform doesn’t need to acquire just one group of customers. At a minimum it needs two, its consumers and its producers.

But new platforms don’t initially create enough value to attract new users. It’s not economical for consumers to join the platform when there are no producers, and vice versa. This is called the chicken-and-egg problem.

This same problem exists in digital identity. Just switch out producers for issuers, consumers for verifiers, and platforms for ecosystems. And we have ourselves a chicken-and-egg problem.

The business value of credential exchange happens at verifications (e.g., lowered costs, lowered risk/fraud, lowered friction). And for this business value to be created, more credentials are needed in holders’ wallets.

Does the digital ID chicken-and-egg problem get solved by governments issuing ID credentials to their citizens? Must we wait on governments to become issuers to solve it?

What if organizations that currently conduct examinations (e.g., a financial institution does KYC during account opening) can extend their processes into the issuance of credentials?

Or what if digital trust providers (e.g., document authentication) extend their offering into the issuance of machine readable credentials?

Do issuers need to have access to source data (and uniqueness) to become attesters? 

In the physical world, notaries exist to attest to the validity of documents. And this practice is very much trusted by verifiers.

Can Digital Notarization solve Digital ID’s chicken-and-egg problem?

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