The holder of a verifiable credential operates in a triangle of trust, mediating between issuer and verifier. The issuer and holder trust each other, the holder trusts the verifier, and the verifier trusts the issuer. Any role in the triangle can be played by a person, an institution, or an IoT device.
Verifiable credentials (VCs) are digital credentials which follow the relevant World Wide Web Consortium open standards. They can represent information found in physical credentials, such as a passport or license, as well as new things that have no physical equivalent, such as ownership of a bank account. They have numerous advantages over physical credentials, most notably that they're digitally signed, which makes them tamper-resistant and instantaneously verifiable.[1][2]
Verifiable credentials can be issued by anyone, about anything, and can be presented to and verified by everyone. The entity that generates the credential is called the Issuer. The credential is then given to the Holder who stores it for later use. The Holder can then prove something about themselves by presenting their credentials to a Verifier.
^"An Introduction to Verifiable Credentials". verifiablecredential.io.[dead link]
^"What are Verifiable Credentials? | Decentralized Identity Developer Docs". didproject.azurewebsites.net.
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