Why There Is A Need For Blockchain Digital Identity Services
Blockchain based digital identity is your solution to identity thefts and fraudulent activities. It creates self-sovereign identity the control of which stays in the hands of the user.
Digitization has truly made our lives easy, with online services practically ruling our lives. Starting from simple activities like socializing with friends, shopping, food ordering, and booking movie and concert tickets to more complex business and bank transactions, everything happens online these days.
Well, that is one side of the Digital Era story for you. There is, however, the other side with issues like identity thefts and financial frauds, which are major concerns these days. Every time we participate in anything online we are leaving digital footprints or traces behind. That information is accessible by the enterprises and concerned bodies. But the information is also hackable since the security system is not bulletproof.
Here’s where blockchain digital identity comes to the user’s rescue. This fortifies the identity of the user so that no one can access it without their permission for immoral reasons. In this article, we will discuss blockchain-based digital identity and the reasons why we need it.
Flaws in the Identity Management System
The data that we knowingly or unknowingly share online is of great value. It’s how enterprises understand our behavioral patterns and then design their services and products according to that. However, the ways to secure it is not absolute.
Let’s take financial transactions as an example. The completion of an online transaction requires that the individual divulges specific personal information, name, address, financial details, etc. We have all done that while creating a Google Pay Wallet or PayPal account. Now, each time the wallet is used, we are leaving traces of our details in multiple databases, which are guarded by feeble security. Any third party can access this data without the user knowing about it.
Now let’s get to the data privacy part. Enterprises and business organizations that offer products and services to consumers also get access to this data. You enter your bank details when making any financial transaction, the GPS collects your location data when you hire a cab, etc. Most of these platforms will claim that the data is utilized to improve customer experience and so that they can provide you with better service. However, that does not cover the fact that the information is collected without the knowledge of the user. So, the user has no say in the matter whether they want the information to be shared or not.
Can Blockchain Revive and Perfect the Existing Identity Management System?
The good thing about any trending technology is that you can expect it to have answers to most of your problems. Even in cases of identity security, blockchain technology can be really helpful. With blockchain-based digital identity, one can prevent fraudulent activities like identity thefts. It can also help enterprises to authenticate individual information to filter fake ones. The best part is that it will give users the right to create digital identities of their own which will be encrypted, with enhanced security features.
The Self Sovereign Identity
Blockchain-based digital identity services, allows the user to create a self-sovereign identity, which is secured and unalterable. This system has the potential to obliterate the password-protected identity system. An individual can use their self-sovereign identity for any kind of verification.
This level of fortification of information can positively prevent identity thefts. Such an ID needs to have interoperability across multiple online platforms, with the consent from the user.
The self-sovereign identity helps the users to:
- Have control over their identities
- Easy accessibility and information updates, however, there might be a requirement of third party verification in certain cases
- Transfer the information or data
- Choice to keep certain information private
- The option to delete the identity if that is desired by the user
The use of blockchain technology enables self-sovereign identity which further empowers the user with total control and privacy of their personal information. The data or identity created can be shared via a secured and trusted network, and there is no risk of any breach.
Here are a few advantages of blockchain digital identity services:
- Blockchain offers flexibility to the user to have one identity across more than one platform or multiple different identities for separate purposes. The technology will give the user a key for each identity and since there are multiple identities, the user can decide which one to use as per the requirement and situation.
- It allows anonymous authentication of information thus ensuring absolute security. The user won’t need a public key which is vulnerable to security breaches.
- Instead of being controlled and used by big enterprises, you get to control your data at your will and convenience.
- No need to deal with any bureaucratic process to issue documents relevant to one’s identity.
- Fortifies and ensures privacy and security of an individual when compiling information such as intellectual property, medical records, etc. all the while complying with any data protection regulations.
- It allows the user to have one login for multiple different social media and e-commerce platforms. With blockchain-based self-sovereign identity, one can use a single id to access multiple platforms without any interference from a third party body.
- Every financial institution requires the user to complete the KYC process that validates all necessary documents and stores it digitally. Blockchain can simplify this process by listing the digital identity in a shared tamper-proof ledger. With consent from the user, the institutions can access specific data.
Application of Blockhain Based Digital Identity
A few weeks ago SK Telecom of South Korea made a landmark announcement that can usher a new era in the digital identification process. Partnering with other Korean telecom companies like LG U+ and KT along with KEB Bank, Woori Bank, Samsung Electronics and Koscom, they informed about working on a blockchain-based digital identity service.
The project is slated for a 2020 release and will be first put to use in the country’s universities to create SSI or self-sovereign identity for grad students for future reference. There are many companies in place that can help an individual or organization by providing blockchain digital identity services. Certain industry names are already in motion to initiate the blockchain digital identity service.
The California based blockchain development company HashCash Consultants, help their clients to establish their digital identity. Presenting a decentralized approach to identity management, they offer a blockchain based digital identity verification platform.
To sum it up, all issues related to privacy and security of information related to one’s identity can be sorted by using blockchain technology. Such a system empowers the user with more control over the sharing and security of their personal information. It truly makes you the master of your own identity keeping all cyber threats at bay.