Ledger is working on BitID integration for its Ledger Wallet Nano bitcoin hardware wallet, and the login capabilities should be enabled in an upcoming developer API.
BitID is an open-source project for replacing usernames and passwords with cryptographic challenges based on ownership of a particular bitcoin address.
The open protocol could potentially enhance security and convenience for web users when logging into their favorite websites.
In a post on Reddit, Ledger CEO Eric Larchevêque contends, “By using the Ledger Nano as a way to login to a website through BitID, you get the benefit of decentralization, privacy, and [the] highest standards of security.
Solving traditional login problems with BitID
Although the creators of BitID do not claim that the protocol is the perfect solution for authentication on every website, they do see key advantages for using BitID on websites where bitcoin is already used. For example, e-commerce websites, such as the bitcoin-accepting Rakuten, could benefit from BitID in situations where a user is only using bitcoin to make purchases.
Instead of creating a username and password that can be used to view past orders on an e-commerce website, a user could login with the bitcoin address that was used to make a past purchase. This creates a situation where there is no need to create an account on the e-commerce platform, which streamlines the payment process and reduces the amount of friction involved with attracting new customers. Another, similar use case could be the ability to anonymously pay for a news subscription with bitcoin and then login to that news website via a bitcoin address.
Hardware wallets are for more than bitcoin
If someone already has a secure storage device for their bitcoin private keys, then it could also make sense to use that device for other security-related activities. Both Ledger and Trezor would like to see their devices used for more than just bitcoin payments, and in the near future, users may be able to do anything from unlock their password manager to cryptographically sign an email with their hardware wallets. Ledger expects their new BitID-supported API to be available before the middle of April.