Distributed Identity (such as OpenID) and security

Distributed identity systems are hot these days. Open-ID has been around for a while, and Yahoo! just jumped on that bandwagon. Possibly to stick it to Microsoft, who is deploying LiveID. Blogger just started allowing non-Google logins for things like comments.

These systems work by splitting apart authentication (verify who you are) and authorization (what you're allowed to do). Single-Sign-On systems work this way as well, but these systems take that to a much greater scale. Once you've been authenticated by the trusted third party, you are authorized to access the specified resources. In the web domain this is easily handled through cookies.

I noticed this text on the LiveID page I linked to:
Microsoft's Windows XP has an option to link a Windows user account with a Windows Live ID (appearing with its former names), logging users into Windows Live ID whenever they log into Windows.
I did not know that. Shows what I pay attention to. What this tells me is that it is possible to synchronize your local WinXP login with a LiveID. This causes me to glower, because I inherently trust my local system differently than I do miscellaneous web services. Yes, the authenticator is the piece I need to worry about as it is how I get to prove I'm me, and that's just in one spot. But still, one compromised account (my LiveID account) and everything is shot.

Lets take it a bit further. It would probably be easy to get LiveID working inside of SharePoint. Especially since a developer SDK has been released to do just that. This would permit LiveID's access into SharePoint. Handy for collaborating with colleges working for other companies or universities.

Now what if Microsoft managed to kerberize LiveID? That would make it possible to use LiveID to log in against any Kerberos enabled service, as well as almost anything ActiveDirectory enabled. It'd probably take a tree-level (or maybe domain-level) trust established to the foreign tree (LiveID in this case) to make it work, but it could be done. Use LiveID to log into Exchange with Outlook, or map a share. Use your corporate login to work on your Partner's ordering system.

This scares me. In principle, not just because it's Microsoft I'm talking about here. Yes, it can be a great productivity enhancer, but the devil lurks in the failure modes. Identity theft is big business now, and anything that extends the reach of a single ID makes the ID that much more valuable. Social Security Numbers to us Americans are big deals since we can't renumber those, thus we have to protect them as hard as we can. Until we get a better handle on identity theft, these sorts of "One ID to rule them all," systems just make me wince.