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Identity management using Blockchain often called identity and access management (IAM), ensures that only those allowed may access the technological resources required to carry out their job duties. It encompasses policies and technological tools that cover an organization-wide procedure for accurately identifying, authenticating, and authorizing individuals, teams of individuals, or software programs through criteria such as user access privileges and limitations based on their identities.

In addition to preventing unauthorized access to systems and resources, an identity management system also aids in preventing the exfiltration of enterprise or protected data and raises alerts and alarms when unauthorized individuals or programs attempt to gain access from both inside and outside the enterprise perimeter.

The hardware resources in an organization, such as servers, networks, and storage devices, are also protected by identity management solutions from unauthorized access, which could result in a ransomware attack. Due to the escalating international regulatory, compliance, and governance requirements that aim to safeguard sensitive data from exposure of any type, identity management has become more significant during the past ten years.

Generally speaking, IdM and IAM systems are an element of IT security and IT Tools for identity and access control, data management within the workplace, and the vast range of devices that users rely on to carry out business tasks, from phones and tablets to desktop PCs running Windows, Linux, iOS, or android, are readily accessible. However, identity management is mainly concerned with a user identity (or username) and the roles, permissions, and groups that the user belongs to. IdM and IAM are concepts that are sometimes used interchangeably. IdM also emphasizes identity protection using various technologies, including passwords, biometrics, multi-factor authentication, and other digital identities. Adoption of identity management software platforms and applications typically results in this.

What Is Identity Management?

Identification management, often known as "identity and access management," or IAM, refers to all the procedures and technological advancements used inside an organization to identify, authenticate, and authorize someone to access different services or systems within that single organization or others.

We have faced blockchain identity management system difficulties since the beginning of the Internet; therefore, the necessity for blockchain identity on Blockchain management systems is particularly apparent in the internet era. Security, privacy, and usability are three of the most important.

While there are flawed mechanisms for establishing personal identification in the physical world, such as blockchain identity documents, driver's licenses, and even passport numbers, there is no comparable structure for safeguarding our identities or the identities of the digital world online. While governments may issue physical identification, online identities and the digital world does not respect national borders, and digital identity authentication looks to be an intractable challenge in the absence of a worldwide institution to manage the process.

Blockchain technology may solve this issue by providing a safe solution without the requirement for a central authority. It can be used to create a blockchain identity, making it easier to administer for individuals and providing them more control over who has access to their existing data and how they access it.

A digital ID that acts as a digital watermark and may be allocated to every online transaction can be established by combining the decentralized identity and blockchain identity verification.

The system may assist firms in verifying the digital identity of every transaction in real time, reducing fraud rates. Consumers can log in and verify payments without providing any username or password information. Thanks to blockchain technology experts, consumers may use a Blockchain-based app to authenticate instead of traditional identity systems like a username and password. A blockchain development company can create custom blockchain solutions and provide a number of blockchain development services for identity management.

Digital Identity and Blockchain Identity Management

As humanity progresses through the Digital Age, our lives are becoming more composed of both offline and online activities. Traditional thought on "Digital Identity" is essentially machine-oriented, although the characteristics of "classical" human blockchain identity have kept philosophers busy for millennia. At first glance, telephone numbers, e-mail inboxes, and Internet Protocol (IP) addresses appear meaningless in defining us as human beings. However, discussions regarding surveillance in the digital realm (Council of Europe, 2018) and European Court of Justice (ECJ) jurisprudence are trying to establish whether IP addresses should be classified as personal data.

The pervasiveness of digital technology, as well as its application to not just govern but also change society, necessitates a rethinking of our digital environment and ourselves as individuals.

In late 2013, the United Nations (UN) made a tentative start to address these changes by "[r]recognizing that the same rights that individuals have outside must also be safeguarded online" in an attempt to build an explicit and universal approach.


The three pillars of Self-Sovereign Identity, as defined by the W3C, are the Verifiable Credentials protocol, Decentralized Identifiers protocol, Distributed Ledger Technology (or Blockchain), and Zero Knowledge Proof.

"Verifiable credentials reflect claims made by an issuer in a tamper-evident and privacy-respecting way," according to the W3C. In essence, Verifiable Credentials allow for the digital watermarking of claims data using a combination of public cryptographic keys and privacy-preserving approaches to avoid correlation.

As a result, not only can physical credentials be safely converted to digital, but identity holders of such credentials can also selectively disclose specific information from their digital credentials without exposing the actual data (imagine proving your age without having to show your ID card! ). Third parties can instantly verify this data without having to contact the issuer.


Decentralized identifiers are identifiers that are globally unique and permanent. The decentralized identity holders have complete user control over them. DIDs do not rely on centralized systems, authorities, or identity suppliers to prove identity.


When an organization offers you a Verifiable Credential, they also give you their Public DID. The blockchain, an immutable data record, stores the same Public DID. If someone wishes to confirm the Credential's authenticity/validity, they may look up the DID on the blockchain to determine who issued it without contacting the issuer.


The Blockchain serves as a decentralized identity data registry that can be verified. A "phonebook" that anyone may use to find out whose organization a given Public DID belongs to.

Without disclosing the actual data, a distributed ledger technology (a "blockchain") in blockchain identity management allows everyone in the network to have the same source of truth regarding which credentials are legitimate and who attested to the authenticity of the data inside the credential.


There's a problem with digital identity. It's vulnerable to lose, identity theft, and fraud if it's paper-based, such as birth certificates sitting quietly in a basement of a town hall.

By allowing for better interoperability across departments and other institutions, digital identity management lowers bureaucracy and speeds up operations inside organizations. However, if this digital identity is stored on a central entity, it becomes a hacking target. Over 600 million pieces of personally identifiable information, such as addresses and credit card numbers, have been stolen, leaked, or compromised from businesses since 2017.

The majority of today's digital identity management solutions need to be more effective and updated.

Digitization makes it possible for identities to be portable and verified anywhere, at any time. However, being digital is insufficient. Private and secure identities are also required.

Current digital identity management methods cause challenges in several industries


Excess bureaucracy results from a need for interoperability between departments and levels of governmental services. As a result, entire process times and prices increase.


More than half of the world's population lacks access to adequate healthcare. Interoperability between healthcare players (hospitals, clinics, insurance companies, physicians, pharmacies, etc.) leads to inefficient healthcare, delayed care, and patient unhappiness.


It is believed that in the United States, two hundred thousand fraudulent academic degrees are marketed yearly. Due to the difficulties in confirming the legitimacy of these credentials, unqualified people are hired, causing brand harm to institutions and employing organizations.


Requiring login information such as passwords reduces banking security for users using their bank accounts.

Businesses in general: the necessity to maintain the personal data breaches of clients and staff is a source of business liability. Personal data breaches may result in large fines as a consequence of GDPR violations – as in the British Airways case – or simply due to a loss of consumer confidence and subsequent brand harm.

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Benefits of Blockchain in Identity Management

At the World Economic Forum, it was suggested that everyone using the internet should have a unique digital identifier. This digital ID would serve as a digital watermark that would be applied to all transactions carried out by the user, utilizing a decentralized blockchain and a comprehensive mechanism for validating identification. Additionally, this digital ID would serve as a mechanism for verifying the user's identity. It is possible to determine the real identity of a person's sovereign state, provided that it is applied effectively and by the regulations. During this process, you may get support on a step-by-step basis from a crypto exchange development company.

The following are some examples of blockchain digital identification solutions and key benefits

The ease with which duplicate ID evidence may be obtained once the original is lost:

This is the most straightforward use of blockchain in Identity management by blockchain developers. As previously stated, it is typical to encounter folks who need to find their original ID proof paper. As a result, the following occurs:

They must travel to the appropriate government department to obtain a shred of duplicate ID evidence, but the procedure is lengthy.

Information silos and business processes are common among government agencies. This causes the issue of the duplicate ID to be delayed.

The system disproportionately affects the poor, such as the homeless and those living far from government service locations.

Due to the several-step process, people living in rural places may need to visit government offices many times to obtain duplicate ID evidence.

Because blockchain allows for the durability and tamper-proofing of identity documents, it can be useful in this situation. The ID evidence of persons can be stored on a blockchain by government entities. This record is entirely safe and dependable due to its tamper-proof nature, and the security characteristics of blockchain assure its permanence.

If an original ID proof is lost, government officials can quickly issue a duplicate ID proof. In "The Impact of Digital Identity," you may learn more about this use case.

"Identity of Self-Sovereignty" (SSI)

The Cambridge Analytics/Facebook data scandal has demonstrated how technological behemoths like Facebook and Google control and manage users' digital identities and how dangerous this may be. Blockchain identity management is complicated, and it is difficult for internet users to manage their digital identities owing to outdated methods.

The concept of "Self Sovereign Identity" (SSI) can benefit in the following ways:

Users own and have complete control over their digital identities.

Other parties can see this information only with the principal user’s permission.

An SSI is designed to be trustless, so relying on a third-party supplier is not necessary.

  • Hackers cannot damage SSIs since they are permanent.
  • Their portability is a significant benefit.
  • The blockchain can aid in the creation of a system that allows individuals to receive their SSIs. In reality, Hyperledger Indy, a Hyperledger Consortium business blockchain platform, caters to digital identity use cases.

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At the world economic forum, it has been proposed that a digital ID be produced for each internet user to serve as a digital watermark applied to all transactions carried out by the user using the decentralized blockchain concept and a complete mechanism for validating identification. If used correctly, it may be possible to determine the truth of an individual's sovereign identity.

Finally, blockchain might be the key to creating identity management. In such a system that gives people complete power, users can choose whatever data they want to share across various transactional channels while still protecting their identities from identity theft, thanks to the new technologies.

It will also make things simpler and more convenient and aid in the upkeep of the current digital space. However, blockchain technology isn't magical, and there isn't a feature that makes everything on the blockchain instantly true. In the end, the individuals who enter their personal data on the blockchain and the organizations with the power and permission to do so will be responsible for the validity and truthfulness of any information about the person's identity

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