World Economic Forum panel pushes for blockchain-based decentralized digital ID

by Arthur · April 3, 2023

The Digital Identity Initiative of the World Economic Forum (WEF) has discussed the possibilities of agreeing on an international framework of policies and standards that will act as the springboard to increase the use of digital ID systems that put privacy at the top of all key priorities.

The panel believes that blockchain technology can help build such a privacy-preserving digital ID infrastructure, and in that way help organizations and authorities realize economic, health and social impact projects.

Discussions at the forum’s annual meeting workshop themed “Improving Livelihoods with Digital ID,” organized by its Crypto Impact and Sustainability Accelerator (CISA), explored ways digital ID benefits can be leveraged through a standardized approach, according to an article by Brett McDowell, chairman and president of decentralized and open source public ledger Hedera.

Hedera participated in the discussions on digital ID during the WEF’s recent meeting in Davos.

According to McDowell, the way to go is to have a blockchain-powered digital ID system that improves data protection and minimizes the incidence of data theft or exploitation.

This, he says, is even made much easier with the Web3 concept, which seeks to replace the middleman in managing digital ID “with public blockchain infrastructure where the user stores their digital identity metadata while keeping personal information offline in their digital wallet with verified identification signed by their various ID issuers.”

As McDowell writes, this means that whenever a user “presents a credential from the wallet to an application, it can verify the credential by checking the cryptographic signature against the original credential issuer’s public key, which has previously been published in a publicly accessible registry. ,” while allowing them to control how, when and with whom they share such information.

Digital ID systems built on such a model will not only increase public trust, but will also drive financial incentives with several positive outcomes.

Getting there, however, is not a smooth ride. For McDowell, that means significant work to be done, and one such thing is to draw important lessons from digital ID pilots and then apply them at scale with the goal of delivering “a fundamental building block for solutions to global challenges ranging from digital workforce transformation, to carbon asset MRV, to basic social challenges with exclusion and data exploitation.”