Identity theft? Don’t worry, blockchain has got you covered…

by Arthur · October 5, 2022

It appears that identity theft-oriented crimes have become a problem area. This is believed to have a negative impact on the growth of developments based on the digital economy. As questions prevail over the security of the digital identity sector, experts believe that blockchain use can help solve issues around identity management by ensuring self-sovereignty through decentralized networks.

Insights from a research report published by Market Research Future (MRFR), a market analysis company, stated that the blockchain-based identity management market is expected to reach $17.81 billion by 2030, with a compound annual growth rate (CAGR) of 56.60%. “Blockchain has the potential to benefit many industries in terms of transparency, security and business-enabled value addition. Thus, it is on the verge of transforming the current function of identity management in a secure manner. Blockchain-based solutions to remove the dependence on various government-authorized identifications ( IDs) such as voter ID, passport, pan card, among others. The blockchain ecosystem is believed to be cost-effective and time-efficient for the purpose of data acquisition around digital identities,” Amanjot Malhotra, India Country Head, Bitay, a cryptocurrency exchange, told FE Blockchain.

Market behavior suggests that blockchain solutions around digital identity protection can help provide benefits such as implementing unique identity (ID) for users, ensuring user consent, creating a decentralized database for identity protection, and helping to create a universal ecosystem. In 2013, Ryan Shea and Muneeb Ali founded Blockstack, which helps users protect their digital identities through the elimination of digital intermediaries and allows users to have full control over their digital privacy.

“Blockchain computerized identity activities can make use of mechanical progressions. Blockchain can help develop new identity frameworks with advanced identity systems that highlight decentralized identifiers. Instances of blockchain identity management execution include Blockpass for Know Your Customer (KYC), Remme as a provider of non-custodial login, among others,” said Vikram R Singh, founder and CEO, Antier, a blockchain company. The idea of blockchain identity management can be implemented across various businesses such as banking and finance (BFSI), logistics and transportation, real estate, creative arts and public projects such as e-governance.

Industry data also suggests that blockchain’s use of smart contracts prevents data manipulation, ensuring that linked identity management systems remain secure for identity holders. “Smart contracts can help ensure that only authorized parties can access proof of identity. Since blockchain has no geographic boundary, identity management becomes universal,” said Ramkumar Subramaniam, co-founder and CEO, GuardianLink, a blockchain-based research and development organization.

Reportedly, blockchain networks such as Ethereum, Polygon and Solana have all implemented identity management protocols. The Smart Nation initiative in Singapore introduced the use of digital identity which refers to the National Digital Identity (NDI) system to help citizens avail the facilities of an e-governance system. Founded in 2016, Civic, a blockchain-based identity management platform, operates within a given framework and focuses mainly on identity management and security.

Also read: What is Tokenomics and how does it work?

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