Users are the holders of their own data, including VCs and other files such as portfolios or logs. Their „digital twin“ consists of a wallet, where VCs are typically stored and managed, and might include a data pod in the cloud, where larger files are stored and managed—the latter is the digital equivalent of a safe-deposit box (see figure). Wallets can usually be found on personal devices, such as smartphones, and connect through so-called edge agents running on that device. Data pods are commonly hosted at so-called agencies and connect through so-called cloud agents running at the agency, but all under the control and in the possession of the user. In an extension of the concept of VCs, files in the data pod could be verifiable through storing hashes of the write transactions (full or incremental) in the ledger.
Preliminary versions of this paradigm have been rapidly taking hold over just a couple of years. Examples include payment systems such as Apple Pay, electronic boarding passes on airline applications, and COVID-19 vaccination and test certificates. Despite the implementation of several components of this new ecosystem, however, these mechanisms are not yet truly self-sovereign. For example, the airline still holds the authoritative copy of the flight booking; a fully self-sovereign implementation would mean that the booking only exists in the form of a VC under the control of the passenger.
With the user being the only holder of VCs, a central concern is data loss: what happens if users misplace their private keys and thus lose a lifetime of achievements and credentials? This problem is not unique to the educational sector, since the same would be true for almost any kind of VCs in a completely data self-sovereign world. Work on backup and recovery mechanisms is under way and will need to be addressed well beyond this particular ecosystem. A promising mechanism is to redundantly and automatically distribute „shards“ of the wallet data over the wallets of a sufficiently large number of friends and relatives, also known as „social recovery.“