Blockchain for Advanced and Secure Digital Identity Management

blockchain for digital identity

  • Digital identity management and verification are likely one of the most promising of the many developing use cases for blockchain technology. Billions of people around the world were harmed by personal data breaches in 2018. More secure means of storing, sharing, and verifying sensitive data are unquestionably needed. In this regard, blockchain solutions development for identity systems might provide useful answers to some of the problems that most centralized databases suffer.

    Identity Management using Blockchain

    Current methods of exchanging personal data and information with businesses and digital platforms expose individuals to privacy risks due to hacking or bad data management. Individuals and businesses can have greater direct control over their private information by using DLT/blockchain in digital identity verification and management. Furthermore, more seamless attestations and direct data exchange can expedite procedures across the digital identity collection, verification, and maintenance lifecycle.

    Also, Read | Advancing Identity Management with Blockchain Technology

    The advantages of a decentralized identification

    Everyone’s benefit

    With highly secure user experiences, you can own and control your digital identity while still protecting your privacy.

    For businesses

    Reduce risk by utilizing electronic data verification and increasing openness and auditability.

    Use Cases | Blockchain for Identity Management

    Verification of Identity

    If there was no feasible alternative to the very susceptible old method of identity verification, the seeming failure to secure users’ login capabilities may be excused. However, given that blockchain’s multi-step, multi-factor identity verification systems have been proved to function and are used by a variety of businesses, It’s difficult to understand why the blockchain authentication approach hasn’t achieved wider acceptance, especially given the risks of stolen identities and credentials.

    Also, Read | Empowering Digital Identity Management With Blockchain

    Solutions for Non-Custodial Login

    With non-custodial logins based on the blockchain, no one organization – such as your company – has authority over your usernames, passwords, or the database that stores them. The previous centralized entity can nevertheless confirm that persons signing in are who they say they are by removing the ‘custodian’ of those credentials and replacing them with public and private keychains for logins.

    Secure Identity Management for the Decentralized Web

    Those who want to see the internet return to a form that is more in touch with real decentralization have looked into how blockchains can help decrease third parties while yet preserving a user’s identity. Instead of handing each site or service their data and credentials again and over again, users might save their data and identities on a blockchain that they could use across the internet. A second concept is based on a similar blockchain that holds the user’s data but allows third parties to access it with their permission. In any case, these proposals offer frameworks for a return to the internet’s original vision: people connecting on a truly peer-to-peer basis with their own identities rather than those of third parties.

    Also, Read | Creating a Blockchain Based Identity Management System

    Self-Sovereign Identity Management

    Self-sovereign identification refers to an individual’s use of their birth certificate, passport, and other identifiers rather than those granted by the government. While this notion will undoubtedly be challenging to put into practice, the blockchain’s capacity to attach a person to their identifiers more than other present technologies implies it will be the technology of choice for proving the authenticity of such self-sovereign ways of identity. Also, a system like this would have made the whole Barack Obama birther saga a lot less newsworthy. Wouldn’t it have been lovely if that had been the case?

    Also, Read | Self-Sovereign Digital Identity with Hyperledger Indy: Control Your Data

    Strengthened Protections for Critical Infrastructure

    As a result, blockchain-based authentication solutions are about more than just personal comfort and security. Ensuring that only authorized staff has access to an electricity grid, air traffic control panel, or another essential control system necessitates next-generation security. Blockchain promises to achieve these objectives. It provides a significant leap forward from existing authentication methods.

    It is true that failure to embrace the strongest possible security measures has repercussions. They can go beyond social concerns and into the domain of national security.

    Secure Identity Management for Internet of Things (IoT) 

    First and foremost, sensitive IoT-derived information about our lives must be safeguarded. Users should have a say over how and to what degree their data is utilized. Blockchain technology does that along with keeping data associated with the Internet of Things secure and free of unethical takeover and manipulation.

    Also, Read | Digital Identity Management with Hyperledger Projects

    Decentralization of User Data Storage

    Blockchain is inherently decentralized. It means the data that large corporations acquire remains available across various points of access server. Blockchain makes it significantly more difficult for would-be hackers to access information by distributing it over several nodes. Indeed, adopting decentralized but secure storage of user data is a step toward safeguarding identities.

    More Applications Made Possible with Biometrics and blockchain

    Mapping physical IDs to digital IDs powered by blockchain enables them to seek new business possibilities as part of a larger ecosystem.

    Traveling in safety and comfort

    Changes the future of international travel…and beyond… by harnessing the potential of blockchain-based digital identification and biometrics.

    Immutable Records of background checks and training

    Reduces background check recurrence and establishes reliable records of education, professional credentials, and licenses.

    Security of Health-related information

    Patients can share and control their health information, allowing them to access healthcare and medication from anywhere.

    Streamlined Know-Your-Customer (KYC) procedures

    Accelerates the Know Your Customer process by obtaining customer agreement through a network of banks’ attestations.

    Insurance or Proof of Ownership

    For example, affidavits proving property ownership become obsolete for insurance or submit taxes.

    Also, Read | Benefits of Digital Identity Management With Blockchain

    Limitations that may exist

    These systems can subject to issues like synthetic identity theft. It is arguably the most challenging obstacle. Synthetic identity is the process of mixing authentic information from many people to create a completely new identity. Because data of a synthetic identity seems correct, some systems can fall prey to thinking the phony ones are real. Criminals frequently utilize this type of assault in credit card fraud. However, we can address the problem by using digital signatures. They ensure that made-up combinations of documents are not acknowledgeable as blockchain entries. A government agency, for example, may give unique digital signatures for each document as well as a single digital signature for all papers registered by the same person.

    Concluding Thoughts

    Despite its flaws and limits, blockchain can revolutionize the way we verify, store, and share digital information. For more information about blockchain’s role and implementation in digital identity management for your business, connect with our blockchain development experts.

About Author

Mudit Kumar (Writer)

Mudit has been working with Oodles since 2017. He writes about technologies that not only disrupt the digital space but also influence the physical world. Initially, he explored revolutionary technologies like ERP (Enterprise Resource Planning) and AI (Artificial Intelligence). Now, he focuses on unfolding the elements of blockchain technology, given its potential and edge over others.


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