What Is Digital Identity In Crypto?
Our identity is proof of our existence to be able to integrate ourselves into the normal functions of society and economy. It is our identity that makes us acquire ownership and claims to valuables, properties, things, and a lot of other intangibles such as the ability to transact with others.
In its primary form, identity is the sum of who you claim to be such as your name, your nationality, or your date of birth, and then it can extend to your driver’s license, social security number, or passport number. A centralized government issues these to legalize your identity so you can interact in society, and stores your data in centralized servers.
However, not all persons have legal claims to themselves in one way or another. Statistics reveal that an approximate 1.1. billion people the world over are yet to own their identities legally. We can only imagine a vulnerable one-seventh of the world’s total population unable to open a bank account, own a property, find employment, or even to vote in elections. If a person cannot properly document his or her own identity, that person’s freedom is limited and access to economic and financial systems is critically jeopardized. Sometimes, even those with documented identities are unable to facilitate functional flow because their data were compromised by hacks, theft, and fraud. And recovering lost identities can be painstaking and costly to a lifetime.
Enter Digital Identity Management
Upon the entrance of digital technology into humanity’s realm, personal identity management has become necessary that identity owners are now seeking to manage it themselves in their online and offline activities. The accumulation of identity is the big data that is serving as a commodity that corporations have built their infrastructures upon. It has now become a major concern for them as issues of privacy security, and usability is on the rise. Expenses to protect high-value data are growing from $8 billion in 2016 to an expected $15 billion by 2021 since data govern interactions in the digital world. Big corporations and businesses have no way but to deal with it or else customer experience will be highly compromised.
Our digital identity is increasingly found in the many apps and services that we come across in an interlink of interactions. Three trends emerge:
- Improvement is necessary for managing identities to prevent attacks arising from identity theft, fraud, and cybercriminality.
- Decentralization to empower the identity owner.
- Increase the access to economy and develop efficiency of social services.
In tackling these trends, we take into consideration the archetypes that the 2018 World Economic Forum identified in managing identity in a digital world:
- Centralized identity systems. This is where a central entity creates and manages identity. It typifies the direct relationship existing between the government and the citizen, examples of which include the list of voters and the land registry system.
- Federated identity systems. It is where interoperable systems make institutions trust-anchors with their stand-alone systems. The primary data entered in one institution can be accessed through regulation by other institutions to confirm the identity of an individual of secondary nature.
- Decentralized identity systems. This is where the identity owner over his or her identity is stored in a centralized identity hub for general purposes. It will be a source of credentials for any institution needing proof of identity of a person after being validated by the identity owner to access the hub.
The Blockchain Solution
Using blockchain technology in managing identity systems can be an effective tool in mitigating confounding issues like identity fraud, data insecurity, and inaccessibility.
The digital identity landscape is fragmented in a way that users employ different usernames across different platforms. A weak link exists between offline and digital identities making it easy to create a series of fake identities. Thus, it can lead to interactions of fraud causing lost revenues and inflated numbers, including the dissemination of fake news.
Personally identifiable information (PII) is the most targeted data for breaches and hackers are feasting on centralized government databases operated by legacy softwares with a number of single points of failure. Consumer data are exposed by the billions with worth of hundreds of billions lost.
There are about 1.1 billion of the world’s population that do not have any proof of identity, and 45% of them belong to the poorest 20% on earth. Poverty, lack of knowledge, and cumbersome processes keep them outside of conventional identity systems. Without identity to show, they often cannot apply for jobs, or enter school, or open a bank account.
On the other hand, 60% of the 2.5 billion unbanked own mobile phones which can be entries to solve longstanding identity problems. By using blockchain infrastructure, cryptography, and smartphones, decentralized identifiers (DIDs), and the self-sovereign identity (SSI), sophisticated identity management systems can be built.
In these digital times, much has changed in the management of identities and their importance now cannot be overemphasized. Via blockchain technology, identity management solutions are at hand to hand you back control over your personal data out from the hands of industry giants. Refugees who are at a loss with many identity issues can now be addressed such as no country, no documentation, no money, no bank account, no property ownership, no business. Being a non-entity excludes you from any societal participation. Bureaucratic processes can be eliminated in acquiring passports. Patient data security is enhanced to prevent data breach of sensitive medical records. Intellectual property is also protected and Know-Your-Client procedures are simplified.
eQapital is relevant now more than ever in catering to the present needs of the digital investor. Financial services from Trust, Custody, Exchange, Transfer, to Asset Management needs are strategized on blockchain to empower you to control your funds, whether fiat or crypto. Security is in place with AML/KYC/CFT procedures. Our friendly eQapital Team is always ready to assist you 24/7. Give us a call now and be partners towards achieving your progressive financial health goals.