Method Specification. A UTXO friendly method

BSV DID Method is published on W3C DID Method Registry under BSV https://www.w3.org/TR/did-extensions-methods/

2.1 Purpose

The purpose of this documentation is to specify a DID method for DID issuance and management. This method is aimed to follow W3C specifications. The main differentiator is to feature an enhanced DID Document status update and revocation method that can be implemented in any UTXO blockchain used as the data register. There are several UTXO-based blockchains currently deployed in the industry (Specific examples: Bitcoin, Litecoin, Cardano, Bitcoin Cash, Zcash). The DID method detailed in this documentation can be applied to all UTXO-based blockchains, making it suitable for use across these networks. We are aiming for interoperability and consistency, regardless of the specific underlying UTXO architecture. The advantages are listed below:

• The double spend protection of blockchain means that transaction chains provide an immutable, unique, timestamped sequence of events. We use this to record DID issuance, status update, key rotation, and revocation. UTXO-based blockchains support parallelisation of transaction validation which makes them scalable.

• The digital signatures already present in blockchain transactions are used to provide the DID authorisation system. It supports hierarchical public key infrastructure that establishes governance and hierarchical authorisation over DID issuance, if one needs to have governance or control over DID in a public blockchain.

• The programmability of blockchain transactions means that multi-party authorisation schemes can be easily implemented. For example, by allowing either a DID Controller or a DID Subject to revoke a DID using a 1-of-2 multi-signature scheme in a transaction locking script.

2.2 Intended audience

This specification is intended for software implementers that want to adopt this method for the creation and verification of Decentralized Identifiers. The implementation of this method was chosen to be on the BSV Blockchain due to its low transaction fees, high throughput, and instant transaction verification. But it is understood that it can be implemented in any UTXO-based blockchain. These specifications assume a basic understanding of programming and blockchain technology.

2.3 Scope

The specifications include:

• The use of a public blockchain as a data registry.

• Details and specifications on how to link the public key to a blockchain transaction (Tx).

• Transaction anatomy and a description of the signature structure: a multi-signature for DID issuance and DID Document creation. These signatures are coordinated to the DID Subject and the DID Controller by a component service that creates and manages the DID called a DID manager which is run by an authorized entity. DID issuance can be triggered by any entity, or any wallet connected with the DID manager. The specifications also explain how to link a blockchain transaction to a status check from the DID manager.

This design allows DID status verification to be performed independently of the DID issuer and the DID manager which provides privacy enhancement, as the DID issuer and the DID manager are not aware of the status checks being performed by the verifier. Consequently, users can verify the status of their DIDs without revealing their actions to the issuers, which also increases the privacy in the verification process. This method can be applied universally across different UTXO-based blockchain networks, making it a versatile solution for decentralized identity management.

2.4 Compliance

Our implementation of the DID method can appropriately handle and enforce the issuance, status check revocation, and verification status of the DID and DID Document in accordance with the specifications presented by the W3C, and the DIF .