The Challenges of Digital Identity

Challenges of Digital Identity

According to the World Bank’s ID4D database, nearly one billion of the world’s 7.6 billion people lack legally recognized identification. The remaining 6.6 billion people have some legally recognized identities, but only 3.2 billion people have access to the digital world, while 3.4 billion people have no digital trail, which means they may not be able to use their identities effectively and efficiently online.

With rapidly penetrating digitization, it is no surprise that digital identity for one and all has become a critical requirement for both consumers and businesses. Digital IDs that are remotely verifiable can help billions of people unlock access to many opportunities beyond geographical limitations.

Indeed, a significant section of society uses digital identities for daily tasks such as accessing government benefits, bank accounts, education, etc. In fact, some services are totally inaccessible without a digital identity. Yet, digital identities need deeper penetration, especially in regions like Brazil, China, Ethiopia, India, Nigeria, and even the United Kingdom and the United States. A well-designed digital ID not only allows for civic and social empowerment but also can fuel genuine and inclusive economic gains. However, simply digitizing existing identity verification processes is not easy. The risks and potential for digital IDs misuse are real, and they require careful consideration.

What digital ID should do
Where digital ID is currently failing
What can NamaChain do?

What digital ID should do

Normally, a ID is verified by presenting physical documentation in person for review; once checked and verified, official identification can be issued. The process may not be quick, but it does work.

Digital ID is intended to do away with physical documents entirely – including during the initial verification process. Given that over 1.5 billion people worldwide currently have no way to prove their identity, ‘paperless’ verification is even more important.

Digital IDs will grow and evolve as the technology matures, but there are three key features that are required to drive uptake:

Verifiable and trusted

ID is only useful if it can be trusted – and it can only be trusted if authorities, regulators and other stakeholders can verify it.

Portable and interoperable

Although designed to facilitate international travel, passports are accepted as proof of identity virtually everywhere; digital IDs will need to replicate this functionality across multiple services.

Secure

Digital IDs must be properly protected against loss, theft or corruption. If the integrity of the platform is compromised, the IDs issued cannot be trusted, making them effectively valueless.

Where digital ID is currently failing

Initial digital ID efforts have been surpassed by self-sovereign identity (SSI) systems. SSIs exist outside the control of a single organization to give users greater control over their identity and personal information.

However, problems persist even with SSI:

Encryption key management

The encryption key that protects the individual ID is crucial. Stored on the user’s device, the key is susceptible to loss or theft, compromising their ID.

Technology fragmentation

There are several blockchain-driven SSI solutions available, but very little interoperability between them – or the decentralized applications individuals need to use.

Privacy and security

Undeniably strong, traditional blockchains can be hacked – if a user loses their personal encryption key.

Technical complexity

SSI solutions can be too complex for use by less technically-able individuals, or for deployment in rural areas.

What can NamaChain do?

SSI is a viable digital ID solution – when combined with the right blockchain foundation. NamaChain overcomes many of the challenges discussed here because it takes a slightly different approach:

  • When they acquire a digital ID, every user is assigned a public and a private encryption key for identity verification. The encryption key is not stored anywhere, so it can’t be stolen or used by hackers to compromise the ID system.
  • The NamaChain ID is portable, allowing authenticated users to move their identity between services as required.
  • The NamaChain blockchain offers superior interoperability so it can be built into any authentication mechanism for ID reuse.

The NamaChain identity platform integrates individuals and organizations with devices and services to enhance user privacy, security, and control – and to deliver trusted, reliable digital ID services.

To learn more about NamaChain and how it will revolutionize your digital ID programs, please get in touch.

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