Who’s spending your identity?

Photo by Sharon McCutcheon on Unsplash

At a recent talk that I gave in NYC, I was asked why I think identity is a good use case for blockchain. My answer seemed to strike a chord with a number of attendees so I thought it might be worth sharing more broadly — this is my attempt to do so.

At its core, blockchain/DLT is designed to solve the “double spend” problem, i.e. the fact that digital information is very easy to copy and reproduce. In the case of a real world asset like money, the problem can be framed as — how do you prevent someone from spending the same money twice? The solution is relatively easy in the case of fiat (apart from counterfeiting) because once you’ve handed the cash over, it’s gone.

Bitcoin was designed to solve this problem in respect of digital money or value through an innovation that’s come to be known as “blockchain” technology, which is simply a ledger or record of transactions in sequential order, maintained through a consensus protocol. The digital asset native to the Bitcoin blockchain — bitcoin (small “b”) — cannot be “re-spent” without altering the ledger’s transaction history.

But what about assets that are not native to their respective ledger or chain — i.e. assets that live in the real world? The interesting thing about information that has been digitized is that it all exhibits largely the same properties and it all suffers from the same double spend problem. Herein lies the potential of blockchain to address myriad problems and inefficiencies in a way that older technologies failed.

Turning back to identity — once digitized to constitute “online” or “digital identity,” that identity becomes a digital asset. So what is identity theft or fraud? Fundamentally, it’s someone other than you trying to “spend” your identity or, put differently, more than one party trying to use the same identity twice. Viewed this way, it’s clear that identity fraud is simply a double spend problem.

This is where the promise of blockchain and blockchain-based self-sovereign identity solutions come into play. This should also give us perspective on the limits of the technology in respect of digital identity. While the blockchain may be ideal for addressing double spend, different technologies may be better suited to solving other identity-related challenges, in particular around privacy and autonomy.

Elizabeth M. Renieris

Written by

@hackylawyER | Experienced Technology & Privacy Lawyer (CIPP/E, CIPP/US) | Policy Expert | Consultant | https://hackylawyer.com/

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