Taking A More Tactical View of Identity And How It Affects Our Daily Lives (Part 1)
Have you read or heard about how digital identity, particularly portable, re-usable identity data, can help with processes like know-you-customer? That means that when you open a bank account or invest in a security, the financial institution has to verify who you are before you’re allowed to access the product you wanted. Using portable identities where data are off-chain but certifications/attestations of the data are on a blockchain allows this process to be faster and less error-prone than in the past. This is a win for everyone — you get your account or investment faster, the financial institution gets its product sold quicker and for less money than before.
But for most of us, the real benefit goes to the corporation. How often do most of us open bank accounts, for example? And that’s where the real issue becomes obvious — that there hasn’t been a lot of discussion about how better digital identity helps us every day and not just once in a while. So, what can these portable, cross-domain identities do for us every day?
First let’s discuss the primary characteristics of these identities:
- Validated. The data about you is validated by a third party and then the certificate of that validation is put onto a blockchain. In cases of important information like birth certificates and drivers’ licenses the validator is probably a government or other trusted third party. These certifications are typically tokenized addenda to their offline counterparts. For example, a university likely offers a paper diploma, an online way to access the graduation information, and also a validation token on a blockchain. Other types of personally identifiable information could be validated in other ways, such as credit information through social claims.
- Reusable. The data have already been validated and are trusted, so people accessing the information on the blockchain don’t need to re-validate the data every time. For example, you can present the same identity data to your mortgage broker and your employer to prove your residency without each company having to validate that data directly with a third party.
- Protected. You choose who can access your identity data, giving proactive consent. Plus you can revoke that consent. You have more control over how much of your data are visible and to whom. Additionally, others will have to store less of your data on their own systems, reducing the likelihood that your important data are vulnerable to attacks on their corporate systems.
With these characteristics in place, what are the situations where we can streamline everyday interactions? Think about identity in a looser definition, not just “proving who you are” legally, but tying your identity to your eligibility for other services. Think of it this way, your identity is the foundation for many other actions, such as:
- Determining your eligibility for services or resources
- Verifying relationships between people and assets (because the identity of the asset also has to be verified first and then the ownership of that asset by the person can be verified)
- Accessing information on behalf of another person for whom you have responsibility, without having to use that person’s credentials
In part 2, we’ll give examples of these kinds of daily use cases for blockchain-based identity.