Why Blockchain-based Identity’s Biggest Obstacle Is The Problem It Solves: Defining Identity

When speaking about digital identity, and in the case of blockchain-based identity, there are many use cases and examples of how identity validation can be made safer and faster than today’s approaches. Those use cases are all exciting and hold tremendous promise for making the world better. But there’s a question that all identity players face at the moment: what’s an identity?

As we debate the best ways to put identity and identity validation on blockchains, we come across challenges in the ways people and organizations understand identity. The concept of identity at first seems simple — an identity is who someone (or something) is. But the reality is much more complicated. Because identity actually encompasses many related concepts.

1. First there is the physical identity (biology and DNA for people, code for software, etc.)

2. Then there is the legal identity — recognition by a government that someone is who they say they are and therefore that person is allowed access to services from the government but also now capable of interacting with other commercial businesses because of their ownership of a legal identity.

3. There is also social identity — someone’s reputation on social media and in other public forums.

4. Work identity includes the examples of one’s work, digital rights, and professional reputation that are available to either a small circle of colleagues of a large circle of one’s industry.

5. Digitized identity, which touches on each of the aspects above, includes all data that represents someone on a computer system. Essentially, how do the websites, bank machines, smart phones, work applications and other computer systems know who you are when you interact with them. Think about passwords and other forms of authentication to prove who you are. (Note, digitized identity isn’t the same as digital identity. Digital identity is another way to talk about identity overall and is often used interchangeably with identity to talk about one or more of these five aspects.)

If you’re following the blockchain identity space, you know that there are many players, all of whom have similar talking points. Why? Because the big issue of needing to prove identity for personal, commercial and governmental purposes is universal. We all need to prove who we are at some level to function in the modern world we live in. So you’ll see the same big picture visions of being able to prove identities simply, protect our data, and to own our own data (self-sovereign identity.) It’s difficult to find anyone who thinks those goals are bad.

What IS difficult, however, is putting all the different aspects of identity into one platform. That’s why despite using the same language, blockchain identity vendors take distinctly different approaches to functionality and purpose. The blockchain identity space mirrors the larger digital identity space in that there isn’t one accepted and commonly used understanding of identity. When the term identity is used, it often means only one of the concepts above and sometimes multiple, but rarely all of concepts as a holistic picture.

For example, if you see security-focused vendors talking about identity management, they often are interested only in validating the digital identity for a computer system — making sure the individual accessing the system has the right to have that access and then making sure the individual doesn’t access anything else. Similarly, some vendors focus on legal identity and smart contracts, effectively focusing on whether an individual can enter into a legally binding arrangement after proving their identity. Some vendors focus on the social reputation — you’ll often see that these vendors have “platform” products that operate very much like Facebook or Twitter where peer awareness is a foundation for validating identity. Other vendors want to focus on the corporate side, and you’ll recognize those vendors by their focus on legal identity and very specific business processes like know-your-customer.

Consumers, companies and the overall market would benefit from a shared understanding of identity that includes all five aspects. That’s why it’s better to focus on building a comprehensive set of tools and a platform to allow that holistic digital identity. And as the market gets more consistent in its definition of identity, you’ll begin to see blockchain-based identity become much more widely adopted.