In today’s digital era, Blockchain has evolved as a powerful technology offering several benefits including high security, enhanced transparency, and many features that help to elevate businesses. This transformative technology is currently working on identity management with high security measurements. Identity management in blockchain helps offering a secure way to manage your digital identities for compliance purposes.
An analysis by Allied Market Research foresees substantial growth in the blockchain identity management market. The report indicates that the market, valued at $107 million in 2018, is projected to surge to $11.46 billion by 2026. It highlights sectors like banks, healthcare organizations, and retail businesses as beneficiaries of blockchain identity management solutions, anticipating a remarkable Compound Annual Growth Rate (CAGR) of 79.2% from 2019 to 2026. This robust projection underscores the increasing recognition and adoption of blockchain-based solutions across various industries.
The current identity management system lacks security and reliability, necessitating repeated verifications using various government-issued IDs such as Voter ID, Passport, Pan Card, etc. This article delves into digital identity management using blockchain, examining its capability to elevate security and privacy in the digital landscape.
How does identity management with blockchain work?
In the contemporary context, individuals seek a more efficient means of managing their identity beyond traditional paper-based documents. An application for Blockchain Identity management offers real-time verification and authentication, addressing this need effectively.
Step 1: Mobile app installation
To initiate their identity verification process, individuals must download the mobile app from the Play Store or App Store. Subsequently, upon installing the app, users proceed to create a personalized profile. This profile creation results in the generation of a unique ID number, serving as a secure gateway for organizations to access the user’s identification documents, streamlining and enhancing the verification process.
Step 2: Upload the documents
After receiving the ID number, you need to upload your government issued IDs on the application. Later it will be saved in the IPFS with the given address stored in the blockchain. Through the app, personal information is extracted from the provided IDs, enabling users to undergo a self-certification process for their details. This empowers users with ownership of their data, granting them control over the information shared with organizations. Importantly, no data can be disclosed to identity seekers without explicit consent from the user, ensuring a secure and privacy-centric approach to managing and sharing personal information.
Step 3: Trust score based on smart contract
Imagine a system where an individual’s trustworthiness is quantified through a unique trust score. Smart contracts, housing intricate business logic, play a pivotal role in generating this score. As users create their self-sovereign identities, the information they provide is meticulously processed by these smart contracts to produce an accurate and reliable trust score. This innovative approach ensures a transparent and automated evaluation of an individual’s trustworthiness, facilitating more secure and efficient interactions within various applications and platforms.
Step 4: Request access by third-party
In this innovative identity management system, individuals retain control over their personal information. Companies seeking access to specific details for authentication trigger notifications to identity owners. Users, empowered with the choice, permit or deny access. Once permission is granted, third parties employ the identifiable information for authentication.
Importantly, individuals can track the usage purpose of their Personally Identifiable Information (PII). Blockchain, the backbone of this system, doesn’t store user data; instead, transactions between identity holders and companies are securely recorded. For instance, if an immigration authority verifies identity via an app, the transaction is immutably logged on the blockchain, visible to all connected nodes.
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What are the perks of identity management using blockchain?
Self Sovereign Identity (SSI)
Blockchain introduces a self-sovereign identity paradigm, granting individuals complete autonomy over their digital identities. Users have the authority to create, maintain, and regulate their identity profiles, encompassing personal details, credentials, and permissions. This revolutionary model eliminates the need for intermediaries or third-party authorities, endowing individuals with enhanced privacy and control over their data. Blockchain’s decentralized nature ensures that users are the ultimate custodians of their identity, fostering a secure and empowering digital ecosystem.
Identity verification using blockchain
Blockpass introduces “Blockpass KYC Connect,” a blockchain-powered “Know Your Customer” (KYC) portal designed for businesses navigating strict regulatory environments. Tailored for regulated industries, this platform streamlines user onboarding by leveraging smart contracts to ensure compliance with KYC and Anti Money Laundering (AML) regulations. With user-friendly tools and Software Development Kits (SDKs) facilitating seamless integration into existing systems, Blockpass offers businesses an efficient solution. The platform operates on the ERC20-compliant crypto token “PASS,” providing shared services for user onboarding and comprehensive ID management within a secure blockchain framework.
Immutable audit trail
Blockchain establishes an immutable audit trail for identity transactions, ensuring transparency and data integrity. Every modification or addition to an identity profile is permanently recorded on the blockchain, creating a transparent and tamper-resistant history. This unalterable record enhances security and enables multiple parties to verify the authenticity of identity-related transactions. The immutable audit trail is a robust mechanism to detect and prevent fraudulent activities, providing a reliable defense against threats like identity theft and impersonation.
Interoperability and portability
Blockchain-based identity systems offer unparalleled interoperability and portability, fostering seamless integration across diverse platforms and applications. Users can effortlessly manage a unified digital identity across various services, eliminating the hassle of multiple login credentials and streamlining the user experience. The portability feature empowers users to securely transfer their identity data between organizations or services, providing a level of convenience and flexibility previously unattainable in traditional identity management systems.
Legal data compliance
Blockchain-based identity management streamlines legal data compliance for organizations, offering an efficient and cost-effective solution to adhere to privacy regulations such as GDPR and CCPA. The inherent privacy features of blockchain empower individuals to maintain control over their data, ensuring explicit consent is obtained before any data sharing occurs. This not only enhances compliance with legal frameworks but also establishes a transparent and user-centric approach to data management, aligning with the evolving landscape of privacy regulations.
Preventing identity fraud
Digital decentralized identifiers (DIDs) utilize cryptographic methods to provide indisputable proof of ownership and control over associated data. This robust authentication mechanism enhances security measures, effectively preventing identity fraud by ensuring that only the rightful owner can cryptographically validate their identity and related information.
What are the use cases of identity management on blockchain?
In this section, we will list five applications of identity management system using blockchain:
- Apply for a loan
- Legal procedures
- E-commerce checkout
- Previous employment verification
The effective integration of blockchain identity management can significantly elevate security and privacy standards. The unalterable and decentralized nature of the ledger streamlines third-party validation of user data, saving both time and resources. While the potential of blockchain and identity management is vast, ongoing developments are shaping solutions. Platforms, frameworks, and tools are evolving to tackle challenges such as scalability and transaction throughput, reflecting the dynamic nature of this technology.
To reap the advantages of blockchain identity management solutions, collaborate with a proficient Blockchain development company well-versed in technologies and tools. Connect with Blockchain App Factory. Space for your blockchain identity management project through this quick form and engage with our community of expert software developers.