The Internet Computer Protocol (ICP) has recently introduced a new feature called Verified Credentials (VCs) to enhance privacy in the Web3 ecosystem. This innovation aims to provide secure sharing of personal data, such as qualifications and achievements, without compromising user privacy. Built on ICP's Internet Identity, VCs utilize passkeys for authentication, offering protection against phishing attacks and allowing users to manage their credentials securely.

Verified Credentials are cryptographic digital representations of qualifications and achievements, similar to digital versions of physical credentials. These credentials can be shared with online service providers to verify claims such as age or identity without revealing excessive personal information. VCs operate on ICP's Internet Identity, a decentralized identity platform. Unlike traditional password or seed phrase-based systems, Internet Identity uses passkeys, safeguarding users from phishing attempts.

The first application of Verified Credentials is the Proof of Unique Humanity (PoUH), a feature integrated with OpenChat, a decentralized on-chain messaging app. PoUH employs biometric data like facial, finger, or palm print recognition to ensure a single account per human, thereby eliminating bots and multiple accounts used for fraudulent activities on both traditional and Web3 platforms. This innovation emphasizes ICP's commitment to mitigating online identity fraud and enhancing user control over personal data in decentralized applications.

Verified Credentials allow users to manage identity attributes within their Internet Identity, controlling and reusing their credentials without disclosing personal data to decentralized applications. Users can decide the amount of information shared, such as verifying age without revealing further identity details. This walletless approach protects users' privacy and anonymity while ensuring that users have overall control over their information.

ICP has extended the Web3 capabilities by going beyond traditional blockchain and smart contract frameworks and has incorporated VCs into the Internet Identity (II) system. Internet Identity offers strong user authentication employing the passkeys instead of passwords and, therefore, is more resilient to phishing threats. It also makes it more secure and convenient than usual sign-in mechanisms, which are typically used by websites. The introduction of Verified Credentials marks a significant step in enhancing online privacy and security.