This article was first published on Chainlink
In the off-chain world, “Digital Identity” (D-ID) refers to the aggregated information that is collected by various parties and platforms when a user spends time and conducts activities online. Data such as a user’s search history, social media activity, transaction history, usernames and passwords, call records, SSN, date of birth, credit history, medical history, and other important information routinely finds its way and is stored online, ultimately building a unique profile spread across multiple databases—each user’s Digital Identity.
Users have at their disposal a range of authentication and security tools to protect their data, but even the most secure online platforms can be hacked, leading to exposure of sensitive aspects of a user’s D-ID and putting them and the platforms at risk of identity theft and fraud. In fact, multiple studies have shown that hacked or leaked personal information is among the most frequently traded products on the dark web.
The way D-ID functions on a blockchain, by contrast, is at once more public and more private. Blockchains are decentralized, immutable ledgers (or databases), allowing for individuals to transact peer-to-peer while maintaining consensus concerning the ledger/data, ultimately creating a source of shared truth. Blockchains are public in the sense that any participant or even outsider can audit every transaction and address, and they’re private in the sense that, unless they’re explicitly permissioned, blockchains require no KYC (Know Your Customer) and users can participate anonymously with their blockchain addresses possessing little or no link to their off-chain identities.
One especially promising use case for blockchain technology is to improve the D-ID experience by applying the best features of blockchain technology to legacy D-ID systems. Though the architectural details vary, a blockchain-based D-ID solution would ideally allow users to selectively choose with whom and when they share their ...
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