blockchain Digital  identity

As a result of the proliferation of Industry 4.0, the scope of the technological revolution has exceeded many traditional approaches. The world is currently preparing to use autonomous and intelligent systems based on machine learning and data. The world of digital services is characterized by blockchain Digital identity is one of the leading elements. 

What Is decentralized Identity?

By leveraging a trust framework for identity management, decentralized identity enables users to generate and control their own digital identity without being dependent on a specific service provider. Using a digital wallet, “identity wallets,” users (the identity owners) can provide proof of their identity to third parties using digital identities approved by multiple issuers, such as employers, governments, or universities. By providing a single source of identity information, the wallet simplifies the process of giving and rescinding access to identity information.

The market research firm Forrester concludes that “decentralized digital identity is more than just a technology buzzword: It promises a complete restructuring of the currently centralized physical and digital identity ecosystem into a decentralized and democratized architecture.” 

Current Situation Of Digital Identity

Due to the sensitive nature of the information they accumulate about users, organizations face formidable challenges in digital identity management. Data about users is stored along with routine business data by these companies. While maintaining privacy-centric standards, organizations have to comply with regulatory requirements. Data locked in highly secure vaults can, however, barely be accessed by companies. Because of this, organizations were unable to utilize their digital identity management capabilities to the fullest extent. 

IoT services

The world will have over 10 billion connected devices by 2020, and the number might rise to 22 billion by 2025 as well. Identity is not just an issue for individuals and companies, but also for IoT devices. By 2025, there will be nearly 22 billion connected devices. Blockchain technology and digital identity: how does it apply to IoT devices? It is common for IoT technologies not to employ adequate capabilities for identity and access management. Despite this, IoT devices are sacrificed in terms of security as a result of implementing basic management capabilities. 

Identity fraud

To revolutionize how users can take advantage of their digital identities, a blockchain-based digital identity landscape must be more expensive. A user with a different identity could juggle usernames and passwords associated with a website. As a result of the lack of a standard approach, users cannot use data generated on one platform in applications on other platforms. Fake identities are also easier to create due to the limited connection between physical and digital identities. Blockchain projects involving digital identities could take advantage of cryptographic advances to deal with these issues. The development of new identity management systems can be facilitated by decentralized identification frameworks based on blockchain technology.

Data security

A common concern in identity information is the security of centralized government databases. Due to the fact that they are based on legacy software, the databases have multiple single points of failure. Among hackers’ highlights are the massive centralized systems featuring numerous user accounts and their personally identifiable information. A recent survey found that about half of the data breached involved personally identifiable information. Despite many security measures, businesses were still unable to recover $654 billion in losses due to breaches in consumer data in 2018.

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What Is Digital Identity In Blockchain Technology?

There are still many questions regarding the role of blockchain in digital identity, but blockchain technology has shown remarkable improvements in identity management. Digital identity is supported by blockchain technology in what ways? Let’s take a look at the decentralized digital identity system of Ethereum as an example. Identity management, decentralized identifiers, and embedded encryption are all key components of digital identity based on blockchain technology. Self-sovereign identity platforms are the only systems that can create and register decentralized identifiers (DIDs). Create a public-private key pair and store the public key on-chain instead of rotating the storage to avoid security risks. 

With cryptography, it is easy to secure decentralized identities, which is especially true when private-public key pairs are used. Identities can be verified with public keys, whereas messages involving identities can be decrypted with private keys. In order to understand what digital identity is in blockchain, you can identify how decentralized identities are implemented in actual use cases. QR codes would be required as proof of identity for those who wish to access specific services. By using the specific identifier, we can verify the legitimacy of the credential and determine whether it belongs to the relevant DID. 

Benefits Of Blockchain For Digital Identity

Technologies like robotic process automation and machine learning have become increasingly important for safeguarding digital identities. However, centralized identity management systems are more costly and less efficient when implemented with new solutions. 

Digital identity projects on the blockchain are an ideal solution to the problems associated with digital identity management rather than assigning control of identity data to centralized parties. Can blockchain help address identity management problems effectively? We discussed briefly some of the advantages posed by blockchains for digital identity in the context of digital identity in a blockchain with decentralized identifiers. Also, blockchain technology can be advantageous for digital identity management solutions in the following ways. 


As regulators are fuelling debates about protecting citizens’ personal and sensitive information, the privacy benefit of blockchain-based digital identity is another important value benefit. With the efficiency of blockchain encryption and the facility of digital signatures, “Privacy and Design” is guaranteed. In addition, digital signatures can protect all transactions against modification by making them resistant to modifications.


As well as simplicity is one of the main benefits of blockchain solutions for digital identity, but there is also another benefit. Every stakeholder should be able to simplify their processes through blockchain frameworks. It is possible to define clear roles for identity issuers, identity owners, and identity verifiers in blockchain-based identity management frameworks. 

Self-sovereign Identity

It has been shown how risky it can be for companies like Facebook and Google to manage and control users’ digital identities in the wake of the Cambridge Analytics/Facebook data scandal. The management of digital identity is complex, and internet users are unable to manage their digital identities themselves due to conventional systems.

At The End

As digital identifiers become more widely used throughout the world, they become increasingly essential for human well-being as they enable human rights such as voting, access to education, and banking participation. However, existing identity management systems have problems that signal a need for reform. Blockchain digital identity projects are a promising foundation for the transformation of digital identity management in the future. In general, Blockchain technology is a very effective and impressive technology.