Microsoft Unveils Development of ION – A Decentralized Identity Network

Microsoft revealed that it is building a decentralized identity (DID) network on top of the Bitcoin network.

Announced in a blog post, the layer known as the Identity Overlay Network (ION) is based on a set of open standards developed in collaboration with the Decentralized Identity Foundation. Microsoft is one of the partners of the Decentralized Identity Foundation.

The project aims to deal with how underlying networks communicate to each other. The goal is to make user names obsolete. Instead of logging into Facebook, email or any other application with a username, users can use a digital decentralized ID (DID) instead. In this case, ION handles the decentralized identifiers, which control the ability to prove the user owns the keys to this data.

Individual ION nodes on the secondary network will be responsible for keeping track of these DIDs and inscribing them into the Bitcoin blockchain for attestation.

In explaining the rationale behind ION, the blog post added:

“We believe every person needs a decentralized, digital identity they own and control, backed by self-owned identifiers that enable secure, privacy preserving interactions. This self-owned identity must seamlessly integrate into their lives and put them at the center of everything they do in the digital world.”

Microsoft claims its approach also deals with the throughput issues, as public blockchains would have speed issues in a world where DIDs being used. The company says its network layer will be able to achieve tens of thousands of operations per second.


To that scope, Microsoft wants to cooperate with open-source contributors so ION can publicly launch on the Bitcoin mainnet in the coming months. While Microsoft has been behind the development, it’s open source and anyone can run a node.

According to the post, several companies have shown interest in running ION nodes, including Bitcoin hardware and security firm Casa and internet security company Cloudflare.

ION is not Microsoft’s first blockchain initiative. Earlier this month, it released a new Azure Blockchain Development Kit for the Ethereum blockchain, with Starbucks implementing this service to track coffee production.