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Blockchain Digital ID — Putting People in Control of Their Data

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  • Blockchain Digital ID — Putting People in Control of Their Data

    Although some people in life do an extremely convincing job of indicating otherwise, all humans have an identity. This identity comes in many forms, and as modern life has progressed, the ways in which people can identify have multiplied. Technology has now made it easier for people to explore and share their identities.

    But, at some point in the not-so-distant past, the internet overtook people’s ability to manage their identities online. Companies, notably the big data giants, have become the new gatekeepers. As the world enters a more data-conscious era, innovators in the tech industry believe that blockchain technology could be the solution.

    One of the most common goals across all blockchain-based identity projects is to put data back into the hands of those who created it. However, a decentralized identity network would look very different from the way data is gleaned now.

    Decentralization and encryption are key to securing personal data on blockchains. Instead of anonymous companies scooping up data once it is created, blockchain identity systems would store data on encrypted and decentralized networks. From there, users could grant limited access to third parties using keys.

    But, as anyone with a casual interest in tech will know, blockchain technology is cited as the miracle cure to most of society’s technological woes. It is expensive, difficult to explain to a regular person and, crucially, hard for companies to determine how to make it profitable. But that hasn’t stopped a significant number of use cases being developed and rolled out worldwide.

    Pay-as-you-go identity

    Payment and identity are closely linked. For hackers, compromising someone’s online identity, whether through password cracking or unlocking a large centralized database of personal details, is the digital equivalent of a gold mine. People’s online identities are also often attached to their financial details.

    Unfortunately for those whose details are leaked or hacked, online identity theft doesn’t require dodgy prosthetics or a wig. Hackers are constantly scouring the online realm for weaknesses, and stolen details are now one of the most commonly sold products on dark web marketplaces.

    This is where blockchain comes in. For Al Johnson, the CEO and founder of the Nuggets blockchain identity and payments company, blockchain ID systems give people the power to control their own identities:
    “A blockchain ID system adopts a user-centric approach, eliminating central points of failure by empowering individuals with self-sovereign possession over their own data.”
    For Johnson, payment and identity go hand in hand. When starting out in blockchain identity, Nuggets targeted identity and e-commerce. But Johnson soon realized that, as the ways in which people can pay online grow, so does the scope for identity solutions that can be solved.

    Johnson explained that as the company increasingly dealt with payments solutions and navigated the burgeoning regulatory structure surrounding identity online, he began to see the importance of blockchain and payments in creating strong digital identity:
    “To get the highest level of digital identity, you need to have transactions. You verify, you do biometrics, but the best thing you can get is to have the transaction proofs afterward. Now, when you put payment and identity together, you'll get a transaction proof probably three or four times a day.”
    Johnson explained to Cointelegraph that blockchain identity and payments create a strong digital identity through the number of verifications that are required in transactions from all parties involved:
    “When you make a payment, it’s checked with the merchant. It's being checked with payment and the gateway is being checked with the banks and the many other services you interact with. So, that trend is not only a transaction, it's a quadruple verification on each point.”

    EU is home to blockchain ID innovation

    Europe is fast becoming a fertile territory for blockchain ID projects. Although the EU has a number of initiatives to push forward blockchain innovation across its borders, Estonia and Catalonia are pioneering digital identity.

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