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BLOCKCHAIN IN IDENTITY MANAGEMENT

We live in a fast-changing world, and it is becoming increasingly data-driven. All social systems, including traffic, health, governance, logistics, and military, are being quantified and efficient, while simultaneously becoming more visible and responsible.

This affects not simply the world economic forum, but also how they are managed. The distinctions between client, citizen, corporation and government are likewise blurred. Everyone can observe what is going on, so everyone can have a part in developing these new systems.

What Is Identity Management?

Identification management, often known as "identity and access management," or IAM, refers to all of 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 management system 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 either our identities or the identities of digital world online. While governments may issue physical identification, online identities and 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 be able to 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 blockchain concept with digital identity verification.

The system may assist firms in verifying the digital identity of every transaction in real-time, reducing fraud rates. Consumers will be able to log in and verify payments without needing to provide any username or password information. Consumers may use an app to authenticate instead of traditional identity systems like a username and password, thanks to blockchain solutions. The solution will store their encrypted blockchain identity, allowing people to share and manage their data sharing on their terms with organizations.

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 appearance, telephone numbers, e-mail inboxes, and Internet Protocol (IP) addresses appear to be 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]ecognizing that the same rights that individuals have outside must also be safeguarded online," in an attempt to build an explicit and universal approach.

Digital Identity Management Models

The initial digital identity management model was segregated. A user was given a digital identification certificate by each organization to use its services. For each new organization with which he interacts, each user needs new digital credentials. This resulted in a bad user experience. Just think about how many websites you had to register for and generate new passwords and login information for.

Federated

The "Federated" approach to digital identity management is the second option. Third parties began giving digital identity credentials that identify users to log in to services and other websites as a result of the initial model's bad user experience. The "Login with Facebook" and "Login with Google" features are the greatest examples of this. Companies "outsourced" identity management to huge organizations with a vested financial interest in amassing massive databases of personally identifiable information. This, of course, raises issues about privacy concerns and security.

Facebook, Google, and others become trusted intermediaries.

With the advent of Blockchain technology, Decentralized Identifiers, and Verifiable Credentials, a third form of blockchain identity management system was born: Self-Sovereign Identity.

Managing Digital Identities and the Self Sovereign Identity of Individuals Using Blockchain Technology

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! ), and third-parties can instantly verify this data without having to contact the issuer.

Decentralized identifier

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.

Verifiable Credential

When an organization offers you a Verifiable Credential, they also give you their Public DID. The blockchain, which is an immutable record of data, 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 having to contact the issuer.

By Using Blockchain

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.

Identity Management with Blockchain: The Three Actors

When it comes to using blockchain technology for blockchain identity management, it's vital to remember that there are three separate parties involved:

Identity Owners, Issuers, and Verifiers.

Personal credentials for an identity owner can be issued by the digital identity issuer, which can be a trusted third party such as the local government (the user). The digital identity issuer attests to the legitimacy of the personal data in a credential by issuing it (e.g. last name and date of birth). The identity owner of the digital identity can keep those credentials in their identity wallet and use them to confirm their digital identity to a third party later (the verifier).

Credential

An identity attribute is a piece of information about an identity, and a credential is a collection of many digital identity attributes (a name, an age, a date of birth).

Credentials are issued by third parties that vouch for the accuracy of the information included inside the credential. The utility and dependability of a credential are entirely dependent on the issuer's reputation and trustworthiness.

Problems with Current Identity Management Systems

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 identities 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 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 are ineffective and antiquated.

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:

Government:

Excess bureaucracy is a result of a lack of interoperability between departments and levels of governmental services. As a result, entire process times and prices increase.

Healthcare:

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.

Education:

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

Banking:

Requiring login information such as passwords reduces the security of banking for users, when they use their bank account.

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

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Benefits of Blockchain in Identity Management

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

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

This is, by far, the most straightforward use of blockchain in ID management. As previously stated, it is typical to encounter folks who have misplaced 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 who live distant 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.

In the unfortunate event that 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.

2. "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 own 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, but only with the principal user’s permission.
  • An SSI is designed to be trustless, so there is no need to rely on a third-party supplier.
  • 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.

Evernym, a blockchain start-up, has developed Sovrin, a blockchain-powered platform for SSI. They work together with Indy. In "How to establish a self-sovereign identification wallet?" I explained how to generate SSI using Indy.

3. Blockchain-based identity verification

Implementing an ID management system, as I said previously in this post, might be difficult due to silos and the prevalence of manual procedures. The good news is that blockchain identity management solutions are now being offered by blockchain start-ups.

Blockpass, a blockchain start-up that provides blockchain identity management solutions, is an example. The following is how their solution works:

  • Blockpass offers a blockchain-powered “Know Your Customer” (KYC) site. “Blockpass KYC Connect” is the name of the ID verification portal.
  • Businesses in regulated sectors must adhere to strict KYC rules, which our portal assists with.
  • This site may be used for user onboarding by businesses.
  • For KYC and “Anti Money Laundering” (AML) compliance, this platform employs smart contracts.
  • The firm offers tools that are simple to set up.
  • Businesses may combine Blockpass services with their existing systems using their “Software Development Kits” (SDKs).
  • The “PASS” crypto token, which is ERC20-compliant, is used on this site.
  • Businesses can utilize the portal’s shared services for user onboarding and other ID management functions.

While Blockpass is a fantastic example, entrepreneurs may design their own "Decentralized Apps" (DApps) for ID management using blockchain platforms like Ethereum. DApps are similar to web applications, except they are open-source, use cryptocurrencies (digital currency), have a backend of smart contracts, and run on a decentralized blockchain.

4. Blockchain-based non-custodial login solutions

You trust a third party to keep your ID and password safe, whether you're login into your employer's network or an internet-based business. To keep your credentials safe, your company or another service provider maintains central servers.

These are referred to as "Custodial login solutions." These, like any other central server, are subject to hacking. Indeed, central servers are attractive targets for hackers, and such hacking instances are widespread.

With its decentralized networks and better security features, blockchain has the potential to change this. Blockchain-based solutions do not rely on central servers for authentication; instead, they are decentralized identifiers and rely on public-and-private keychains. These services may be used by the employer or a third-party service provider with the confidence that only trustworthy users are logging into their systems. Remme is an example of a non-custodial login service.

For "Public Key Infrastructure," Remme has an open-source distributed protocol (PKI). Because it is a decentralized network, internet-based service providers do not need to keep a huge number of user IDs and passwords.

Remme employs the following elements:

  • User registration, ID revocation, and other tasks are handled by master nodes.
  • Hyperledger Sawtooth is a Hyperledger Consortium enterprise blockchain framework.
  • The consensus algorithm for “Proof of Service”: This is used to validate blockchain transactions.
  • REM This is an ERC20-compliant digital currency.

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5. The decentralized web's identity management

Users' internet activities are tracked by a variety of third-party companies. For example, "Internet Service Providers" (ISPs) keep track of every site their customers visit, and third-party email monitoring services keep track of emails. Only because they have the user's personal information, such as their decentralized digital identity, is this feasible.

Users are increasingly searching for a decentralized web where they don't have to provide their personally identifiable information to access services. This, however, necessitates the use of a suitable decentralized digital identity management solution.

Users should be able to confirm their behavior on the internet using a single decentralized digital identity. They should also not be required to give it to every internet-based service provider. This is where blockchain can assist. Users can keep their digital ID on a blockchain network, which can be accessed by internet-based service providers for user authentication.

Metadium is a blockchain startup that accomplishes this with the help of SSI. They make use of a blockchain to allow users to develop their own SSIs. They have a public identification blockchain platform, a third-party developer protocol called "Meta ID," and a DApp called "Keepin."

6. User identity management for "Internet of Things" (IoT) systems

The "Internet of Things" (IoT) is fast infiltrating our lives, whether through smart appliances, fitness trackers, or remote patient monitoring (RMP) devices. Data is collected by all IoT-enabled devices and streamed to the appropriate service providers.

The Internet of Things (IoT) does not require any introduction. Hundreds of billions of IoT-enabled devices are already transmitting important data, with many more billions on the way. All communications from IoT-enabled devices, on the other hand, take place through the Internet.

This is a security issue, and if the gadgets gather sensitive information like "Protected Health Information" (PHI), the users will be put in grave danger. Users must have complete control over the usage of data from IoT devices.

Blockchain identity management for IoT devices should guarantee that users have complete control over the data acquired by the devices. In addition, such ID management should be secure enough to prevent hackers from gaining access to important information while it is in transit over the internet.

This use case is addressed by UniqueID, an illinois blockchain initiative. For device IDs, they use a distributed ledger. Because the platform does not require CA-signed certificates, users do not need to rely on third party companies. Users have complete control over their digital decentralized identities.

Conclusion

On 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 an identity management. In such a system that provides people with complete power, users will be able to 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, more convenient, and aid in the upkeep of a 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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