The Role of Blockchain in Digital Identity Management

Regulations on the process and mechanism collection, storing, using and sharing personal information have been on the rise as a protective measure to the widespread usage of the same for business purposes. This has also been necessitated by the lack of security in existing data management systems that have been susceptible to data breaches and hacks leading to sensitive, personal information of people being compromised. Identity Management is a crucial activity in today’s digital era and is needed every time a user logs in to applications or websites. Levels involved in this process vary based on the criticality of the activity. 

Moris Media, a leading Digital Marketing agency based in India, has been keenly following the developments in the Blockchain domain and shares its perspectives on the role of Blockchain in Digital Identity Management. 

What is Digital Identity?

To ensure that only people with the proper authorization can access technology resources, information, or services, identity management is a framework of procedures, rules, and technologies. Systems for managing identities and access are always changing to enhance both user experience and security. Anything that highlights your presence on online platforms starting from the photographs you post, how you are using websites, financial transactions that you are executing online; all of these contribute in their own manner in shaping your digital identity. The best offline and online identities of an individual are featured in digital identities.

The Use of Blockchain In Digital Identity:

The distributed ledger technology known as blockchain allows for the secure and decentralized archival of data. Each user has to maintain a copy of the ledger on a correlated network, which allows it to operate. The network verifies all modifications made to the ledger, guaranteeing that the data is correct and unchangeable

The lack of a requirement for a central authority is one of blockchain's key benefits in digital identity management. The ready-to-use blockchain-based services were created with interoperability and open standards as guiding principles, and they can be used with any credentialing solution worldwide. This makes sharing credentials easier and strengthens the trusted network between wallets and between wallets and business services. Join a network that already exists or develop your own. Utilize the tools of your choice to personalize the network. In conventional identity management systems, it is up to a central authority to confirm and validate a person's identification. This renders the system susceptible to attacks and creates a single point of failure. 

A decentralized, individually identifiable digital identity that can be validated by any network user is made possible by blockchain technology. Each user has total control over their data, which is saved on the blockchain where the identity is also stored. All actions and business processes are tamper-proof and permanently recorded as blockchain transactions, and only permissioned network members have access. Therefore, any data remains protected now and no one can access, view or edit the same without the consent of the owner.  

Moreover, blockchain technology provides anonymity while maintaining transparency. With blockchain technology, identity information is auditable, traceable, and verifiable — in just seconds. You can specifically design your profile as per your choice and also restrict the sharing of data. The credential verification process can also be completed in just a matter of minutes. This platform is indeed empowering and is built on the trust factor. 

Establishing confidence between parties without the use of a mediator is another important benefit of blockchain-based identity management systems. Users of blockchain identification solutions don't have to be concerned about giving sensitive information to anyone other than the verifier or about third parties being involved in the verification processes. Because all user data is cryptographically encrypted and exclusively kept by users in their identity wallet apps, there is a better assurance of security from fraud and identity theft.

Examples of Blockchain-based Digital Identity:

Identity management solutions based on blockchain offer a variety of real-world uses. For instance, it can be applied to the healthcare sector to safely handle patient records. The financial industry can benefit from this process by using it for preventing money laundering and other illegal activities. Other well-known blockchain-based examples of digital identity include ID2020, a global alliance of public, non-government, private, and governmental organizations.  

Conclusion:

The world is at large facing a commonly challenge of effective management of digital identities and this is having an impact on economic and social well-being of people. Blockchain checks all the right boxes to become an ideal solution provider. It offers a safe, decentralized, and impenetrable method of controlling digital identities. Transformation is a continuous process and therefore reforms are mandated to the present identity management mechanisms. But a fact that is renewing hopes for this sector is the capability of blockchain to create a perfect framework that can be greatly helpful in modernising the overall digital identification system. Blockchain technology is expected to become more and more crucial to managing digital identities as it develops.