What is Verifiable Credential – Know Its Role in Building Digital Trust

Written By Sambita Panigrahy  
Anuraag Singh
Approved By Anuraag Singh 
Published On October 31st, 2023
Reading Time 7 Minutes Reading

Digital fraud and identity theft cases are rising day by day. In this circumstance, people want greater protection and control over their online identities. And, businesses want more accurate, secure, and consensual methods of verifying stakeholder information.

Generally speaking, in the physical world, you can verify documents by examining them. But, how do you do the same in the digital world? What could be the solution? 

Well, that’s where verifiable credential comes into the picture. So, without further ado let’s discuss what it is, how it works, and what’s its role in cybersecurity.

What is Verifiable Credential in Cybersecurity?

Verifiable credentials, or VC for short, are tamper-evident credentials that can be cryptographically confirmed at the most fundamental level.

Verifiable credentials must have three things in order to be accepted:

  • It can be checked by a machine.
  • It is tamper-evident and secure.
  • Has been issued by a competent authority.

In other words, Verifiable Credentials act as a virtual equivalent to a wallet containing important identity cards like a passport, immunization card, or driver’s license. 

The holder of a VC, however, has the authority to control the data properties because the verification process is conducted digitally. Although establishing a direct line of contact between a business and its stakeholders, this mainly automated approach saves time for everyone. That may be an essential first step in building trust.

Now, let’s move further and see how VCs work.

Verifiable Credentials – Know Its Ecosystem

A verifiable credential ecosystem consists of three entities:

  • Issuer
  • Holder
  • Verifier

The entity that issues the credential is known as the issuer; the entity for whom the credential is issued is known as the holder; and the entity that verifies if the credential satisfies the requirements of a VC is known as the verifier.

Let’s explore these three entities in detail.


An organization that has the right to issue credentials is known as an issuer. These issuers frequently include governmental agencies, hospitals, banks and other financial institutions, educational institutions, and perhaps even businesses that offer job documentation.

These entities demonstrate their authority to provide credentials using a variety of techniques, including digital signatures and unique schemas.


A holder is a person who has full authority over the credential’s management, including deciding who can use it and when it can be shared or canceled. Holders might be either people or organizations.

Since the holder is the owner of the credential, it is their responsibility to compile the data given by one or more issuers into a verifiable presentation that complies with the established requirements.


A verifier is an organization that checks credentials to make sure they are authentic, were issued by a reputable party, and are still in force (not expired or revoked). The verifiable presentation is removed from the bearer and examined by a verifier to ascertain its validity.

Workflow of Verifiable Credentials

Now that you know the three entities of the ecosystem, let’s proceed and understand the workflow.

verifiable credential

A document is sent to the holder after being digitally signed by the issuer. The next step is for the holder to produce a verifiable presentation in a specific format that complies with W3C criteria and transmit it to the verifier for validation.

Decentralized Identifiers are also used in current commercial W3C Verifiable Credential installations (DIDs). In the VC ecosystem, DIDs can be used to identify a variety of entities, including issuers, holders, and verifiers.

In order to confirm the three features of the credential—competent authority, validity, and tamper-evident feature—the verifier lastly compares the presentation to the standards. If all three conditions are met, the credentials are declared validated, and the verifiable presentation is provided back to the holder.

The holder could start the process in another potential workflow. Let’s imagine a bearer is a person who wishes to fly, but the airline only allows those who have had the COVID-19 vaccination. In this scenario, the holder asks the issuer for information and then sends it to the verifier for confirmation. The bearer can send the credentials to the airline firm when they have been verified.

A request for information from the holder can also be made by the verifier, and the holder will then contact the issuer to send it.

As you can see, the foundation of venture capital is trust, and the success of any VC-based system depends on how well this foundation is handled. Although we will discuss the various facets of a VC, here is a straightforward illustration to help you understand what a VC is and how it builds trust.

Another important factor is how many organizations collaborate to use the available data together. They manage the available data using tools and data standards that have been agreed upon, setting the groundwork for a shared data registry.

Understand Verifiable Credential With an Example

To better comprehend the verifiable credential ecosystem and how they relate to one another, let’s look at an example.

Imagine that a medical facility certifies that a certain person has received the COVID-19 immunization and that a machine verifies the accuracy of this information.

In this case, the healthcare provider is the issuer, the person who received the vaccination is the holder, and the verifier is a device that authenticates the verifiable presentation. The holder is free to share it with anyone when it has been validated.

How Do Verifiable Credentials Provide Value and Increase Trust?

Credentials that can be verified make consumers feel respected and give organizations peace of mind regarding the safety and effectiveness of user experiences. For instance, a mortgage provider can confirm an applicant’s financial standing while honoring their request to keep certain information secret. 

An international manufacturer can host an in-person customer event and confirm that guests have received a COVID-19 vaccination or test. Consider a hospital that wants to confirm a doctor’s medical credentials. Only this one piece of information can be directly and securely validated thanks to VCs. The prospective employee will have a better user experience as a result, and the foundation for future trust is laid.

Cases Where Verifiable Credentials Can Be Used

Let’s look at some of the use scenarios where VCs can be used now that you have a better understanding of what they are.

  • Travelers’ visas are still valid
  • Medical licenses, particularly COVID-19 tests
  • Flight tickets
  • Secure document transfers for passports and driver’s licenses issued by the government
  • Checking credit ratings before applying for a loan
  • Credentials needed to open a bank account or make payments
  • Sharing residency information for relevant government programs, among other things

For any kind of cybersecurity-related assistance, feel free to contact our subject matter experts.


Q- What are verifiable credentials?

Digital attestations representing information about a subject (an individual or entity) are known as verifiable credentials. These passwords can be exchanged and validated in a decentralized, private manner since they are cryptographically signed.

Q- How do credentials that are verifiable operate?

Verifiable credentials generate tamper-evident, cryptographically secured documents using distributed ledger or blockchain technology. They can be shown to others for verification, are issued by reputable organizations, and are kept in digital wallets.

Q- What do credentials that can be verified serve as?

Verifiable credentials lessen the need for centralized identity authority while boosting privacy and security by empowering people to own and manage their digital identities and share information with others only when necessary.

Q- What distinguishes traditional credentials from verifiable credentials?

Conventional credentials, such as tangible identification cards and diplomas, are granted by centralized authorities and are based on paper. Verifiable credentials are more tamper-proof and privacy-friendly since they are digital, portable, and cryptographically secure.

Q- Can credentials be verified? Are they safe?

Strong security is a design feature of verifiable credentials. To guarantee the integrity and privacy of the data, they employ decentralized technologies and robust encryption.

Q- With verifiable credentials, what standards are associated?

Designing and implementing verifiable credentials requires adherence to standards such as the W3C Verifiable Credentials Data Model and Decentralised Identifiers (DIDs).

Q- How can I begin using credentials that can be verified?

Start by looking into developer resources and open-source projects pertaining to verified credentials and decentralized identities. Use libraries and systems that facilitate these technologies.