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Blockchain Identity Management: The Beginning of a Data Security Revolution

We all have a digital identity. In fact, many of us have scores of different digital identities stored across the web. Whenever we share personal details on a web platform, we build up digital identities. We entrust sensitive personal information such as social security numbers, driver’s license numbers, credit card numbers, and bank account information to centralized organizations over which we have zero control. And we have no guarantees that the data is secure and correct.

On top of these problems, companies that collect our personal data will oftentimes sell that information to marketers. Billions of dollars are made every month by selling consumers’ data, and we see not one dime of that money.

And then, there is also the problem of fraudulent identities, which are easy to create online.

And what of those who have no identification at all? It’s believed that 1.1 billion people worldwide don’t have any legal form of identification and thus are excluded from many of the opportunities provided by modern society. Without valid identification, people can’t vote, use banks, or own property.

Blockchain technology provides a platform for solving all of these problems.

The Problem With DID

The problem with digital identities is that all the personal information — stored on websites over which we have no control — is subject to hacking, identity theft, invasions of privacy, and snooping. Moreover, personal identity sites will frequently have incorrect or outdated information.

If our data is not in our control, we cannot guarantee that the information is secure or correct. We depend on the platforms that we use to maintain high-security standards. But as hard as they try to secure our personal data, it’s been a losing battle.

Hacking has become commonplace. Security breaches and the problems that come with them, such as Identity theft and fraud, are becoming more and more frequent. Millions of internet users each year are victims of personal data theft.

Correcting or deleting an unwanted digital identity is often near impossible. There might be scores of digital identity directories, and all of them would need to be updated individually. Moreover, none of the information stored in the cloud is immutable. It can quickly be deleted or modified by the host. Again, it’s a losing battle.

The solution to the problem is not to abandon the idea of a digital identity. Web-based applications have significantly increased societal efficiency. What we need is a way to get all of our data under our control.

The DID Solution: Blockchain

Blockchain technology offers a potential solution to the DID problem. Enterprises and governments around the world recognize this fact and are working to develop blockchain-enabled digital identity platforms.

Most people are now familiar with blockchain technology related to cryptocurrencies and NFTs. However, blockchain is more than just a way to track and transfer value. It’s also useful for any data storage that requires security, immutability, verification, and personal responsibility.

Using blockchain technology, digital identities can be cryptographically stored directly on a blockchain giving the user complete control over who can and cannot access and edit the information. Moreover, data stored on a decentralized blockchain is immutable, auditable, verifiable, and effectively tamper-proof.

Security is achieved by issuing users private cryptographic keys. Only the holder of the private key has access to sensitive information.

The beauty of this system is that none of the user’s personal information is accessible without the owner's express permission. Blockchain-based DID platforms allow Individuals to curate their personal information and control the data they share.

Moreover, verification of credentials is near-instantaneous.

How DID Works

There are three roles in any blockchain-enabled DID ecosystem: users, issuers, and verifiers.

  • Users are individuals or other entities such as companies with digital identities and associated data.
  • Issuers are individuals or organizations that can issue digital credentials such as governments, schools, healthcare systems, etc.
  • Certifiers can verify the user's identity or the authenticity of digital credentials.

Examples of issuers might include healthcare organizations, schools, and employers. A university can issue a diploma that an employer can verify. And an employer can verify employment for the users or permit them to access restricted applications or information.

Hospitals, pharmacies, and labs can issue vaccination cards and other medical records to be shared with healthcare providers and vice versa. Governments can issue users important identification documents such as birth certificates, ID cards, passports, licenses, etc.

All of these certificates can be issued in an immutable, trustless, private, and secure manner.

Users can also have several DIDs. Each DID can be associated with specific verifiable credentials and attestations. We could have local, regional, and federal government DIDs, medical DIDs, or educational DIDs that are all separate but connected.

We can also have DIDs that contain non-attested data from decentralized applications such as web browsing history or social media posts.

DID Case Studies

Below are four case studies related to blockchain-enabled DID platforms and how they are being used to serve the general public and a wide variety of industries.

IBM Digital Credentials

IBM Digital Credentials provides individuals and organizations with a secure, blockchain-based hub for DIDs. IBM and the blockchain consultancy Chainyard recently partnered to create the project called “Trust Your Supplier,” the purpose of which is to “improve supplier validation, onboarding, and lifecycle information management.” The system allows for the creation of digital identities that can share information on buyers and suppliers, including various permissions. IBM plans to onboard 4,000 of its own suppliers in hopes of substantially reducing onboarding time and cutting administrative costs.

Canadian Project

OrgBook BC is a decentralized identity system for small businesses in the province of British Columbia in Canada. The searchable directory contains registration information about more than 525,000 legal entities operating in the province. Several different government services can issue credentials to organizations in the database such as business licenses and building permits.

Indian Project

The India Project initiated by the government of Tamil Nadu, a state in southern India, tracks identity documents such as birth certificates, education certificates, drivers’ licenses, and other digital identities on a blockchain. Several government services are involved in the project. Blockchain technology is expected to vastly increase the speed of verification and authentication processes and significantly increase security.

BSN (Blockchain-Based Service Network) DID Services

BSN DID Services is a decentralized digital identity management system that makes blockchain-based digital identity and digital credential capabilities available to all types of organizations. The network facilitates the issuance, authorization, verification, and revocation of user credentials via an “Identity Hub.” Credentials are fully controlled by users, and all data is encrypted for storage and transmission.

Blockchain is the future of DID

Blockchain-based DID is the next natural progression for governments, healthcare systems, education systems, banking systems, businesses, and even the internet of things (IoT).

Blockchain solves many problems associated with centralized digital identities, such as being error-prone, being subject to fraud and identity theft, and posing privacy threats.

Governments, NGOs, businesses, educational institutions, healthcare systems, and the like are turning to blockchain as a proven way to solve the problems associated with DID.

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Share blockchain use cases in a wealth of industries, including finance, supply chain, healthcare, legal services, etc. to encourage mass adoption of this technology.

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