Decentralized Identity and Authentication: The Next Evolution in Cybersecurity
As cyberattacks grow more sophisticated and data breaches more frequent, the traditional digital identity systems we rely on are crumbling. In 2024 alone, over 5 billion records were exposed globally, sparking widespread concerns over identity theft and eroding public trust in centralised authentication systems. From financial services to social media platforms, users are increasingly vulnerable—because control over identity lies in the hands of third parties, not the individuals themselves.
This alarming trend has triggered a critical question: Is it time to reimagine how we define and manage digital identity? Welcome to Decentralized Identity and Authentication: The Next Evolution in Cybersecurity—a transformative movement reshaping the very fabric of trust in the digital world.
Why Digital Identity Needs a Revolution
Over the past two decades, digital identity has evolved dramatically. What began as simple login credentials has morphed into complex profiles stored across numerous databases—from banks and hospitals to ecommerce platforms. While this digital expansion offers convenience, it has also introduced new data privacy challenges. Every centralised system is a potential honeypot for cybercriminals.
In traditional models, identity verification is tightly coupled with central entities—governments, corporations, or cloud platforms. These entities collect, store, and manage your personal data. Unfortunately, this centralisation creates a single point of failure. If the server is hacked, every user in the system is at risk.
The result? A broken trust loop. Users have little control over their data, little transparency into how it’s used, and even less assurance of security. The cost of this imbalance is growing exponentially—both in monetary losses and consumer confidence.
🔍 According to IBM’s 2023 Cost of a Data Breach Report, the global average cost of a data breach reached $4.45 million, with the identity layer being a primary attack vector.
The Risks of Centralised Control
In centralised identity systems, the user is not the owner of their data. Instead, identities are fragmented across platforms, duplicated, and sold—often without consent. This model opens the door to:
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Mass data leaks due to cloud misconfigurations
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Credential stuffing attacks using breached data
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Phishing and impersonation fraud, targeting vulnerable systems
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Regulatory fines for non-compliance with evolving privacy laws
As digital ID systems become increasingly integral to everything from e-banking to e-voting, the risks of central control can no longer be ignored. The issue is not just technological—it’s philosophical. Who should own your identity?
Toward a Decentralised Future
The shortcomings of traditional systems have sparked a global movement toward decentralisation—a model where users regain control of their identity through self-sovereign frameworks, cryptographic proofs, and blockchain-based architectures. In this model, no single entity has full access or authority over user credentials, significantly reducing the risk of identity theft and surveillance.
At EmporionSoft, we believe decentralisation represents not just a security upgrade, but a fundamental shift in how we build trust online. Our services are designed to support organisations transitioning toward privacy-first, resilient digital infrastructures that reflect the future of identity.
The journey toward secure, user-owned digital identity has begun. And Decentralized Identity and Authentication: The Next Evolution in Cybersecurity is at the forefront of that revolution.
In the next section, we’ll dive deeper into what decentralised identity means—its core principles, mechanisms, and why it’s poised to become the new standard for digital trust.
Understanding Decentralized Identity in Modern Cybersecurity
In an era where identity security is central to digital life, the flaws of centralised identity systems are increasingly clear. Enter decentralised identity—a groundbreaking approach that empowers individuals to own and control their personal data, rather than entrusting it to third parties. At the heart of Decentralized Identity and Authentication: The Next Evolution in Cybersecurity, this model is set to revolutionise how we verify identities, access services, and maintain privacy.
Unlike traditional systems, where login credentials and user data are stored in a single location, decentralised digital identity distributes this information across secure, encrypted networks. The user becomes the sovereign holder of their data, deciding when and with whom to share it. This shift not only improves security but also fosters a future where privacy is the default—not the exception.
Key Components of Decentralised Identity
To understand how decentralised identity works, it’s essential to explore its core components: DIDs, verifiable credentials, and zero trust architecture. Together, these elements form a secure, interoperable framework.
🔐 Decentralised Identifiers (DIDs)
A Decentralised Identifier (DID) is a new type of globally unique identifier that does not rely on a central registry or authority. Instead, DIDs are cryptographically verifiable and stored on distributed ledgers or blockchains. Each DID is controlled by the user through private keys, allowing them to prove their identity independently. This enables user-owned credentials, reducing reliance on passwords and central verification systems.
👉 W3C’s DID specification outlines the foundational standards enabling decentralised identifiers to function securely across different platforms. (DoFollow)
📜 Verifiable Credentials
Verifiable credentials are digital statements issued by a trusted authority and held by a user. These credentials can represent anything from a passport to a university degree and are cryptographically signed to prevent tampering. Users can selectively disclose parts of their credentials when needed, preserving privacy while maintaining authenticity. For example, a user could prove they are over 18 without revealing their birthdate.
This granular control is a major leap forward in identity security, eliminating unnecessary data sharing and mitigating the risk of identity theft.
🔒 Zero Trust Identity
The decentralised model aligns naturally with zero trust architecture—a security approach that assumes no entity is trustworthy by default. Each interaction is verified cryptographically, regardless of location or role. In this system, access is granted based on proof, not trust, making it ideal for high-risk industries like finance, healthcare, and government.
Why This Matters Now
With cyberattacks becoming more advanced and regulation around data privacy tightening globally, decentralised identity is no longer a theoretical concept—it’s a practical necessity. For enterprises, adopting this model enhances compliance, reduces breach risk, and builds customer trust. For individuals, it offers autonomy, privacy, and peace of mind.
At EmporionSoft, we actively explore these advancements to help clients stay ahead of evolving digital identity trends. If you’re ready to modernise your infrastructure, our team offers expert consultation services tailored to your cybersecurity goals.
As we shift from centralised control to individual empowerment, Decentralized Identity and Authentication: The Next Evolution in Cybersecurity becomes more than a buzzword—it becomes a blueprint for the future. In the next section, we’ll uncover how blockchain technology fuels this transformation and why it’s central to building trustless, tamper-proof identity frameworks.
The Role of Blockchain in Identity Authentication
As the world grows more connected, the need for trusted digital authentication has never been greater. Centralised identity models, while once sufficient, now struggle to keep pace with growing demands for privacy, control, and interoperability. Enter blockchain identity—a breakthrough innovation that underpins the transition to Decentralized Identity and Authentication: The Next Evolution in Cybersecurity.
Blockchain’s immutable, distributed nature makes it an ideal foundation for digital identity solutions. Instead of storing personal data on a central server, blockchain networks record only cryptographic proofs and decentralised identifiers. The result? A tamper-proof, user-controlled identity that can be independently verified without revealing sensitive information. This paradigm gives rise to a new standard: Self-Sovereign Identity (SSI).
From Centralised Trust to Self-Sovereignty
Self-Sovereign Identity (SSI) is more than just a concept—it’s a framework that places users at the centre of their digital lives. With SSI, individuals create and control their own identities, storing credentials locally or in secure digital wallets rather than with third-party providers. These credentials can be selectively disclosed and verified in real time using cryptographic signatures.
Let’s break down how it works:
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A trusted authority issues a verifiable credential, such as a digital driver’s licence.
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This credential is stored in the user’s digital wallet.
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When verification is required—say, during online registration—the user presents only the necessary data.
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The verifier checks the cryptographic proof against the blockchain, confirming the credential’s validity without accessing the original data.
This model eliminates the need to place blind trust in intermediaries. The blockchain acts as a trustless infrastructure, where verification doesn’t rely on a central entity but on immutable credentials distributed across the network.
🔗 Learn how Microsoft’s Decentralized Identity platform is leading the way in SSI deployment. (DoFollow)
The Business Case for Blockchain Identity
Organisations are increasingly turning to blockchain to future-proof their identity systems. With benefits ranging from data minimisation and GDPR compliance to reduced fraud and seamless KYC (Know Your Customer) processes, SSI solutions offer compelling ROI.
Here are just a few examples:
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Financial services use blockchain for identity verification in high-value transactions.
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Healthcare providers offer patients portable, privacy-preserving health records.
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Educational institutions issue tamper-proof diplomas and certificates.
To explore these innovations in action, visit our case studies showcasing how EmporionSoft is helping clients integrate blockchain-driven identity solutions. Whether you’re building a B2C platform or securing enterprise workflows, our services offer tailored solutions to meet your compliance and cybersecurity needs.
Trust Redefined
What makes Decentralized Identity and Authentication: The Next Evolution in Cybersecurity so transformative is its redefinition of trust. Blockchain replaces traditional intermediaries with mathematically verifiable systems, ensuring data integrity without compromising privacy. In doing so, it paves the way for a new generation of digital interaction—one where users hold the keys, and trust is no longer a leap of faith, but a cryptographic certainty.
In the next section, we’ll examine how decentralised identity systems outperform their centralised counterparts—offering unmatched privacy, resilience, and user control.
Why Decentralised Beats Centralised Identity Systems
In today’s digital world, users interact with dozens—if not hundreds—of online services that require identity verification. Yet each of these systems is typically built on centralised frameworks that store user data in massive databases, ripe for exploitation. The consequences are severe: data breaches, identity theft, regulatory penalties, and a profound erosion of user trust.
This is where Decentralized Identity and Authentication: The Next Evolution in Cybersecurity emerges as a game-changer. By removing the central authority from the identity equation, decentralised systems empower users with user-centric authentication, eliminating many of the systemic vulnerabilities that plague legacy models.
Privacy, Control and Resilience
Centralised systems, no matter how secure, suffer from one critical flaw: they represent a single point of failure. A single server compromise can lead to the exposure of millions of records, as seen in numerous high-profile breaches over the past decade.
In contrast, decentralised identity models are designed to be resilient, scalable, and privacy-first. The following benefits showcase why this architecture is rapidly gaining momentum:
✅ User Control:
Users manage their own identity through cryptographic wallets. They decide what information to share, and with whom.
✅ Enhanced Privacy:
Verifiable credentials enable selective disclosure—only necessary data is shared, protecting sensitive personal details.
✅ Greater Security:
No central database means there’s nothing for hackers to breach at scale. Identities are cryptographically protected and distributed.
✅ Scalability & Interoperability:
Decentralised frameworks can interoperate across borders, sectors, and systems, reducing vendor lock-in and streamlining onboarding.
✅ Cost Reduction:
Organisations save on data storage, compliance, and fraud-related costs by leveraging blockchain-based identity protocols.
This model doesn’t just protect users—it enhances organisational agility. As compliance requirements such as GDPR and eIDAS tighten globally, decentralised identity provides a scalable solution to navigate complex privacy landscapes.
🔗 According to McKinsey (DoFollow), digital ID systems that prioritise user control and privacy could unlock economic value equal to 3–6% of GDP in emerging markets alone.
A Privacy-First Identity Strategy for the Future
By shifting toward a resilient ID architecture, organisations gain more than just security—they earn the trust of their users. Trust is the new currency in the digital economy, and users increasingly prefer platforms that put them in control.
At EmporionSoft, we understand that privacy isn’t just a compliance requirement—it’s a competitive advantage. That’s why we help clients implement privacy-first, decentralised identity systems that are robust, cost-effective, and future-ready.
If your organisation is ready to modernise its identity strategy, get in touch with our expert team. We’re here to guide you through every stage of your digital transformation.
In the next section, we’ll examine how decentralised identity is already transforming real-world industries—bringing security, efficiency, and transparency to sectors like finance, healthcare, and education.
Real-World Impact of Decentralised Identity Solutions
As the theory behind Decentralized Identity and Authentication: The Next Evolution in Cybersecurity takes shape, it’s becoming increasingly evident that real-world adoption is already well underway. From improving compliance in banking to enabling privacy in healthcare, decentralised identity frameworks are transforming how organisations across sectors manage authentication, data access, and user verification.
These systems are more than a technological upgrade—they represent a profound shift toward privacy-preserving login systems and user-first digital experiences. Below, we explore how decentralised identity is being applied in key industries.
From Banking to Healthcare: The Transformation Has Begun
💳 Finance: Reinventing KYC and Onboarding
Financial institutions face constant pressure to improve KYC (Know Your Customer) procedures while maintaining compliance and reducing fraud. Traditional KYC is costly, repetitive, and often requires users to share excessive personal information.
With KYC using blockchain, customers can present verifiable credentials that prove identity, income, or address without disclosing unnecessary data. These credentials are cryptographically secured and reusable across banks, reducing friction and onboarding time.
✅ Example: Several European banks, in partnership with the European Self-Sovereign Identity Framework (ESSIF), are exploring blockchain-based identity wallets to streamline regulatory compliance.
🏥 Healthcare: Securing Patient Data with Verifiable Credentials
In healthcare, decentralised identity addresses the long-standing issue of fragmented patient records and privacy breaches. Using verifiable healthcare credentials, patients can own their medical history in a secure, portable format.
This means healthcare providers can access critical information when needed—without relying on centralised databases vulnerable to attack. It also enhances consent management, empowering patients to choose what data is shared and with whom.
✅ Example: IBM’s Digital Health Pass (DoFollow) leverages blockchain to offer secure, shareable proof of health status, enabling safe access to workplaces, schools, and public venues.
🏛️ Government: Enabling Trusted e-Governance
Governments are under increasing pressure to digitise citizen services while respecting data sovereignty and privacy laws. Decentralised identity enables trusted digital IDs for accessing public services—from tax filing to social welfare—without the risk of surveillance or identity theft.
Governments in Estonia, Canada, and the UK have launched pilots using decentralised frameworks to issue digital IDs, allowing citizens to authenticate across multiple agencies using a single identity.
🎓 Education: Issuing Tamper-Proof Academic Credentials
Academic institutions are adopting blockchain identity solutions to issue degrees, certificates, and transcripts. These credentials are immutable, instantly verifiable, and cannot be forged—eliminating the need for manual validation and significantly reducing fraud.
Students can store achievements in a digital wallet, presenting them to employers, universities, or credentialing bodies as needed.
🛒 eCommerce: Frictionless Yet Secure Shopping
Retailers are integrating privacy-preserving login systems that allow users to authenticate using decentralised credentials—without sharing passwords or emails. This approach reduces cart abandonment and enhances customer trust.
With decentralised identity, repeat customers can enjoy personalised experiences while maintaining control over their data.
The Value Is Real and Growing
These use cases highlight how Decentralized Identity and Authentication: The Next Evolution in Cybersecurity is solving real-world problems. Across industries, organisations are turning to this model to enhance security, ensure compliance, and deliver user-first experiences.
At EmporionSoft, we build decentralised identity solutions tailored to your sector’s needs. For deeper insights into our work, visit our insights page and discover how we’re shaping the future of digital identity—today.
Addressing the Challenges in Decentralised Identity
While Decentralized Identity and Authentication: The Next Evolution in Cybersecurity presents a promising future for digital trust, the road to widespread adoption is not without obstacles. From navigating complex regulatory frameworks to achieving seamless ID interoperability, organisations must overcome several technical, legal, and governance-related challenges.
These hurdles aren’t just theoretical—they impact real-world deployments and delay mass adoption. Understanding and addressing these barriers is critical for building scalable, resilient, and compliant decentralised identity ecosystems.
Privacy, Standards, and Global Adoption
🛡️ Data Privacy and GDPR Compliance
One of the most pressing challenges is aligning decentralised identity systems with digital identity compliance requirements, particularly the EU’s General Data Protection Regulation (GDPR). Under GDPR, individuals must retain full control over their personal data, which aligns well with the principles of decentralised identity. However, concerns remain around how blockchain—an immutable ledger—can support data deletion (the “right to be forgotten”).
Organisations looking to adopt decentralised models must therefore balance transparency with compliance. Mechanisms such as off-chain storage, zero-knowledge proofs, and selective disclosure are being explored to bridge this gap.
🔗 For detailed regulatory insight, refer to GDPR.org’s guidance on blockchain and data privacy (DoFollow).
🌐 Lack of Interoperability
The second major challenge is the lack of universal standards across identity platforms. Without ID interoperability, users cannot carry credentials from one system to another, limiting scalability and user convenience.
This is where initiatives like the Decentralized Identity Foundation (DIF) and EBSI (European Blockchain Services Infrastructure) play a vital role. These global consortia are developing protocols and frameworks to ensure different decentralised identity networks can communicate securely and efficiently.
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DIF promotes open standards for identifiers and verifiable credentials.
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EBSI is building a pan-European identity framework to support public services across EU member states.
These initiatives mark a crucial step toward decentralised governance—a model where control over identity systems is distributed across public and private entities working collaboratively.
⚙️ Technical Complexity
Implementing decentralised identity solutions requires advanced cryptographic infrastructure, secure key management, and robust wallet interfaces. These systems must be easy to use, even for non-technical users, to ensure adoption at scale.
Businesses must also contend with:
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Choosing suitable blockchains or hybrid models
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Integrating with legacy systems
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Educating end-users on how to manage their credentials securely
At EmporionSoft, we help businesses navigate these challenges through expert consultation and custom development services. Our team ensures your decentralised identity infrastructure is compliant, interoperable, and user-friendly from day one.
Embracing the Shift Responsibly
The transition to decentralised identity is not merely a technical upgrade—it’s a strategic shift that requires thoughtful planning and global coordination. As standards evolve and new frameworks emerge, businesses that take early action will be well-positioned to lead the next era of digital trust.
In the next section, we’ll look to the future—examining the key trends, technologies, and global movements that are shaping what comes next for decentralised identity and authentication.
The Road Ahead for Decentralised Identity
As digital ecosystems become more complex and privacy becomes a global imperative, Decentralized Identity and Authentication: The Next Evolution in Cybersecurity is no longer a theoretical vision—it’s the blueprint for the next generation of secure digital interactions. The coming years promise rapid advancements in decentralised identity technologies, driven by innovation in AI, blockchain, biometrics, and Web5 architecture.
These developments will define how individuals prove who they are online, while retaining control over their personal information. For organisations, keeping pace with these identity trends 2025 is not just a matter of staying relevant—it’s about building systems that align with the future of trust, compliance, and customer experience.
Emerging Tech and Standards to Watch
🔍 Biometric-Linked Decentralised Identity
Biometric authentication—such as fingerprint, facial recognition, and retina scans—is increasingly being integrated into decentralised identity wallets. This approach offers seamless, secure access to verifiable credentials while eliminating reliance on passwords.
When biometrics are combined with decentralised technologies, users gain enhanced protection. Identity theft becomes virtually impossible, as credentials are stored cryptographically and access is tied to unique physical traits. The result is a next-gen authentication model that prioritises both user convenience and zero-trust security.
🌐 Web5 and the Rise of User-Owned Data
The evolution from Web3 to Web5 identity frameworks, championed by open-source initiatives like TBD (a Block subsidiary), signifies a bold leap toward full user ownership of digital presence. Unlike Web3, which emphasises decentralisation through blockchain, Web5 aims to marry that decentralisation with intuitive identity layers—ensuring users can own, control, and port their identity across platforms without intermediaries.
This architecture will power use cases such as:
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Cross-platform credential portability
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Peer-to-peer identity verification
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Identity-linked decentralised apps (dApps)
🧠 AI-Enabled Identity Verification
Artificial Intelligence (AI) is also shaping the future of decentralised identity. By using AI for dynamic fraud detection, behaviour-based access control, and document verification, identity systems become more adaptive and efficient.
Smart algorithms can identify anomalies in user behaviour, reducing the risk of fraud without increasing friction for legitimate users. When layered with decentralised identity structures, AI ensures verification processes are both intelligent and privacy-preserving.
🔐 Zero Knowledge Proofs (ZKPs)
Zero Knowledge Proofs are cryptographic techniques that allow one party to prove something to another without revealing the underlying information. In the context of decentralised identity, ZKPs enable users to prove they meet certain criteria—such as being over 18 or holding a valid degree—without exposing their birthdate or academic records.
ZKPs support the growing demand for minimal disclosure and privacy-first architecture. As standardisation progresses, expect ZKPs to become a staple of next-gen authentication systems.
🔗 According to the World Economic Forum (DoFollow), decentralised identity combined with cryptographic innovations will shape the infrastructure of future digital economies.
Preparing for the Future
The decentralised identity ecosystem is moving quickly, supported by Big Tech players like Microsoft and IBM, and global consortiums like DIF and the Trust Over IP Foundation. Their collaboration ensures standards are developed in the open and tailored for real-world adoption.
At EmporionSoft, we help forward-thinking organisations future-proof their identity systems using decentralised technologies that are scalable, compliant, and secure. Explore our case studies to see how we’re implementing next-generation identity infrastructure across industries.
In our final section, we’ll wrap up this exploration with a clear roadmap forward and show how EmporionSoft can help your business lead the decentralised identity revolution.
Decentralised Identity: Your Competitive Edge in Cybersecurity
The digital world is evolving at lightning speed, and with it, the expectations around privacy, security, and data control. As explored throughout this guide on Decentralized Identity and Authentication: The Next Evolution in Cybersecurity, traditional identity systems—centralised, siloed, and vulnerable—are no longer fit for purpose.
Decentralised identity is not just a technical innovation; it’s a strategic enabler for businesses that value trust, compliance, and user empowerment. By shifting control from institutions to individuals, decentralised models deliver user-centric authentication, robust data protection, and an architecture that’s built to scale with global demands.
Key insights from this exploration include:
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Privacy and Control: Decentralised systems place data ownership in users’ hands, ensuring consent and minimising overexposure.
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Resilience and Security: Without central databases, risks of mass data breaches and identity theft are drastically reduced.
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Interoperability and Scalability: Through global standards, these solutions work across borders and industries.
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Future-Readiness: From AI to biometrics to Web5, decentralised identity is compatible with tomorrow’s technologies.
In a digital economy where trust is currency, businesses that act now to implement privacy-first, resilient digital solutions will be the ones who thrive.
Partner with EmporionSoft to Build the Future
Whether you’re in fintech, healthcare, education, or government—your digital identity strategy will define your organisation’s success in the years ahead. At EmporionSoft, we specialise in designing and implementing custom decentralised identity architectures tailored to your industry, compliance requirements, and long-term growth plans.
Our solutions are not off-the-shelf—they’re built around your specific needs, combining blockchain innovation with enterprise-grade performance.
Why choose EmporionSoft?
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✅ Deep expertise in secure identity systems and digital infrastructure
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✅ Proven track record across global industries (Explore our insights)
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✅ Strategic consultancy backed by actionable technology
Now is the time to move from theory to execution. Empower your users, protect your data, and lead with confidence.
📞 Ready to begin? Contact us today for a tailored consultation.
🛠️ Or, discover more about our services to see how we’re enabling businesses to unlock the power of decentralised identity.
The future of cybersecurity has arrived. Let’s build it together.
