Identity management (sometimes referred to as Identity and Access Management [IAM], IAM or IDAM for short), is the practice of restricting who may gain access to certain types of information, technology or services after successfully logging onto websites or apps and completing login processes. IDAM may be applied in multiple contexts: for personal browsing use as well as work use of technology; as regulations tighten around data collection, storage use sharing in response to older less secure identity management systems' causes such as data breaches, hacks and unintended sharing of peoples sensitive data by accident.
These issues can be quickly and effectively addressed with blockchain identity management technology, which offers improved security, efficiency, data accuracy and accessibility. Blockchain identity solutions have rapidly gained in popularity because they offer secure yet cost-effective means of managing digital identities; users store credentials and ID info within an ID wallet application on the blockchain that instantly verifies it without contact between issuer and receiver; further granting more control of personal information with ID wallets.
What Is Identity Management?
Identity management encompasses a series of procedures, guidelines, and technological tools designed to ensure only individuals authorized can gain access to technological resources or services. Systems used for identity and access management constantly adapt in order to enhance both user experience and security.
Problems With Current Digital Identity Management Systems
Digital identities comprise an individual or organization's online profile. A digital identity includes their usernames, purchase histories, ID numbers and search histories - these forms of data make up our digital personas which primarily use federated or central authentication systems as its foundation to connect almost all internet-based identities.
Due to a global proliferation of privacy laws such as California Consumer Privacy Act (CCPA) and General Data Protection Regulation (GDPR) of the EU, businesses may face risks as they collect and retain user data. GDPR represents one of the strictest privacy and security regulations globally applicable even to organizations outside EU borders that gather such data about EU individuals.
Data Breach Risk Associated With Federation And The Centralized Identity Management Systems
Centralized identity management refers to the collection and archiving of user data by one authoritative body, while federated identity management allows authorized users to sign into various applications using Google or Facebook login credentials and gain access multiple applications with just a single set of credentials - also referred to as single sign-on (SSO).
Identity systems with centralization or federation pose significant risks of data breach and identity theft for their users, leading to identity theft in particular. Hackers could easily gain access to user data stored centrally - over 97% of breaches over recent years involved PII data being breached. Furthermore, single point failure could present problems. Federated systems allow login but all websites using that account could potentially become vulnerable if their password is stolen.
Bad User Experience Managing Many Login Accounts
Centralized identity systems present several problems to users when creating accounts or apps; one being their need to create new passwords every time someone registers online; this leads to more personal data being added online and information that must be managed, with each person typically creating 100 passwords - increasing security risks exponentially as accounts proliferate online.
Digital Identity Blockchain
- Faster: Due to congestion, transactions on other blockchain platforms often took an inordinately long time for completion.
- Most economical: At that time, there weren't many effective means of conducting transactions.
- Customization: As part of our effort to deliver optimal services to consumers, our public, permissionless blockchain has been designed specifically for use cases that involve decentralized identities.
- Priority: On our own chain, we stand as an outstanding application compared to others where there may be risk that other projects take over our place.
Verifiable Credentials issued are stored off-chain in digital wallet apps belonging to their holders; only DIDs of both issuer and holder as well as Credential Schemas ("templates") and Revocation Registries can be entered onto Dock chain in order to protect data privacy.
Digital Identity Blockchain Examples
- Secure Identity Verification: Blockchain-based digital identity systems enable individuals to quickly and securely verify their identities for various uses, such as opening bank accounts and accessing public services. Since these solutions do not depend on third-party verification services or enable identity theft and fraud to take place, blockchain offers greater security when verifying identity documents.
- Healthcare Records: Patients can safely verify their medical histories and create and maintain digital identities while healthcare providers do the same, leading to better care being delivered as well as ensuring data security and privacy.
- Supply Chain Management: Information regarding the supply chain can be tracked and managed with blockchain-based digital identities that provide increased security and transparency, offering increased product authenticity protection while combating fraud/counterfeiting by tracking movement of goods through their supply chains and assigning products digital identities. Supply chain managers can ensure product authentication while stopping fraud/counterfeiting by giving products digital identities during transit across their supply chains.
Affordable And Repetitive Anti-Money Laundering (AML)
Users, third parties and verifying organizations all play an active role in Know Your Customer onboarding processes. Financial institutions must follow anti-money laundering protocols as an integral requirement, with many nations possessing stringent anti-money laundering legislation that requires compliance with this procedure. it's estimated that global spending on AML/KYC data and services could reach $1.6 billion globally.
Conventional methods of verifying user identities, documents, and background can often be time consuming and costly - particularly for KYC companies which need additional resources in order to meet client demands across industries like banks, healthcare providers and immigration authorities.
Identity Theft
Key statistics about identity fraud:
- Every year, identity theft costs the world billions in financial losses.
- Identity fraud continues to harm children as victims, particularly through credit card scams and misuse of Social Security numbers. Over one million children were victims alone of identity theft due mainly to credit card scams or misuse.
- By 2021, government benefits fraud will become the leading form of identity theft followed by credit card scams and ATM/debit card thefts.
- 87% of customers who access emails, bank accounts or financial data online leave personal data vulnerable.
Lack Of Data Control And Ownership
With today's centralized identity systems and their frequent data breaches, individuals often do not possess ownership and control over their personally identifiable information (PII). Without knowing exactly where it resides or whether its data has been distributed without their knowledge.
Inaccessibility To Official Identity
About 1.7 billion adults globally lack banking access and one billion individuals don't know how to authenticate themselves as identity holders - this makes accessing government services, finding employment or enrolling in school difficult without an ID document.
Read More: Benefits Of Blockchain In Different Business Environment
Key Features Of A Blockchain
These are the key advantages of blockchain technology:
Decentralized, shared database (distributed ledger)
Contrasting with the limitations posed by traditional, centralized data storage solutions, blockchain technology ensures every computer on a network has access to a copy of its ledger and can verify each transaction before adding it - increasing transparency while upholding integrity with this record-keeping system. A majority agreement of computers can add transaction blocks onto it allowing no single point of failure being introduced by decentralizing storage solutions such as blockchain.
Tamper-resistant
Information added to a blockchain cannot be changed or edited once transaction blocks have been included; creating an irreversible network that preserves accuracy and integrity while building stakeholder trust.
Highly secure
Blockchain utilizes cryptography - the branch of computer science focused on using codes to protect information against unapproved access - in order to store transactions, including credential details. Personal identifiable information does not remain on the blockchain itself but instead anyone can verify whether a Verifiable Credential was actually issued by its stated issuer on file in their blockchain wallet.
Transparent and auditable data
Data in blockchain networks are verified, with all users having the ability to track recorded transactions - creating an audit trail of transaction history.
Enables privacy and consent
Globally, laws protecting citizens' privacy have become more widely-accepted over time. One such law prohibits sharing data without first receiving express consent of its user; individuals store their personal data using an identity management system utilizing blockchain technology that stores it all securely for them alone to decide if and when it should be shared or not shared; furthermore, this technology also makes validation possible without disclosing personally identifiable data that exceeds what's necessary; one could verify they're older than 19 without disclosing actual birth dates etc.
Consensus maintains identity data integrity
Consensus mechanisms on blockchain networks employ consensus procedures to prevent transactions containing incorrect or potentially fraudulent information from taking place, while simultaneously upholding legality in transactions and overseeing governance on their networks.
Benefits Of Blockchain Identity Solutions For Organizations
Blockchain provides data security by placing user's own information within their own storage capacity; hackers cannot simultaneously gain access to massive quantities. Identity verification and authentication procedures: Blockchain significantly accelerates identity verification procedures using cryptography for data validation checks that enable instantaneous credential authenticity checks without needing communication with the issuer.
Cryptography offers significant cost reduction: Because cryptography verifies data authenticity instantly and without needing to reach out directly, credentials can now be instantly validated without contact between issuer and recipient; thus reducing staff and resource requirements significantly for verification processes. DIDs (digital decentralized identifiers) allow device owners to cryptographically prove ownership over devices as well as any related data and avoid identity theft by instantly verifying ownership with cryptographic verification tools such as DIDs.
Facilitates legal data compliance: Thanks to its privacy features that enable individuals to manage and share their own personal information without explicit permission required from third-parties, distributed ledger identity management makes compliance with privacy regulations such as GDPR and CCPA more affordable, straightforward and efficient for organizations. Expands accessibility: Blockchain can give anyone with a mobile phone --even those in underdeveloped nations-- access to verified identity through portable phone apps that exist across blockchain-powered identity platforms.
The Future Blockchain Identity Management
Market Research Future has predicted that by 2030 the blockchain identity market will reach 17.81 billion with compound annual growth rate estimated to reach 56.60% from 2024-2030. Government initiatives designed to further the advancement of blockchain technology development should play a role in driving this expansion of market value.
Due to North America's highly advanced infrastructure and technological developments, North America currently holds the largest market share for blockchain identity management industry. Retailers continue to seek ways to enhance data security. Digitization across various industries such as manufacturing, healthcare and retail is also contributing to this growth trend; Blockchain identity management solutions may offer effective protection from data breaches or cyberattacks.
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Conclusion
Identity and access management refers to a framework of policies, tools, procedures, guidelines and techniques intended to ensure only authorized individuals may use technological resources, data or services. According to Market Research Future's projections for 2030's blockchain identity market valuation of 17.81 billion by 2030 with compound annual growth estimated to reach 56.60% from 2024-2030 due to government initiatives supporting blockchain tech development across both developed and developing nations which may contribute towards its market expansion.
Due to North America's advanced infrastructure and technological developments, North America currently holds the largest market share for the blockchain identity management industry. More retailers than ever before are seeking ways to strengthen data security with technologies like BID.
