Advancing Identity Management with Blockchain Technology

Published by : Mudit | Feb-05-2021

blockchain for digital identity management (1)

  • The blog post highlights the challenges associate with today’s identity management systems, such as not being secure, efficient, and sustainable enough. As a solution, it proposes considering blockchain app development for streamlining digital decentralized identity management.

    Digital Identity Management | Challenges

    Millions of people come online every day. They conduct various activities, ranging from researching an academic topic, shopping for new goods, and dropping comments on social media sites to carrying out various financial transactions.

    Many online purchases require individuals to reveal particular personal details before accessing services. For instance, users often need to enter their sign-up/login information, including financial and personal data, to execute financial transactions on sites like Amazon Pay, PayPal, and Google Wallet, among others.

    Our information is spread across various internet databases whenever we disclose this information online. Due to this, through these multiple channels, digital copies of the same person spring into being.

    Inefficient Consent Management

    The majority of systems in place rely heavily on individual data collection without an owner’s knowledge. Furthermore, without the owner’s permission, centralized systems share the information stored in these online databases with third parties.

    It often happens in a user’s interest or service, like suggesting relevant goods and services. However, the fact that it does not obtain a user’s consent and the power remains in the hands of those who own the database does not alter. Seeking permissions from users to ask whether they want their information shared with other people or not is non-existent.

    Also, Read |  Blockchain Based Identity Management System

    Blockchain for Identity Management

    Businesses can form a blockchain network that protects user identities while significantly reducing fraudulent activities. Technology can enable companies to develop robust blockchains that automate the authentication and reconciliation problems across various industries. Also, it gives people the ability to create encrypted digital identities that can replace several usernames and passwords with robust security features. It saves valuable time and money for consumers and organizations. On a blockchain network, individuals can establish a self-sovereign identity.

    self-sovereign identity refers to an identity that empowers individuals to create, manage, and control their information themselves. Such an identity is difficult to steal from a person. It deals with the problem of identity theft that is prevalent in the conventional identity management system.

    The use of permissioned blockchains may also include a decentralized registration mechanism. It means that an individual can obtain an identity that is not dependent on any centralized authority. Thus, no third party can regulate or deal with it without the permission of an individual.

    blockchain for digital identity management

    Also, Read | Empowering Digital Identity Management With Blockchain

    Advantages of a Blockchain Digital Identity Platform

    To access products/services, organizations achieve the right to determine when and what data they exchange with other entities. Entities have full control over their identity transferability, confidentiality, and authentication, making communication with other entities more secure.

    Who will be the Participants

    To access products/services, organizations achieve the right to determine when and what data they exchange with other entities. Entities have full control over their identity transferability, confidentiality, and authentication, making communication with other entities more secure.

    Identity Subject

    An entity that needs to prove its identity, maybe a person seeking identification and certificates or an agency seeking licenses and permits or performance and safety equipment 


    A permissioned organization that grants identity credentials to the owner of an identity 


    An individual that verifies an identity before approving it to access services

    Blockchain-identity management solution

    How will it Work 

    As verifiable credentials, approved issuers may grant identity information to identity owners. The identity details in verifiable credentials will comprise a user’s KYC information. Verifiers create a verification template that, together with the list of issuers encapsulated in a QR code, calls out the details. An individual scans the QR code, and the wallet retrieves the applicable credential.

    As required, he selects unique attributes/claims from the credentials. Without making a verifier reach out to the issuer, blockchain technology allows the verification of an issuer’s credential validity, an individual’s ownership of statements, and more. Indeed, it expedites verification processes as well as business efficiency.

    Also, Read | Digital Identity Management with Hyperledger 

    Advantages for Stakeholders

    For Individuals / Organisations / Computers

    Without displaying any tangible records, certain organizations can prove who they are in the digital as well as the physical world. They have ownership over their identity and can determine what and to what degree knowledge is exchanged. The program is comfortably portable.

    For Issuers of Identity

    Issuers will avoid the issuance of physical records, eliminating data manipulation and fraud, as well as minimize operating costs.  On the blockchain ledger, released information is processed, allowing verifiers to verify information provided by identity holders. Identity issuers may revoke issued credentials if any inconsistencies are identified. For time-bound Verifiable Credentials, during the issuing process, issuers may mention validity information.

    For Verifiers of Identity

    By reducing the time and expense needed for the management of Identity and Access Management systems, verifiers will concentrate on service delivery.
    They will do away with gathering physical records, reducing the processing time for services to be rendered. To exchange mutually beneficial data, they can collaborate with ecosystem players.

    Also, Read | Benefits of Digital Identity Management With Blockchain

    Use Case | Healthcare 

    Following her most recent physical exam, Alice Garcia wants to get bloodwork done. Her doctor sent her an order to take her to a nearby clinic for blood tests. Let’s see how a Decentralized Identity Network might be used by Alice to make the process simpler and more secure for her, protecting her identity seamlessly.


    Alice arrives at the clinic and the order, her proof of insurance, and her driver’s license must be issued. The participants will be… In a Decentralized Identity Network

    • The Motor Vehicle Department (DMV)
    •  Alice
    • Office of her doctor
    • Clinic
    • Her insurance company for healthcare

    In her digital wallet, provided by the insurance provider and DMV, Alice has her insurance and driver’s license credentials After her physical, Alice’s doctor’s office provides a bloodwork order digital certificate Alice visits the clinic for her bloodwork, providing her insurance, driver’s license and blood work order credentials The clinic verifies the credentials of Alice and performs blood work.

    The team of blockchain experts will provide you with detailed knowledge of how the characteristics of the blockchain will change the digital identity management field.

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