
ASP.NET Core 5 for Beginners
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Since you integrated with a specific AAD tenant assigned to you, it's easy to perceive it as your identity provider. Microsoft operates on a larger scale though, and on a technical level, you are federating with an external identity provider.
So, what does this actually mean?
Going back to our initial example from the real world, you could say that a passport is an example of federated identity. Even if you are not the entity issuing passports, you trust that there is a good procedure in place by the issuing authority and you accept it as proof of identity. You could choose to not trust this identity and build your own system for verifying that people are who they say they are, but it would most likely be time-consuming and expensive if you even managed to provide the same level of authenticity. How much of a hassle it is to order a passport in different countries probably varies, but just imagine how unfriendly it would be as a traveler...