Most people at least know that blockchain is the technology that builds Bitcoin and other cryptocurrencies, but digital ledgers that time-stamp transactions for easy tracking and ordering in an immutable way , There are many more uses.
In this fourth article in PYMNTS’s Blockchain in Action series, we’ll look at how distributed digital ledgers can create sharable digital identities without giving up privacy and trust because they can’t be forged or forged.
We are not talking about money laundering prevention (AML) type digital IDs, but about the types of ID credentials that must be presented to a bank or cryptocurrency exchange to meet customer verification (KYC) requirements. ..
The use of this blockchain technology has several aspects known as tokenized IDs or digital IDs.
One is privacy. We’ll talk about the “method” later, but the idea is that people can manage IDs that are tokenized and probably biometrically accessible, and can only provide the details they need. Is this person a citizen? yes. Does the company or agency that collects this person’s information have a social security number in a highly hackable database? No.
Another aspect is security. Instead of using current systems where different service providers all have a highly hackable centralized database of data connected to digital identities, they use blockchain to create distributed identity tokens.
So what does blockchain bring? An immutable (in cryptographically immutable) record that cannot be forged or modified.
What did you get?
“The national identification program is in the spotlight as countries strive to establish a unified database of citizens’ robust and unique identification cards to facilitate governance,” he said. Aravind SrimoolanathanSenior Research Analyst at Frost & Sullivan in November.
Srimoolanathan said the combination of blockchain, artificial intelligence and biometric scanners will make transactions from mobile banking to driver’s license registration easier and more secure. “Digital ID” is 2030.
This prevents the theft of personal information, limits what it collects and returns control to people, stealing personal data from tech giants and other businesses.
In a 2021 survey, PYMNTS and Equifax are seeing a surge in corporate interest in digital identities, with more than two-thirds planning to invest in digital authentication solutions to attract new customers. We have discovered that we are streamlining our internal processes.
Nearly 40% of respondents said that digital ID verification is becoming more important because of the pandemic.
Digital identity systems, especially those issued by the state, are likely to limit access to the information they can collect by design or law. Employers need access to degrees and qualifications, but do not need access to medical data unless they provide proof of coverage.
In a broader sense, blockchain-based digital identity programs that connect users and data via crypto tokens are much simpler, more reliable, and far more capable of cross-border interoperability from private businesses. It’s easy.
How does it work?
The principle of blockchain-based digital ID is very simple. Most blockchain digital identity platforms usually have six parts.
- First, the owner.. The person (or object) identified by the digital ID.
- Second, blockchain Where your digital ID resides. The data here cannot be deleted or modified, but it can be added. For example, if the owner has a college degree, has gained (or lost) security clearance, or has purchased health insurance.
- Third, the issuer. A company or (often a state agency) that verifies the identity of the identity owner and signs an accuracy verification using a non-reusable private key.
- Fourth, a digital wallet. A tool that allows you to build and add digital identities over time and provide access to service providers
- Fifth, digital identifiers. DID checks if the person (or thing) is who he or she is. This usually includes biometric data.
- Sixth, service providers. An agency or company that accepts digital IDs as a way to access services or obtain goods.
The technology is a stress-tested program that focuses on billions of people around the world who do not have identification, from refugees fleeing violence and oppression to the poorest in developing countries who cannot obtain an ID. It is done. , Unable to prove ownership of the land, unable to vote, and generally in poverty.
This is largely due to the United Nations, which has created digital IDs for all development goals of 2030. Back in 2018, the United Nations High Commissioner for Refugees (UNHCR) began using blockchain-based digital ID cards at Zaatari, then a Syrian refugee camp of 75,000 people, just inside Jordan. Save via eye scanner.
As recently as last month Indian era report Researchers show that they are building the next generation of the country’s Aadhaar digital identity program, which is considered the world’s largest digital identity system with over 1 billion users. Aadhaar uses both eye and fingerprint scans to link individuals to 12 digital ID numbers. This number can be used as a digital KYC document in almost every interaction with the state as a fraud prevention measure and is primarily needed by all kinds of people. Interactions with companies such as signing up for mobile phones and bank accounts.