Could Blockchain-Based Identity Alleviate a Key Refugee Challenge?

The millions of refugees streaming into neighboring countries from war-torn Ukraine pose a humanitarian challenge to which the world community is rising admirably. But many of these unfortunate individuals, through no fault of their own, are also creating a security conundrum for authorities in the countries granting them refuge. Forced to flee their homes quickly, many lack documentation to prove their identities. And in times of national crisis, assistance from their own governments in obtaining such documentation may be slow or nonexistent.

Identity verification is integral to the functioning of modern societies and economies. For refugees seeking to start a new life, the inability to display government-verified proof of identity can complicate finding employment, opening a bank account, receiving government assistance, and much, much more.

And the Ukrainian refugees are not alone. According to the World Bank, 1.1 billion people worldwide have no way to verify their own identities. At the same time, some 60% of these people do have smartphones. And this creates a unique opportunity to use advanced blockchain technology to solve one of the world’s most pressing problems: identity verification.

What Does Blockchain Have to Do with Identity Verification?

Existing identity management schemas are wholly based on governmental validation. With the exception of rather clumsy UN-issued identity documents — if you do not have an identity verified by a nation-state, you do not legally exist for the purposes of international travel, finance, and a host of other economic and societal functions.

But what happens when this governmental system breaks down, as during wartime? What happens when government databases are breached, or individual identities stolen? As long as international identity management standards remain centralized, governmental validation will continue to be a single point of failure that endangers everyone.

This is where the decentralization and immutability of blockchain technology comes into play. With the potential to eliminate the need for centralized intermediaries like governments, blockchain carries the promise of returning control over identities to individuals — and doing so at a global scale.

How Does Blockchain Facilitate Identity Verification?

Blockchain enables a Self-Sovereign Identity (SSI) identity management paradigm, in which the user is the sole manager of his or her identity. Stored in a decentralized manner via blockchain, this model allows users to self-manage their digital identities with no dependence on third parties like governments to store and manage the data.

Even blockchain-based SSI does require, of course, some sort of initial independent identity verification. The process of establishing such a trusted identity is comparable to the Know Your Customer (KYC) process in banking — which is generally performed by live or online person-to-person interaction, using some sort of physical identity document.

That said, given the advances in biometrics, in a blockchain-based SSI paradigm this establishment of trust would only need to be a one-off process — conducted via a government office or third-party identification verification service. Since biometrics don’t change and blockchain is immutable, once an individual’s biometrics are linked to his or her identity, there would conceivably be no need to reverify…for life.

Even if reverification is necessary, identity providers or their intermediaries wouldn’t need to store sensitive personal data directly on centralized servers. This would dramatically reduce the danger of identity theft, while at the same time raising overall confidence in the accuracy and veracity of identities.

Already in the Works

As far back as 2018, the United Nations High Commissioner for Refugees (UNHCR) began seeking ways to offer refugees control over their own identities using blockchain. The idea was to set up globally applicable system of digital proofs of identity, relevant for any kind of personal data. This would allow the UNHCR to “to prove the birth and provenance of x and y individuals — as well as their qualifications, employment history and so on — even when the institutions that originally provided that proof in the form of certificates no longer exist…”

Similarly, blockchain-based identity management is being examined for use by local and national governments. One of the most common use cases involves the ability to easily and privately share a citizen’s credentials. A good example of how this would look is the “nightclub entry parable”: A young woman is trying to get into a nightclub and needs to prove her age. She doesn’t want to show the bouncer her address and personally identifiable information but needs to provide some attestation that she is over 21. Providing a zero-knowledge-proof that she is older than 21 without sharing her actual date of birth would protect her privacy, while still providing the bouncer with the verifiable proof of age that he requires.

Another function of blockchain-based identity management systems in government would be to more efficiently and safely share data across siloed government ecosystems. For both of these functions, trials are already underway in Switzerland, and proposals are under examination in Dubai, China, and multiple other locales.

The Bottom Line

The widespread proliferation of smartphones and the increasing acceptance of blockchain as the basis for secure data management has created a unique opportunity to change the way individuals verify who they are. By limiting the role of the state in lifetime identity management and by eliminating governments as a single point of failure in this endeavor — it will be possible to ensure that even stateless individuals or refugees are able to navigate global identity requirements and enjoy the fruits of the modern economy.