A surge in patenting of blockchain-based digital ID solutions
Digital ID plans take shape as blockchain patents pile up. The US patent office started getting buried in applications for distributed ledger systems in mid to late 2019. The overall impression is that the mountain of documents charts a clear course toward making static identity and password protection irrelevant.
One of examples of bigger players investigating the niche is Bank of America applying to patent a security system for a peer-to-peer network with a digital wallet interface that fuels a layered authentication system. The filing has fueled speculation the bank, which already has more than 80 blockchain patents, may be working on a digital wallet or a “crypto wallet” as Facebook Libra draws attention last fall:
But the strongest language in the patent application — which BofA emphasizes is still just a concept — speaks to security, giving a roadmap toward using distributed ledgers such as blockchain to manage ID risk or modernize data management. Such an approach could help the payments industry migrate away from top-down data ownership.
Banks and payment companies are turning to distributed ledgers for everything from cross-border transactions to gaming payments, forcing a corresponding move to use the same technology to secure personal information. Traditional static ID does not fit in this model, nor does authentication that’s overly reliant on proprietary systems.
Many companies are pursuing blockchain to digitize identity protection. Examples include SecureKey, which has lined up bank and telco partners in Canada to build Verified.me, which draws from multiple databases to create an interoperable ID system. Gemalto and bank-supported blockchain consortium RS have partnered in a system that allows users to access financial, e-commerce and government services without requiring distinct due diligence in each case. And Mastercard is stringing together blockchain patents that combine payment processing, an auction model and a system to anonymize transaction amounts and origin.
One of the strongest cases is Apple. In October 2019 the company has filed for a set of ID solutions that sparkled discussions about the firm working on a National ID Verification System.
In it obvious that blockchains are considered among the primary ways to modernize identity management. Regulations such as PSD2 and GDPR are spurring movements toward greater data sharing between banks and third parties in Europe and other parts of the world.
Generally, blockchain patents have grown dramatically in recent years, with an annual compound growth rate between 2013 and 2018 of more than 200%, according to ACS, a research firm. As of April 2019, there were more than 14,000 blockchain patents globally, according to IAM Media citing data from Derwent, a patent services company. I’ll be interested in looking at more actual stats to see if the trend sustained.
About the author
Yury Myshinskiy is a President with the Worldwide Digital Identification Association in Geneva, Switzerland, ID & KYC/AML adherent and a tech expert with many years of relevant experience in the field.
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