What ties movies like Face Off, The Net, and The Talented Mr. Ripley together? The theme of identity theft. Given the amount of data you share about yourself online, it is far easier today for someone to steal your identity than it was back when these movies were released. Without a valid form of identification, you will not be able to rent a house, access your bank account, vote, travel, etc. In short, your life would be relegated to that of a spectator.
In the physical world, you may have a single card with all your details that can be presented on different occasions. In the virtual world, things are a little different.
Every time you set up an account with a shopping portal or a community message board, you share certain personal details. This data is stored individually by each portal. Since the accounts may have been created at different points of your life, the data may not always be the same.
For example, your residential address and phone number may change from time to time. Thus, as the number of online platforms you use increases, the number of clones of your digital identity also increase.
This creates difficulties at multiple levels. You need to create multiple IDs and passwords to access the data on each platform. If any part of the data needs to be corrected, it must be done separately on each platform. This is highly inconvenient but more importantly, is a huge security risk. A hacker needs to break into just one platform’s database to get access to the personal details of multiple users.
Thankfully, there is an alternative; digital identities that use blockchain technology.
Advantages Of Blockchain Technology?
Blockchains work on the premise that data is not stored on any one particular server but are stored in a decentralized way so that the data can be accessed by multiple connected enterprises. What’s important to remember is that this data can only be read by the different platforms and cannot be edited in any way. Also, copies cannot be made of this data.
Let’s take a more in-depth look at some of the other advantages of this technology.
Easy to Update
Since a person creates his or her digital identity only once using this technology, there is no issue of identity clones existing with variations of the data. If and when you do change your phone number or your address, updating your digital identity is easy as it needs to be done only once. This change will then be reflected at all the portals that access your personal data.
More Secure
No third party is involved in the creation of a digital identity that is based on blockchain technology. Thus, the user himself has full control over the data being stored. The user controls whether the identity can be viewed publically or privately. Since the data is stored in a decentralized manner, hackers cannot break into a website or platform and steal your identity. Thirdly, since the data is not stored on a physical device, it is not susceptible to malware and other such viruses.
Simple KYC Verification
Currently, every time you sign-up to a new service especially with regard to banks, your details must be verified and validated. This is a time consuming and cumbersome process. Blockchain technology eases this process by allowing banks and other services to access your digital identity without having to undergo the entire process of due diligence each time. For banks, it offers the added advantage of allowing them to monitor transactions and access relevant information that can help identify and prevent fraudulent transactions.
The Challenges Ahead
Despite its benefits, building digital identities with blockchain technology is not without its challenges. Foremost amongst them is the integration required between the public and private sectors and over geographical and institutional borders. The Platform for Good Digital Identity launched by the World Economic Forum and ID4D Initiative by the World Bank are examples of the cohesion required to make this a possibility. These digital identities must be accepted not only by financial institutions and e-commerce portals but also by governmental agencies.
That’s not all. The key through which each digital identity is maintained must also be secured. What if situations such as the person were to lose their memory must be addressed? One of the ways to do this is by allowing additional verified users access to the data. However, this is a tradeoff between decentralization and security. The ideal solution is still to come.
Conclusion
Protecting one’s digital identity is indispensable in today’s online world. While blockchain does offer the technology to guarantee security, it is still in its nascent stages. Only as the technology evolves and is put in use will solutions be discovered for its many challenges.