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As discussed already, conventional identity management presents complexities and difficulties for users in management of their own digital identity. The concept of Self Sovereign Identity or SSI can serve a promising answer in this case with blockchain identity management benefits. The benefits of blockchain identity management could also help in resolving the problems of data security.
Also, individuals will be able to trace the purpose for which their PII has been used. Government institutes, banks, and credit agencies are considered the weakest point in the current identity management system as they are vulnerable to theft and hacking of data. Whether a person needs to apply for a loan, open a bank account, buy a sim card, or book a ticket, identity documents are used.
These implications should underlie the decision-making process for any architectural investments supporting IAM. Identity could also refer to other non-human entities, such as an organization or authority. A playbook for assessing important considerations for multistakeholder collaboration to adopt trusted privacy-preserving digital travel credentials. Regulations on data privacy are getting more stringent globally, making compliance difficult and expensive to manage.
Governments, businesses and educational institutions are turning to blockchain as a proven way to enable a secure and trusted infrastructure and improve services. Every time any company will have to access specific details of a person for authentication purposes, a notification will be sent to the individuals owning the identity. Smart contracts containing the business logic can generate a trust score for a user from the information provided by them while creating a self-sovereign identity. Everyone uses identity documents regularly, which are shared with third parties without explicit consent and stored at an unknown location. A blockchain-based identity could be used to access a building, log in to a computer system, or authorize a transaction. Moreover, with a blockchain-based KYC process, businesses can achieve substantial cost savings and improve customer experiences.
On the other hand, around 60% of the 2.7 billion people in the world without access to banking services own smartphones. Therefore, blockchain-based mobile identity solutions could serve as promising answers for the needs of vulnerable citizens worldwide. If you want to learn more about how our private, distributed ledger supports secure, robust ID management for your organization, read more about Distributed Ledger for Identity. As always, also make sure you sign up for our newsletter to learn more about BlockID and our blockchain ledger technology. However, we want to focus on the latter because the storage and protection of digital identities have become significant challenges for service and application providers.
Blockchain offers a potential solution to the above challenges by allowing users a sense of security that no third party can share their PII without their consent. Since KYC companies have to serve requests of different entities such as banks, healthcare providers, immigration officials, etc., they require more resources to process their needs quickly. Therefore, KYC companies have to charge a higher amount for verification, which is passed to individuals as hidden processing fees. Moreover, third-party companies have to wait for a long time to onboard the customers. Let’s begin by understanding the challenges in the existing identity management system.
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In stark contrast to the traditional centralized model, the decentralized approach hands the reins of identity control back to the individuals or organizations. By removing central authorities, blockchain enables individuals to have greater autonomy and ownership over their own identities, ensuring that they have complete control over who has access to their data. Blockchain technology allows for the provenance of identity, meaning that the origin and history of an individual’s digital identity can be securely recorded and traced on the blockchain. This means that when someone presents their credentials for verification, it can be easily checked against the immutable records stored on the blockchain. The information is auditable, traceable, and verifiable in just seconds, providing a high level of confidence in the authenticity of an individual’s identity.
Traditional identifiers like your legal name or email address rely on third parties—governments and email providers. Decentralized identifiers (DIDs) are different—they aren’t issued, managed, or controlled by any central entity. Once information is added to a blockchain, it can never be completely deleted or altered, which is why it is crucial to never add personally identifiable information on a blockchain. If someone loses a physical document, they will have to go to an office and undergo a time-consuming process to get another proof of ID or digital document. In addition to being able to be reissued more efficiently than physical documents, documents issued as digital Verifiable Credentials are harder to misplace and fake.
Alex will provide the unique ID number to the center, enabling them to submit the request for accessing information. After he validates the request, the education hub can check his documents, and the transaction will be recorded on the blockchain. Suppose a person named Alex needs to authenticate himself to apply for study abroad programs. Thus, the education center can validate his identity quickly because of the blockchain-enabled identity management app. After the user gets ID number, they need to upload the government-issued IDs on the app that will be saved in the IPFS with hashed addresses stored in the blockchain. Once the profile is created, the user will get the unique ID number, which will help organizations access the user’s identification documents.
The decentralized nature of blockchain allows individuals to have full control over their digital identities, eliminating the need for intermediaries to manage and store personal information. Identities anchored on blockchains are inherently safer than identities stored on centralized servers. Decentralized storage solutions, which are tamper-proof by design, reduce an entity’s ability to gain unauthorized data access in order to exploit or monetize an individual’s confidential information. In a still-nascent industry, most IoT technologies do not incorporate appropriate identity and access management capabilities, not unlike the early Internet which consisted solely of trusted institutions. Interconnected internet of things (IoT) devices and objects must identify sensors, monitors, and devices, and manage access to sensitive and non-sensitive data in a secure manner.
This concentration of power has had obvious economic implications and, most relevantly for Blockstack, a profound impact on how personal data is stored, transmitted, and used. Therefore, in this paper we focus on the study of blockchain-based identity management systems, by it consulting rates and fees reviewing recent state-of-the-art advances on the topic. Of the sixty articles found, we only include 50 articles for discussion in this paper. A solution to these problems is the use of decentralized identifiers (DIDs) to log in and access websites, apps, and services.
Decentralized storage is one of the core components of secure identity data management. In a decentralized framework, credentials are usually stored directly on the user’s device (e.g., smartphone, laptop) or securely held by private identity stores. These identities could be created independent of nation-states, corporations, or global organizations.
For example, someone can confirm that they are at least 18 years old to buy alcohol without needing to reveal their birth date. Verifiable Credentials are a digital, cryptographically secured version of both paper and digital credentials that people can present to organizations that need them for verification. Identity documents like passports, IDs issued by the government, and driver’s licenses can be issued as Verifiable Credentials. Unlike a centralized system where only one or a limited group of people can see, alter, and access records of information, with blockchain technology, every computer in the network has a copy of the ledger.
Self-sovereign identities are stored locally on the user’s smartphone or distributed on a blockchain network. Put simply, blockchain technology enables Blockstack’s internet to remain decentralized and secure. A small group of companies gained control over everything from issuing website security certificates to patrolling access to the world wide web to curating individual online identities. This centralization of control allowed these companies to amass huge volumes of personal data, housed on servers, from everyone who uses the internet. These servers can (and, as we know, have) been hacked, and the concentration of personal data in the hands of a small group of companies increases the risk of these similar breaches occurring in the future.