Digital identity is one of the many emerging blockchain use cases. For years, many have argued that traditional identity systems have lacked the proper infrastructure to serve individuals and businesses globally. Despite traditional protocols being fragmented, the way identity data is being stored is insecure. With many countries progressing into a digital economy, how can blockchain technology revolutionize the way identity systems operate?
Traditional Identity Systems
Personal identity is simply a collection of data that identified a person no matter where they are living at a given time. Aside from a first and last name, individual identify is solidified through other important data such as passport numbers, social security numbers, driver license information, and much more. Other than a name, the government is highly involved in providing people with their personal identity. In doing so, data issued by the government ends up being stored in centralized government servers.
Data Breach
The problem with centralized servers are that they have historically created privacy nightmares. If we look at data over the last couple years, personal identity has been hacker paradise. According to a report by ForgeRock, personal identifiable information was the most popular data breach in 2018. Around 97% of all breaches in 2018 revolved around personal identifiable information. To further break it down, 54% of the data breaches resulted in date of birth and social security numbers being exposed.
Synthetic Identity Fraud
Keeping identity data on centralized government servers has also fueled the growth in fraudulent identities. According to reports last year, creating fictitious identities was the fastest growing financial crime in the United States, causing billions in annualized losses.
Blockchain Data
Unlike centralized data, blockchain manages data in a decentralized manner. Data on the blockchain is not held on a cloud server or single location. Instead, the blockchain breaks down this data and distributes it across the network. This mechanism essentially cuts out the middleman, and limits the risk of data loss. In addition to data being virtually impossible to hack on the blockchain, it also offers encryption and validation.
Distributed Ledger Technology for identity management is surfacing, eliminating the need for documents, and numbering systems that can be stolen, corrupted, and exposed.
Genetic Data On The Blockchain
According to recent developments, DNA based ID is being powered through distributed ledger technology ( blockchain ). Digital DNAtix, a startup out of Israel has recently been granted a patent titled “Systems and methods for user authentication based on a genetic sequence.” Within this protocol, DNAtix leverages blockchain infrastructure that is integrated through the companies proprietary technology stack.
The company believes that DNA identity and authentication will become the norm in the future, especially in industries such as banking, pandemic tracking, immigration oversight, HR workplace identification, and more. Opposed to traditional identity systems, DNAtix is focusing on privacy, streamlining the way people store, access, and manage genetic data through digital identity.
In a recent announcement from the company, Ofer. A Lidsky, the CEO of DNAtix stated that:
“We are very proud to have secured a US patent as part of our global patent protection strategy, that covers such a basic concept of storing genetic data on blockchain. We see this patent as a baseline technology underlying many applications and use cases in various industries in the near future.”
The Ethereum Blockchain
Aside from DNAtix focusing on digital genomic, other protocols have been working on digital identification for other use cases. In a push to improve digital government activities, the Swiss city of Zug has leveraged blockchain to safeguard data security, increase efficiency, and revolutionize voting accessibility. Back in 2018, Zug was able to create a digital connection between the people and government. During an initial pilot, Zug created their own identity on the Ethereum blockchain.
After doing so, the Swiss city was able to sign and verify data. This resulted in 350 citizens registering and creating digital identifications, which were verified by uPort. Integrating uPort then powered self – sovereign government issued identities to change the way people vote. The pilot proved that e-voting could come to fruition through digital identification. The pilot run also proved that by applying blockchain technology, approving each voter did not rely on intermediaries or vote counters.
The Future
In terms of data breaches, it is quite clear that the current centralized approach has too many fundamental flaws to support user privacy moving forward. The industry has seen a drastic shift, with many companies focusing on digital identity through distributed ledger technologies. In doing so, individuals and companies will live in a future where their personal identities are much safer, due to the immutable and transparent infrastructure that blockchain technology offers compared to centralized framework.
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