Digital Identity

How Does Blockchain Work for Digital Identity

FindItMore | Technological advancements have revolutionized every aspect of our lives, and in digital space, it has brought massive changes. Shopping, hanging out with friends, coordinating with colleagues and co-workers, entertainment, Digital Identity, and managing finances all have become easy with the help of technology.

Since the internet has started taking hype, massive expenses have been spent on usability, security, and privacy as the dawn of the internet has made identity management a key concern for businesses and individuals. Despite such massive investment in the identity and access management market, the concern for digital identities is continually being plagued by three Cs- Cumbersome, Costly, and Challenging.

As presently world is being driven by data, most businesses and social transactions are relying highly on digital identity. Digital identity works for governing the interactions between users in the digital space. The concern for identity security is so deep among businesses and individuals because traditional identity management systems are highly vulnerable. A single point of failure may result in countless attempts to gain access to the whole repository of crucial and high-value data.

Digital identity works for companies/businesses, IoT devices, and individuals simultaneously. The data relevant from the point of view of business can be accessed by all three actors. Still, the identity and access management capabilities of devices and users are not appropriate enough. Here comes the need for Blockchain technology to ensure the security of digital identities. In this article, we will discuss the role of Blockchain development for identity in the digital space.


Need for Blockchain Development for Identity

Current traditional identity management systems are vulnerable due to the presence of various identity issues. Blockchain identity management systems can help eradicate such identity issues, which includes:

  • Inaccessibility: Over one billion people have no proof of identity, and many poor people have no identity. Several hurdles, including identification paperwork, expensive paperwork, lack of access to services, and lack of awareness about personal identity, is causing over a billion people away from personal identity. A person without a physical identity cannot enrol in educational institutions, apply for jobs and passports, and not avail of any government service. Having an identity is vital to get access to many services essential for every person. Here starts the role of Blockchain as over 60% of the people without identity is using mobile phones. This paves the way for mobile identity solutions based on Blockchain, a suitable identity source for vulnerable people.


  • Data Insecurity: Presently, centralized government databases supported by legacy software are being used to store our valuable information related to identity, and this centralized software operates with several single points of failure. Such comprehensive personal identification information storage systems with data of millions of users attract hackers. According to 2018 and 2019, the most targeted data for breaches was personally identifiable information. Despite the regulatory measures and enterprise efforts for enhanced cybersecurity, the data records have been exposed to hacking threats.


  • Fraudulent Identities: In addition to the above two, an exceptionally fragmented experience has been observed from the user’s digital identity landscape. Every user uses multiple identities and usernames across different websites. The absence of a standard way of using one platform’s data on another and the weak link between digital and offline identities results in the creation of fake identities quickly. These fake identities develop platforms for counterfeit interactions and are helpful in the perpetration of data and financial fraud.


But now, the enhanced use of smartphones, cryptographic advancements, and Blockchain technology advent has encouraged the development of tools to build new identity management systems and decentralized identifiers based digital identity frameworks, which comprises a whole new subset of decentralized identities called self-sovereign identity.

These self-sovereign identities facilitated by Blockchain and created on Blockchain platform are inherently unalterable and more secured than any other traditional identity management system. These self-sovereign identities allow users to control their identities, access and update data, keep selective information private if they want, transport the data, manage interactions and communication and delete identity. Self-sovereign identities stem from the concept and belief that the control over the administration of identities must be there with individuals only.

This way, such identity management solutions backed by Blockchain innovation to ensure privacy and control of the personal information of the users while sharing data on a trusted network and enable higher security standards for identity transactions. Blockchain identity management solutions allow users for-.

  • Managing Multiple Identities: Possibly, a person may be having one identity for all platforms, and he/she may want distinct identities at the workplace, with friends, and for family. Blockchain supports this flexibility whenever needed and enables a key for all these identities; an allow the user to decide which identity they want to use in a particular space or platform.


  • Anonymous Authentication: Blockchain solutions deploy anonymous authentication and enable optimum security. This allows user to use unique attributes that prove their identity in the platform, eliminating the need for a public key. Blockchain has several use cases in identity management, ensuring decentralized and digital identities are used in several ways. Some of the top use cases are:


  • Self-Sovereign identity: This concept is about giving control to the people and businesses to store their identity data in their own devices and selecting what to share. These identities can be created for nation-states, business corporations, or global organizations.


  • Data Monetization: This is about using personal data for quantifiable economic benefit. Data on its own has value, but personally, identifiable data insights substantially increase the value of the underlying data.


  • Data Portability: Data portability reduces friction for the individuals and simplifies signing up to enhance user adoption.

Blockchain technology is transforming the digital space by its innovations, and these innovations are serving countless purposes to bring ease to be online and digital transactions and communications. Blockchain experts’ demand is increasing daily as the benefits leveraged by Blockchain technology are alluring businesses and industries.

In the field of identity security and management system, Blockchain has proved its importance. In this field, with the innovations and several relevant use cases, Blockchain technology has facilitated many benefits such as decentralized public critical infrastructure for everyone to create cryptographic keys in a temper-proof and chronological order, decentralized storage that reduce the possibility of unauthorized access to data, and Manageability and control over personal information and multiple identities of a single user.


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