Blockchain

Blockchain Ledger Technology Based Digital IDs: The Future for a Securer Virtual Privacy

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Almost every day we punch in our personal information online in so many ways such as- while subscribing to our favorite websites, for opening an online account, registering for an event, shopping any item from the net, or simply when we exchange a number of emails on a regular basis. But the question arises how safe is our personal data with the online companies? How much our personal digital identities are within our control?

Reflecting on traditional online data security-

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As per a survey conducted by Washington-based digital agency Rad Campaign and analytics firm Lincoln Park Strategies revealed that out of every 5 Americans at least three people do not have trust in social media. They do not feel their personal information is safe with them. Here is an excerpt from the survey-

“The online privacy threats that Americans are most concerned about include having personal data stolen (86 percent), identity theft (85 percent) — an increase of 10 percent since 2016, and downloading a virus/malware (84 percent) — an increase of 4 percent since 2016. […]Millennials have the most trust in social media sites (40 percent) — compared to any other generation. Adults 71+ (silent generation) have the least trust at 27 percent. […] Over half of Americans (58 percent) believe their smart speakers are constantly listening and collecting personal data on them, then selling that data to advertisers.”

With such a fearful mentality, it gets extremely difficult to muster the fact that we as a whole internet community create about 2.5 Quintillion Bytes of data every 24 hours. Can you imagine how such a massive amount of data can be handled with old traditional means? Well, exactly where the clouds of worry get thin, when we think of Blockchain Technology Ledger based calculative, mathematical, precise, and transparent answers to this huge privacy concern.

Blockchain Technology’s promise-

The growing number of blockchain industries is good news and a sure sign of maturity of this digital age. It is a source of confidence that our digital personal data will be more manageable and secure. The Blockchain technology offers more self-control over our information and credentials, as everything on the ledger technology is digitally signed and time-stamped. At the same time, with the promise of a unique identity for everyone, there arises a parallel concern for getting too isolated.

A growing number of Blockchain-based industries-

The impressive number of organizations shifting into the blockchain and the digital ID area. Last month  ID verification platform ‘Authenteq’ from Iceland announced gaining 5 million U.S. Dollars in a Series A funding round. It was headed by Draper Associates. Draper Associates also invested in giants like Skype,  Telsa, and Baidu before Authenteq.

Also, in January, the Chief Executive- Neil Parmenter of the Canadian Bankers Association (CBA) said while supporting the idea of using the blockchain technology as a part of the digital ID system-

“Because this digital network is connected, yet decentralized, the risk of compromising the system is reduced by eliminating ‘honeypots’ of data that hackers tend to target.”

On the other hand, last year saw big government bodies, as well as commercial bodies such as European Union, Microsoft, Telefonia, Johnson Controls among many others, showed a massive interest in embracing the blockchain technology-based digital identity. The mettle in the blockchain technology uses attracted several startups t serve the platform in some or the other way across the world. On this matter Dr. Phillip Windley, chair of Sovrin Foundation said-

“Sovrin’s approach to identity is based on multi-source identity where identity attributes are vouched for by many credential issuers. […] “Anyone can become a credential issuer. Identity owners can hold credentials from multiple sources and present them to prove things about themselves. Credential verifiers determine which credentials they will trust. This is how identity works in the physical world. Sovrin brings it online.”

Sovrin Foundation boasts expansion in almost all the countries through sixty companies that include- IBM, Cisco, T-Labs and Swisscom and so on. He also told that 6 million credentials that represent business registration and licenses were created by British Columbia and Ontario. Also in the coming year, CULedger aims to issue 1 million credentials.

Versatile moves towards the Decentralized Digital ID System-

More and more organizations are embracing the decentralized digital ID system.

  • For instance in 2018, Civic partnered with Telefonica among many other companies.
  • Another UK based company called ‘Nuggets’ joined forces with Lateral Payment Solutions to incorporate the decentralized ID system.
  • Bloom, a digital ID platform also attracted a lot of individual users and attention from gig organizations alike.
  • Another Netherlands based company called- Lynked. The world also started to use ETH blockchain in order to provide ID verification. It also offers educational and professional verification based on the blockchain technology ID system. Its innovative approach towards blockchain technology’s use is quite impressive.

Last year in December, the company generated a ‘first-ever blockchain-based birth certificate.’ It was issued to a month old baby named- ‘Divit Biyani,’ in Kolkata, India.

Later the company partnered with the municipal government of Kolkata, and prior to this, it partnered with Coal India Limited, the Metal Scrap Trade Corporation Limited (MTSC), and the West Bengal Forest Corporation Limited.

Such innovative uses of the Blockchain technology-based digital IDs definitely points at so many more potential areas this technology can be used. We are just at the start of exploring this wonderful technology’s benefits.

Along with benefits will Decentralized Digital ID System offer isolation too?

On the one hand, where the blockchain technology-based digital IDs provide a lot of security and prevent the information from getting tampered or manipulated, yet at the same time, from a bigger point of view- the emergence of individual start-ups offering ‘their own blockchain platforms’ is just another replica of the competitive monopoly model.

Imagine a situation down the years, where you have a number of digital ID’s over various platforms for various facilities such as banking, education, career, business, shopping, and so on. But what a confusion it will be if none of these platforms will recognize those separate other’s digital ID provided to you. Despite having a digital ID, it will still be isolated.

Therefore, this situation poses a serious question and furthermore underlines the importance of a truly ‘decentralized Blockchain System.’ On this Philip Windley says,

“Self-sovereign digital identity will grow similar to other platforms with large network effects: slowly at first and then all at once. The production uses […] use credentialing within an ecosystem: Canadian business licensing, credit unions, and healthcare professionals. Those organizations and others are doing the hard work of getting people used to a new model, building partnerships, and launching systems. But once enough of these exist in isolation, the interaction of these people starts to put pressure on others outside those ecosystems to accept these credentials, or organizations outside these ecosystems start to see how accepting these credentials could save them time or money.”

A few examples of isolated blockchain ID systems are Linum Labs. The company is reportedly getting developed by startup Attest which is in partnership with Deloitte. It is also supported by Visa in partnership with IBM to build the Digital ID system to enable payments across countries.

Further Phillip Windley anticipates more confusions before the decentralized technology will be fully realized-

“The interest is heartening because it shows that there are real problems here that people are willing to spend money to solve. But it also muddies the waters. Most of these blockchain-based digital ID systems are not self-sovereign or multi-source. Consequently, they are perpetuating the old, single-source identity model that has failed on the internet for the last 20 years. They are not decentralized identity, like a multi-source ID system, but centralized despite using the blockchain. This will cause confusion in the businesses that are necessary to launch the ecosystem.”

Non- Blockchain ID System VS Blockchain-based ID system-

Ryan Faber, on the other hand, has a different take on the situation. According to him, market demands will eventually make identity systems more mature over time. The practical tests will sieve the great ones from good enough-s. He thinks the aim should be an internationally accessible open source. Faber does not believe in one standard commanding the world. There is a need for flexibility and openness. He further added,

“We are excited about cross-platform efforts to develop interoperable and extensible identity solutions to bring digital IDs to reality.”

So it is an interesting time for the Blockchain industry to grow. Whether the competition will screen out the best blockchain services and the masses will choose based on that, or a more global, open, accessible approach will win over, only time will tell. This confusion can also be a source of inspiration for many blockchain-based digital ID systems to innovate and come up with truly great, whole, securer options.

Either we look at ‘Co-existence’ of several blockchain ID systems, or the ‘ruling of a centralized yet decentralized platform’; both these scenarios are way better than the current fearful situation where our personal data is misused and rather made a business out of. Once in a while, we hear scams of giants manipulating tons of personal data collected from the public, in order to earn millions and billions of bucks. Of course, such a mentality will not want the blockchain decentralized ID system to proliferate. The CEO and founder of Humans.net- Vlad Dobrynin said-

“In fact, there is a huge shadow data industry worth billions of dollars each year that is absolutely dependent on hoovering up personal data and which many large organizations sell their data into. As such, there will be resistance at this level, and no do doubt many clever arguments will be put forward as to why the personal data gathering and data ‘analysis’ should continue. However, it ultimately depends on the users and a critical mass of startups that use Blockchain based Digital IDs to start turning the tide.”

Trevor Holman

Trevor Holman follows crypto industry since 2011. He joined CryptoNewsZ as a news writer and he provides technical analysis pieces and current market data. He is also an avid trader. In his free time, he loves to explore unexplored places.

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