The digital identity or identity 2.0 is everything that identifies us in the online environment. They are all the personal data that we provide online, such as our name and surname, age, sex, address, email, photos, fingerprint, bank details, etc.
It is a large amount of data, and therefore its management is more complex. Without a valid form of identification, a person could not acquire property, vote, open a bank account, or find a job.
If we do not have control over our own identity, it is easy to become invisible and not be able to participate in society, because we cannot demonstrate that we are who we say we are. In this sense, one of the main challenges is to develop systems so that anyone can demonstrate their personal identity in the digital sphere.
The main conflicts over the use of personal data come from ignorance about its storage, who can access it or what is being done with the information. The European data protection law (EDPL) addresses some of these problems, but there is still no technological infrastructure that allows a totally secure exchange of data. Blockchain technology can play a crucial role in solving problems related to digital identity, they provide a route to guarantee more secure personal information, better access to personal data, and an immutable mechanism for recording who has used it. those data and for what.
Blockchain use cases
.Blockchain allows a new form of identification: Self-sovereign identity. Until now, when we provide our data to create a digital identity, this data is under the control of the one who provides us with the service, we are delegating the responsibility for the custody and management of our personal data to a third party. With a self-sovereign identity, all our personal data would be under our absolute control. Each person would be custodian of their digital identity, only they could decide what they share, with whom, for what purpose and for how long, they could even decide if they want to market with the use of their own data.
Blockchain enables a decentralized Public Key Infrastructure, a trusted and tamper-proof means to distribute identity holders’ asymmetric verification and encryption keys. This infrastructure allows all users to create or anchor cryptographic keys on the blockchain in an orderly and chronological tamper-proof manner.
By using a cryptographically secure blockchain combined with distributed data storage systems, it is possible to eliminate intermediary centralized data storage systems while ensuring data integrity. Decentralized storage solutions reduce an entity’s ability to unauthorized access to data to exploit it or to trade a person’s confidential information. Credentials are generally stored directly on the user’s device, so you can fully control access to your data.
Blockchain-based self-sovereign identities and decentralized management models that give the user absolute control of their identity create the possibility of monetizing this data.
Data monetization refers to the use of personal data to obtain an economic benefit. Currently, millions of data are generated online that are intangible, invisible and complex. With the self-sovereign identity, it would be possible for each person to monetize their personal data, for example, renting them to AI training algorithms or selling their data to companies. Users would also have the option of keeping their data hidden and protected from third parties.
Article 20 of the General Data Protection Regulation (EDPL) sets out the users’ right to portability, which is complemented by the right of access, and allows users to obtain the data they have provided to an entity (responsible for the treatment ). The right to portability also implies that the personal data of that user could be transmitted directly from one entity or company to another, without the need to be delivered to the user himself, whenever this is technically possible. This right improves the user experience, reducing the need to re-verify identity in various services and platforms.
With decentralized digital identities and verifiable blockchain credentials, it is possible to migrate pinned identities in one system to another in a simpler way. The registration process is simplified, increasing user adoption. Decentralized data portability also enables reusable credentials to be created, where the user can quickly re-verify their identity.
The world is undergoing a massive digital transformation, huge amounts of personal data are being generated, and a new way of managing and protecting all digital identities is necessary. Blockchain technologies can generate a context of decentralized identities where the user is the one who manages their data and establishes security measures. Security and privacy are the main aspects of this issue, the decentralized digital identity not only offers total control of personal data, but also facilitates its administration.
The various characteristics of blockchain can change an industry that is in a very complex point, its potential is enormous, and, combined with other technologies such as AI or biometric systems, it will test traditional data management systems.