Blockchain: The Battle To Secure Digital Identities

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A friend of mine recently lost his wallet with all his money, cards and documents in it, of course. He was telling me how difficult and how long is the whole process to receive new documents: queues, lost time, the documents that need to be signed, etc.

So, I started thinking how it is possible that in our modern world is still necessary to make queues in public offices in order to obtain your documents back and verify your identity. How is it possible that it doesn’t happen online?

People don’t have any control over the their identities.

So, without the possibility of reading anything about the exchange of your own identity attributes across the network for authentication, verification, and authorization you can be vulnerable to identity fraud.

I know, this scenario seems to be impossible, something that happens only on the screen (do you remember “The Net” with Sandra Bullock?), but it is not so far from reality because identity data is typically centralized.

This makes identity management, protection and verification very expensive for all the enterprises and government agencies involved in the process, and risky for us.

A solution to my answer should be the blockchain. A few well-known companies such as Deloitte, IBM, and Microsoft started to ask themselves the same question and they are currently developing a few solutions for identity management.

Blockchain technology, in fact, can provide the most important features to enable a digital identity network to work properly. Here’s how:

  • The blockchain is a shared ledger where all the data are stored in a trusted and unchangeable place;
  • In case of the Ethereum blockchain, smart contracts ensure privacy and safety in order to execute each transaction;
  • No need of trust between the users to verify transactions and ensure records are valid;
  • Users can control their identity data and attributes;
  • Dynamic validation and modification of data thanks to smart contracts that are able to update them in real time;
  • Controlled visibility and ability to verify identity without disclosing any data;
  • All users have the same permissions because it is a decentralized system.

This is just an example of the main reasons why identity management can only benefit from the blockchain technology, whether it is the Bitcoin or the Ethereum one; and that’s why the above companies decided to take advantage of this revolutionary tech.

IBM, Deloitte and more

IBM, for example, was one of the first company to study and test the blockchain to solve identity-related issues:

“We predict that this technology will be used to create smarter, more efficient systems for supply chains, Internet of Things networks, gaming, multi-media rights management, car rental, Government proof of identity or license creation and insurance record management”.

Recently, IBM and SecureKey also announced they are working together with the main goal of creating a “new digital identity and attribute sharing network” to make it easier for users to verify their data in a privacy-enhanced, secure and efficient way.

Deloitte is doing a similar project using the Ethereum blockchain. It is an open source based on a smart identity platform available for users and companies that want to obtain, verify and identity credentials when communicating with one another.

This way, customers can create and store identity info such as ID reference, driving license or passport, which can be confirmed by third parties to create verifiable credentials to be used for any digital communication. This Deloitte’s platform provides many opportunities for the automation of identity-related process including customer registration and Know Your Customer (KYC).

Another move in this direction has been made by Microsoft Company that started a partnership with Blockstack Labs and ConsenSys to create an open-source platform for identity management based both on Bitcoin and Ethereum.

“Our goal in contributing to this initiative is to start a conversation on blockchain-based identity that could improve apps, services, and more importantly, the lives of real people worldwide by enabling self-owned or self-sovereign identity”.

Identity-related issues worldwide: a short report According to a recent post published by Microsoft blockchain business strategist Yorke Rhodes III:

  • 1.5 billion people don’t have a proper identification and this makes it difficult to have a bank account or access to education;
  • 1.5B people are without proper identification. This means one-fifth of the world’s population;
  • One in three children under 5 years old does not officially exist because their birth has not been recorded;
  • 230M children under 5 years old have no birth certificate;
  • 50M children are born without legal identity