Blockchain and digital identity management

“Information is the sinews of war”, the saying goes. This popular saying suggests that whoever controls the flow of information has a better chance of winning the war. Without controlling the flow of information, both about yourself and about your opponents, a victory therefore remains utopian. This is particularly true in today’s world, eminently driven by technology, especially the Internet and its developments. The limitations of the latter have made it necessary, even vital, to control access to personal information online. This is what digital identity management is all about. A concept which, as we will see in this article, is today a major strategic issue. Not only in the crypto sector, but also in several others.

I. Digital identity management using blockchain: what are we talking about?

Understanding the management of digital identity in the crypto sector suggests a return to that of digital identity as such. At the very least, this one aims at only one thing. Ensure that only people with the required qualities can access technological resources. To achieve this, digital identity management is organized around a set of processes, policies and technologies.

Applied to cryptos, based on the blockchain, digital identity management therefore aims to give power back to the user. In this case on his personal data. The latter will thus be the sole guarantor of access to them and of their security. A capacity that, in general, current digital identity management systems do not guarantee.

Ultimately, the usefulness of digital identity management when it comes to cryptos is obvious. It rhymes with a certain strengthening of data security. A relevant means of preventing and limiting, for example, identity fraud, which is very widespread on the Internet. But it has a much broader significance.

II. Digital Identity Management Using Blockchain: Why Does It Matter?

Digital identity management in cryptos is critically important, that’s a fact. To understand this, we need to go back to today’s digital identity management systems. The latter are in fact extremely limited in terms of autonomy for users.

In truth, they have no way of controlling their digital identities, or at least what is done with them. In fact, they have no possibility of limiting the access and the use of the data collected on them. This is primarily due to the centralized nature of current digital identity management mechanisms.

Thus, sensitive information such as user names, identification number, among others, are easily stored without their knowledge. Platforms like Google and Facebook are champions in this area. The situation makes users vulnerable to acts of violation of their personal data.

However, it is not uncommon for these to be misused for malicious purposes such as identity theft. What’s worse is that it is often impossible for these individuals to control ownership of their personally identifiable information. It is therefore impossible to know if their data is used or shared without their consent.

III. Digital Identity Management Using Blockchain: What are the Benefits?

It is therefore to the pitfalls mentioned above that the management of digital identity in cryptos provides a solution. Being based on the blockchain itself fully decentralized, it involves certain advantages. As far as the users are concerned, they once again become the masters of their data. It is now impossible to share them without their explicit consent.

In addition, user data enjoys an enhanced level of security. Because their personal information is encrypted and stored in the mobile phone associated with each of them. This development allows users to be granted ownership and absolute control over their data.

The power of the user is all the stronger as the personal data is not stored on the blockchain. It is in fact much more difficult for a hacker to access a large amount of personal information simultaneously. By way of comparison, with current digital identity management mechanisms, the latter can hack up to 20 million accounts at once. In the case of digital identity management in cryptos, our hacker will have to proceed account by account.

This shows the extent of the power held by users over their data. This is to count the fact that this device is accessible to all. In addition to, among other things, the ease and speed of blockchain-based verification procedures, which it allows. The latter also makes it possible to duplicate the digital identity management mode in multi-sector cryptos.

IV. Digital identity management using the blockchain: what practical applications?

Healthcare is one area where digital identity management, used in cryptos, is relevant. And this seems obvious given that this sector is among those that collect the most personal information about individuals. For the latter, the practical application of this method would consist in the secure storage of their medical records.

This, by facilitating their transferability from one health care provider to another, under the control of the persons concerned. The method is also an excellent tool for verifying the actual skills and titles of a given medical staff. A way to quickly check the experience and certifications of health professionals. It is also a useful mechanism to streamline the hiring process, for example.

Another variation of digital identity management used in cryptos typically concerns web 3.0 sites. In this respect, the applications are wide. In particular, it is possible, thanks to the blockchain, to issue verifiable proof of identity. Students, for example, can use it to instantly establish all the information concerning their course. These range from their academic records, to their graduation certificates, to scholarships received, among others.

These are just two examples of the possible applications of digital identity management used in cryptos. This can apply to sectors such as finance, education, supply chain administration, to name a few. While the potential for digital identity management in cryptos is broad, so are its challenges.

V. Digital identity management using blockchain: what challenges for what prospects?

The major challenge of blockchain-based digital identity is its implementation. Already, the latter is expensive to deploy since it requires an infrastructure that is both robust and scalable. Added to this difficulty are other non-negligible problems such as the lack of regulation on a planetary scale. This is not without consequence on its adoption. Because the lack of global regulation directly impacts interoperability between systems. The user experience is also affected, the blockchain being relatively complex to handle.

The fact remains that the management of identity by the blockchain is part of a rather positive perspective. Analysts estimate that by 2030 this market will reach 17.81 billion dollars. An expansion driven by government initiatives for the development of blockchain technology in developed and emerging countries.