Blockchain Authentication Laying the Foundations for Self-Sovereign Digital Identities
Online space has had a chink in its armor for years due to its incapacity to verify someone’s identity.
This is the reason why many service vendors that conduct business online require access to Personally-Identifying Information (PII) to authenticate who’s on the other end. Creation of inimitable username and password follow up that will represent user’s authentication for future reference.
This is a problematic scenario on two fronts.
On one hand, service providers have to keep careful watch of constantly expanding databases filled with sensitive PII. On the other, users are forced to share their personal information and rely on weak username/password schemes to keep their data safe. Yet, despite these glaring issues, little to no progress has been made in recent years in terms of improving processes of verifying identities whilst online.
However, the growing adoption of blockchain technology might hold the answers we seek as blockchain authentication appears to be an excellent solution to the current woes of identity verification processes.
Blockchain Can Become a Tipping Point for Online Identity Authentication
Blockchain-based verification is an ideal enhancement to traditional identity verification frameworks. The entire network is self-sufficient for validating its own data integrity, meaning that the third-party entities are totally redundant.
Instead, both data validity and security are guaranteed by the immutable blockchain ledger, while access to data is handled through the use of smart contracts.
This is how utilizing blockchain for verification would function — the personal data required to authenticate one’s identity would be kept in the form of hashes which can be used for identity-related characteristics, such as name, unique identity or social security number, or biometric data.
In such a system, the data ownership would be determined by the possession of a private key. As users would be the only ones in possession of that key, we’d have an environment in which the identity bearers are the true owners of their own private data.
Whenever a service provider would need a proof of identity, all a user would have to do is verify themselves to the blockchain with a private key and then grant access to the third party wishing to check up on the PII. Since the data is stored on a blockchain, the service provider wouldn’t have to worry about whether the information might be false or belonging to another person.
And, to the delight of data owners, tricking the authentication process would be a much greater task, if not completely impossible to pull off.
Four Essential Benefits of Using Blockchain to Verify Digital Identities
In theory, there are numerous benefits of using Blockchain for Digital Identities verification and usage, however, four of them are reportedly defined as to possess the most disruptive nature by design:
· No central entity
The main calling card of utilizing decentralized systems is that they enable us to store and handle data without the need for a central administrator to watch over it.
The data would be verifiable by a vast, peer-to-peer network, which means massive third-party data breaches or incidents of selling the data would no longer occur.
· Impeccable security
From the moment blockchain was conceptualized in the early 1990s, it was devised as the most secure method of storing data in existence.
The decentralized manner in which a blockchain functions eliminates single points of failure inherent to centralized systems.
· No way to fake the data
Within a blockchain-based authentication environment, there would be no way to fake an ID, passport, credit card number, etc.
Even if a would-be hacker was able to access the data without proper approvals from the data owner, he wouldn’t be able to copy it. It would be impossible to add a new block to the chain without the majority of nodes verifying its validity.
· Total user control over data
Unlike with current protocols in which the third party companies basically become data owners once users hand the information over, a blockchain network would enable users to be totally in charge of their data.
They’d have full control over who has the right to use their data and what can be done with the information once access has been granted.
Blockchain Identity Verification Scaling Challenges that Need to Straighten Out
Regardless of its revolutionary concept, blockchain-powered identity verification solution still got a long way to go before it’s perceived as a fully-fledged protocol. The most elaborated scaling challenges are:
· Incentivizing the nodes
In order to function, a blockchain requires lots of different independent participants in calculating the system.
A system used solely for blockchain authentication would have no cryptocurrency running through it. There would be no financial benefit to being one of the nodes, so some other form of rewarding people would have to be figured out.
· Permanent loss of access
If the only way to gain access to the personal data stored on the blockchain is through a private key, what would happen if a user was to lose his or her key?
If such a turn of events was to happen within a centralized system, you’d simply call the institution that issued the document and tell them you got compromised. However, in the case of a decentralized authentication system, there’s no central entity, so there would be no way to get a new private key used for data access.
· Scalability issues
While unquestionably secure, blockchain-based systems tend to get rather complex, rather fast.
Scalability could be a huge hurdle for public blockchains (one of several key differences between public and private blockchains), which leads us to believe that this system could be too slow for the tasks it would be expected to complete.
· Inability to alter data
In part, blockchain guarantees data validity by making sure that the data uploaded to it can never be altered in any way, shape or form.
Within the context of an identity authentication system, this represents quite an obstacle. People change their private data often, so a blockchain-based authentication system would have to provide this option.
Blockchain-powered Verification Could Spur Something We Craved For — Self-Sovereign Digital Identity
There’s no denying that the Blockchain and all its solutions are still step-laddering hand-in-hand with other technologies such as Artificial Intelligence, Virtual Reality and so on, but there’s little doubt in our mind that it will play a major role in future identity authentication solutions.
Nena Vuckovic, Blockchain expert and CEO at TheBlockBox, is certainly among the believers in blockchain authentication:
“Of all the potential adoptions of blockchain technology, identity authentication poses an almost ideal hand-in-glove fit. All the issues commonly associated with online authentication are so perfectly patched by blockchain’s features that it’s only a matter of time before we start seeing mass adoption. And, when that moment comes, the way we use the Internet will be in for nothing short of a true revolution.”
Done right, a blockchain-based authentication system could significantly lower the number of identity theft and data breach incidents, if not completely eradicate them. It could also empower us with something we’ve never really had before — secure and cost-efficient self-sovereign digital identities, controlled solely by identity owners themselves.
