Quick Answer
The answer is Decentralized Identifiers (DIDs), the identity verification method that uses a decentralized identity standard in Microsoft Entra Verified ID. This is correct because DIDs, as defined by the W3C, are the foundational building block for verifiable, self-sovereign identity—they allow users to create and control their own identifiers without relying on a central authority, enabling cryptographic verification of credentials. On the MS-102 exam, this concept tests your understanding of how Entra Verified ID aligns with open standards for decentralized identity; a common trap is confusing DIDs with traditional identity providers like Azure AD or federation protocols such as SAML. Remember that DIDs are globally unique, persistent, and resolvable without a central registry—think of them as a “decentralized passport number” that the user owns, not the organization. A quick memory tip: DIDs = Decentralized IDentity, and the “D” stands for “Distributed,” reinforcing that no single entity controls the identifier.
This MS-102 practice question tests your understanding of implement and manage microsoft entra identity and access. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
You are implementing Microsoft Entra Verified ID. Which identity verification method uses a decentralized identity standard?
Decentralized identifiers (DIDs)
DIDs are the core of Verified ID.
SAML 2.0
Why wrong: SAML is for SSO, not decentralized identity.
OAuth 2.0
Why wrong: OAuth is authorization, not identity verification.
Federation with Azure AD
Why wrong: Federation is centralized.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Decentralized identifiers (DIDs)
Microsoft Entra Verified ID is built on open standards for decentralized identity, specifically using Decentralized Identifiers (DIDs) as defined by the W3C. DIDs enable verifiable, self-sovereign identity without relying on a central authority, which is the core requirement for a decentralized identity verification method. This allows users to control their own identifiers and present verifiable credentials that can be cryptographically verified.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
For each option: why learners choose it and why it is or isn't the right answer here.
Decentralized identifiers (DIDs)
Why this is correct
DIDs are the core of Verified ID.
Related concept
Read the scenario before looking for a memorised answer.
SAML 2.0
Why it's wrong here
SAML is for SSO, not decentralized identity.
OAuth 2.0
Why it's wrong here
OAuth is authorization, not identity verification.
Federation with Azure AD
Why it's wrong here
Federation is centralized.
Common exam traps
The trap here is that candidates confuse decentralized identity with federation or token-based protocols (SAML, OAuth), which are centralized by design, and fail to recognize that DIDs are the specific W3C standard enabling self-sovereign identity in Verified ID.
Detailed technical explanation
DIDs are globally unique identifiers that can be resolved to a DID Document containing public keys and service endpoints, enabling peer-to-peer trust without a central registry. In Microsoft Entra Verified ID, the issuer, holder, and verifier interact using the W3C Verifiable Credentials Data Model, with DIDs anchored to a distributed ledger (e.g., ION on Bitcoin) for tamper-evident verification. This architecture supports scenarios like employee onboarding where a user presents a verifiable credential from their university directly to an employer, bypassing any central identity provider.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
A company's IT admin needs to give a contractor read-only access to production logs without sharing account credentials. Using role-based access control (RBAC) and temporary scoped permissions — not a permanent shared password — is the correct pattern. Questions like this test whether you can apply least-privilege access across cloud identity services.
What to study next
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FAQ
Implement and manage Microsoft Entra identity and access — This question tests Implement and manage Microsoft Entra identity and access — Read the scenario before looking for a memorised answer..
The correct answer is: Decentralized identifiers (DIDs) — Microsoft Entra Verified ID is built on open standards for decentralized identity, specifically using Decentralized Identifiers (DIDs) as defined by the W3C. DIDs enable verifiable, self-sovereign identity without relying on a central authority, which is the core requirement for a decentralized identity verification method. This allows users to control their own identifiers and present verifiable credentials that can be cryptographically verified.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Read the scenario before looking for a memorised answer.
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Last reviewed: Jun 24, 2026
This MS-102 practice question is part of Courseiva's free Microsoft certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the MS-102 exam.
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