Instead of usernames and passwords, Magic uses blockchain-based public and private keys to authenticate users under the hood. A decentralized identifier is signed by the private key to generate a valid authentication token that can be used to verify user identity.

Traditionally, usernames are publicly recognizable identifiers that help pinpoint a user, whereas passwords are secrets that were created by the user and are supposed to be something only they know.

You can think of public and private keys as materially improved versions of usernames and passwords. The public key is the identifier and the private key is the secret. Instead of being created by users and prone to human error (e.g. weak/reused passwords), the key pair is generated via elliptic curve cryptography that has proven itself as the algorithm used to secure immense value sitting on mainstream blockchains like Bitcoin and Ethereum.

Using blockchain key pairs for authentication gives Magic native compatibility with blockchain, supporting over a dozen of blockchains. This enables blockchain developers to use Magic SDK to provide user-friendly onboarding experiences to mainstream users and tap into the potential of the rapidly expanding blockchain industry that is growing 56.1% year over year and projected to reach $69.04 billion by 2027.

The key pairs are also privacy-preserving (no personally identifiable information) and exportable. This allows user identity to be portable and owned by users themselves (self-sovereignty). The world is already moving towards this direction with novel solutions from companies like Workday and Microsoft.

As a first step, we are committed to enabling a passwordless future, by providing developers with the easiest way to integrate passwordless login methods into their apps, but having blockchain key-pairs actually connects us to other future-proof infrastructure such IPFS for decentralized user identity data storage, which will pave the way towards worldwide adoption of decentralized identity.