November 15, 2022




GDPR and self-sovereign Identity: this is how it will affect your business

Self-sovereign identity is gaining momentum to establish and maintain digital personal data. This article offers insight into how SSI and GDPR may affect your business, but more importantly, how to comply with these regulations.

With personal data being one of today's most valuable assets, those who control it can exert considerable influence over others. To prevent this kind of power, a transition is made from a centralized approach to decentralized concepts about identity management- moving away from organizations managing information and putting users at their mercy instead of self-sovereign identities (SSI).

What is a decentralized identity or SSI?

Self-sovereign identity is used interchangeably with decentralized identity. But in fact, decentralized identity is just one component of sovereign identity. Are you still with us? Let's explain this more thoroughly. 

Decentralized identity is the idea

The idea behind the decentralized identity is that every person should be in charge of their digital presence. Decentralized identity systems are built on self-sovereignty, meaning that users are the ultimate owners of their data. This allows them to share only the data they want to share, with whom they want to share it, and when they want to share it.

Another advantage of decentralized identity is that it can help to create a more trusted internet. In a decentralized system, users’ data is stored on their devices rather than on central servers vulnerable to hacking and data breaches. This makes it much more difficult for hackers to access and misuse people’s data.

Decentralized identity is often seen as a more privacy-friendly alternative to traditional online identity models, giving corporations and governments more control over individuals' data. However, businesses are more at risk in safeguarding this data. The concept of decentralized identity is still in its early stages of development, but it is the path forward in managing data risks. Decentralized identity is the idea of generating, caring for, and controlling your data. How does this relate to self-sovereign identity?

Self-sovereign identity is how you make it work

Self-sovereign identity is an approach to digital identity that gives individuals control over the information they use to prove who they are to websites, services, and applications across the web. Experts distinguish three main components known as the blockchain (although optional), verifiable credentials, and decentralized identifiers - the actual decentralized digital identity - which are all integral parts of Self Sovereignty. Self-sovereign identity is the practical execution of keeping a decentralized identity as decentralized and safe as can be.

What is the GDPR?

As a person, you can choose to which extent you manage and control your identity, but for companies, there are strict regulations concerning personal data. Of course, we are talking about the European Union's General Data Protection Regulation (GDPR). This law went into effect on May 25th (2018), giving all individuals more control over their data, establishing new rights, and limiting companies in endless storage of personal data.

In this set of regulations, the European Union imposes strict requirements on collecting, using, and protecting personal data by companies. It also gives individuals the right to know what personal data is being collected about them, the right to access their data, the right to have their data erased, and the right to object to the processing of their data.

The upcoming implementation of the digital markets act

Over the next two years, three new legislative instruments will be introduced at the European level: the DSA, DGA, and DMA. The latter overlaps with the GDPR, which we will briefly touch on. 

The GDPR and the DMA are two crucial pieces of legislation that impact businesses operating in the EU. The GDPR regulates the handling of personal data, while the DMA covers digital markets.

The DMA is based on three key pillars: ensuring fair competition, protecting consumers and citizens, and promoting innovation and creativity. In addition, the GDPR sets strict rules on collecting, using, and protecting personal data. So what happens when these two pieces of legislation come together?

For example, the DMA contains specific provisions on data collected for competition law enforcement. This means that, in some cases, businesses may be required to disclose personal data to authorities even if doing so would violate GDPR rules.

Another exception is when the DMA provides a different legal basis for processing personal data. In such cases, businesses can rely on the DMA instead of the GDPR.

Overall, the GDPR and the DMA are both critical pieces of legislation that must be considered when operating in the EU. Businesses should know how these two laws interact and what exceptions apply.

How do SSI and GDPR align?

The self-sovereign identity movement is a natural fit for GDPR as they share two similar goals - ensuring an individual's privacy and protecting them from potential threats in today’s digital world. 

And while self-sovereign identity (SSI) gives individuals more control over how much information about themselves may be shared, the General Data Protection Regulation(GDPR) sets boundaries on which personal details are allowed to be shared between trusted parties.

With SSI and GDPR, businesses have to comply with user demands. As a result, companies are no longer accessible to sharing and storing personal data. Furthermore, since users are in control of being requested for any storage of information and data, they can track and withdraw permissions whenever they want.

For individuals, a brilliant development in keeping their online identity safe. But businesses need to tread carefully. On the one hand, they must comply with GDPR's stringent data protection requirements. But on the other hand, they must protect their customers' decentralized identities.

How does GDPR affect your business?

With evolving technologies, regulatory frameworks are following shortly, affecting life and business as we're used to. Nowadays, GDPR compliance is a crucial concern for companies operating in the EU. The regulation imposes strict data protection requirements on organizations, including protecting personal data from loss, destruction, or unauthorized access.

GDPR applies to any company that processes the personal data of EU citizens, regardless of where the company is located. Therefore, when operating in the EU, businesses should carefully apply the following rules to their data protection policy:

  1. Demonstrate and prove that your company complies with GDPR in processing the personal data of EU citizens unless you can demonstrate that you meet certain conditions.
  2. Get explicit consent before collecting, using, or sharing their data.
  3. Provide individuals with clear and concise information about their rights under GDPR, and ensure they can easily exercise them.

The GDPR also gives individuals the right to file a complaint with the supervisory authority if they believe their rights have been violated. But more importantly, the GDPR imposes significant fines for companies that violate its provisions, including up to 4% of a company's global annual revenue or €20 million, whichever is greater.

What are the risks?

Because data breaches affect individuals, the effects on businesses can be devastating. Global Kaspersky research on IT economics revealed a staggering average cost of 108,000 dollars each time a small business faced a data breach. This report dates to 2019 and is estimated to be four times higher these days.

It takes 277 days on average - 9 months - to identify and contain a breach. However, this report also shows that 1,120,000 can save when a breach is contained in 200 days or less. Imagine how much companies profit by keeping security standards high and complying with regulations.

How can your business benefit from SSI as a tool?

No need to emphasize the importance of proper SSI for your business. But here are some of the advantages decentralized identity solutions bring:

  1. Reduce the risk of cyber attacks since decentralized identity solutions leave the data in the hands of the holder/indidividual large honeypots of personal information are not created. Making hacking less appealing as it has to be done on a person-by-person basis.
  2. Complete the verification process quicker since SSI allows for real-time, decentralized verification of credentials. As well as the ability to 
  3. Prevent credential fraud more effectively through the use of verifiable credentials that can be instantly checked for authenticity.
  4. Make things easily auditable with clear digital paper trails that are transparent and shareable with regulatory authorities.

There is no one-size-fits-all solution, but businesses can do a few things to strike the right balance. For example, they can give their customers the option to opt-out of having their data shared with third parties. They can also ensure that they have robust security measures to protect customer data.

Using SSI as a tool, the process of generating, managing, and controlling data is fully digitalized.  For example, GDPR requires companies to keep track of user requests. Without SSI, this request is picked-up, processed, and sent back manually. While with decentralized identities, the need for a request is no longer needed, let alone that further steps are requested. All processes are transparent and retraceable by users in their wallets and the digital paper trail.   

Ultimately, it is up to businesses to decide how to best comply with GDPR while ensuring that their customers' decentralized identities are protected. However, if they take the time to do both, they will be in a much better position to succeed in the long run.

The internet has trust issues. Truvity is here to fix that

Truvity offers companies, developers, and identity experts complete decentralized digital identity management. We provide different solutions, such as


  • Decentralized identity for corporates
  • Decentralized identity for individuals
  • Decentralized identity for transactional relationships
  • Minimize KYC/AML workload
  • Building automated governance processes

Truvity offers companies, developers, and identity experts the opportunity to fully discover and adopt the power of SSI in their businesses and applications. Our cutting-edge, managed API platform converts the complexity of this new technology into a simple end-user platform. Complex SSI mechanics and basic SSI primitives enable developers to innovate by combining and configuring basic building blocks without spending their time grasping a deep understanding of SSI theory.

At the core of Truvity lies a database solution designed in-house - a critical infrastructure component for the whole platform. This database allows us to offer SSI-based solutions that are not only simple and convenient for the end user but also highly secure and compliant with data protection regulations.

The General Data Protection Regulation (GDPR) is one of the most critical pieces of legislation to come out of the European Union in recent years. It sets strict rules about collecting, using, and protecting personal data.

SSI has the potential to revolutionize the way we manage personal data, making it easier for individuals to control who has access to their data and giving them the ability to revoke that access at any time. This is why SSI is the perfect solution for organizations looking to comply with the GDPR. SSI allows organizations to collect and use personal data in a way that is transparent, accountable, and compliant with the law.

Get in touch with us today to find out more.

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