Understanding how blockchain is changing identity management
If you are a fan of The Office, you must remember the infamous lines of Dwight Schrute’s infamous lines,“Identity theft is not a joke, Jim! Millions of families suffer every year.” Well, he was right. Every year millions of people of global scale fall victim to identity fraud. Plus, cybersecurity threats have become more frequent and sophisticated. In the Equifax breach, nearly 145 million US citizens saw their data hacked. The breach was caused by a software flaw that allowed hackers to take over the company’s website. Incidents like Equifax can be averted in the future by investing in proper software technologies: Blockchain. Advocates of Blockchain assure that it can be used for better identity management.
It empowers users to have proactive control over their data,thus making it more difficult for unauthorized users to exploit it. Once an individual enters his personal information on whether it is Amazon Pay or a social media site, his details are stored on several internet databases. To make the situation worse, digital clones of the same individual spring into existence across these different platforms. Data in the wrong hands can wreck personal lives, change political courses, or cause massive financial losses. For instance, the recent Facebook-Cambridge Analytica data scandal is claimed to have even influenced the US elections.
Hence the extensive adoption of blockchain technology is not surprising when implemented by companies who value their reputation and customer safety. Thanks to their decentralized architecture, Blockchain Identity Management can eliminate three major issues, i.e., inaccessibility, data insecurity, fraudulent identities. As per a study, the global blockchain identity management market is projected to reach US$ 1,929.9 Million by 2023, fromUS$ 58.3 Million in 2017 at a Compound Annual Growth Rate (CAGR) of 84.5 percent during the forecast period. Some Blockchain startups are partnering with financial services, technology, and government organizations to mitigate the risks of large-scale cyber-attacks and identity fraud. These startups are also working to help individuals have authority and access to services that require valid identification.
Under blockchain identity management, a key element of securing decentralized identities is cryptography. In cryptography, private keys are known only to the owner, while public keys are disseminated widely. This pairing accomplishes two functions. The first is authentication, where the public key verifies that a holder of the paired private key sent the message. The second is encryption, where only the paired private key holder can decrypt the message encrypted with the public key. Once paired with a decentralized identity, users can present the verified identifier in the form of a QR code to prove their identity and access certain services.
Some exemplary startups providing services in identity management using Blockchain are, Keyp, Civic, Validated ID, Metadium, Cambridge Blockchain, Hu-manity, MONI, Evernym, 1Kosmos, Persona, VerTrius, and many more.
The advantages of having a blockchain identity management system are multifold. These include easy obtaining of duplicate ID proof after losing the original, Self-Sovereign identity that allows users to store their identity data on their own devices. It also enforces data portability, manages user identity for the Internet of Things (IoT) systems, and provides Non-custodial logins.
Like any other emerging technology, Blockchain is also going to provide a range of opinions on its viability.The technology will also allow us as users to determine the data we desire to share across different transactional mediums while also protecting our identity from theft. Despite being in a nascent stage, blockchain identity management has one of the most immediate use cases. This will pave the way for a future where it is easy to secure, control, and manage personal, digital identity.