Verifiable Credentials

Verifiable Credentials (VCs) are essential to self-sovereign ecosystems. Alongside their verifiable content (ideally based on an agreed-upon data model), VCs have a verifiable issuer—whoever generated the VC—and a verifiable subject—whomever the VC was made out to. In addition, a VC has a holder, which is the entity that has the VC in its possession, for example inside a wallet. In most cases, subject and holder are the same entity, but this does not have to be the case: for example, a parent might be the holder of a VC (for example a school’s grade report) with his or her child as the subject, while that child is still a minor. The VC would later change holders.

Each ecosystem also needs a ledger where issuance of VCs is cryptographically recorded. This ledger, frequently a blockchain, can be out in the open, and copies are typically widely distributed; this is possible because the ledger does not include any information that is useful beyond cryptographically verifying a VC. It is important to note that this blockchain does not have to be of the energy-devouring cryptocurrency type with its expensive proof-of-work; in fact, a federated blockchain with a consensus-based proof-of-stake is far preferable. 

Using a „cheap“, non-energy-devouring ledger also allows for VCs to be fine-grained. VCs are traditionally associated with complete degrees, like a bachelor or masters degree. However, in a decentralized ecosystem, the same type of VCs can be issued for solving one particular homework problem or attending a training session. In fact, VCs will be the general way to transfer verifiable information between educational services.


Holders can present VCs to other entities, which can independently verify the authenticity against the ledger—in SSI lingo, the recipient of a VC is then called the verifier. VCs can be presented in whole or in part to provide proof for claims (credentials that the holder claims to have, such as „I have three credits for Calculus 1 at XYZ University in FS21 with a grade of 3.5“). Particularly intriguing are zero-knowledge proofs, in which an entity proves that it holds certain data but does not reveal what it is (Question: „Excuse, do you know what time it is?“ Answer: „Yes.“). VCs can be revoked by the issuer or have preset expiration dates.

For VCs to work across ecosystems, the VC includes information which ledger should be used for verification. The governance of each ecosystem needs to decide with other ecosystems (and its ledgers) to trust. Notably, national governments might run their own „official“ ecosystems and ledgers, and VCs issued for identity assertion from different nations would need to be trusted within the educational ecosystems.

A user receives a VC from an institution, in this example a degree certificate from Institution A. At this time, a cryptographic fingerprint of the VC is calculated and stored in a distributed ledger. Since the fingerprint does not contain the content of the VC and neither issuer nor holder are identifiable, this ledger can be public. Institution A could later revoke the VC, for example if academic fraud is detected, but this transaction would be documented and could be reconstructed.

Possibly decades later, the user presents the VC to another institution, in this example Institution B. Institution B can verify the validity of the VC by calculating its fingerprint and checking against the ledger. At this point, possible mutation could be detected, and it is checked if the VC has been revoked. Institution A will not be aware of this transaction and does not even need to exist anymore.