Blockchain and Identity

Blockchain and Identity


Identity management is an ideal way to identify, authenticate, and authorize people to access specific systems or services. However, it has some security and privacy issues. Fortunately, blockchain technology can be a solution to those issues. This blog will guide you on what exactly Blockchain technology is, and how it can give power to identity management.

Identity theft has turned into a big business for cybercriminals. According to a survey conducted by the Harris Poll in 2018, alone in the United States, around 60 million people had been affected by identity theft.

Though several identity management systems out there, helping businesses authenticate and authorize their staff and customers, they are not fully secured.

Even modern identity management systems have privacy and security issues. The good news is that blockchain technology can be the solution to various identity-related security issues.

According to some experts, blockchain and identity management systems can work together to create a secure cyber environment.

Many security experts are designing new security solutions to minimize identity theft threats with the help of blockchain technology, a digital ledger program, which is focused on cryptocurrencies like Bitcoin.

Sounds interesting? Let’s find out what blockchain technology is, how does it work, and how it can help with identity management.

Fraud detection and prevention service from market leaders. Schedule a free demo here.

What is Blockchain?

DLT or Distributed Ledger Technology is referred to as Blockchain technology. It works behind decentralized databases that offer control over the progression of data between organizations through a peer-to-peer network, utilizing consensus algorithms, which guarantee consistency throughout network nodes.

In layman’s terms, blockchain is a distributed database that lives in multiple computers at the same time. As new collections of blocks are added to it continuously, it keeps increasing. Each block contains some digital records and a link to the preceding block so that they all can form a chain. No single entity or body does not control blockchain data. Instead, anyone in the network can get a copy of the entire database.

An ideal analogy for understanding blockchain technology is Google Docs. When we share a Google doc with a group of individuals, the doc is transmitted instead of transferred or copied. This creates a shared distribution chain that allows all the participants to access the document simultaneously.

All the amendments to the document are recorded in real-time, and making changes is completely transparent. Though Blockchain technology is much more complicated than this, you can get the idea of how this technology acts.

How Does Blockchain Work?

how does blockchain work
Since blockchain technology has endless uses in anti-money laundering and encrypted messaging platforms, it wouldn’t be wrong to say that Blockchain and identity management solutions can together help businesses track identities more flawlessly.

Let’s find out how blockchain technology works.

As mentioned above, blockchain operates by a peer-to-peer network, working all together to resolve complex mathematical issues and authenticate new blocks.

Once the data is saved, no block can be changed without modifying the subsequent blocks that include validation of the rest of the data on the network. This is the primary reason blockchain technology is highly secured and not vulnerable to hacking.

Now let’s get to know where this amazing technology has been used in the current scenario.

Verify customers identity within 15 seconds. Schedule a free demo here.

Where Can Blockchain Be Used?

Blockchain technology has a lot of uses in the real world. Already a lot of organizations are leveraging this technology to reduce data storage cost, get rid of duplication of data, improve data security, and minimize identity thefts.

Now let’s take a look at what kind of opportunities this technology gives to internet users.

The Sharing Economy

Companies like Uber and Airbnb are already taking advantage of Blockchain technology in a form sharing economy. Since the blockchain enables peer-to-peer payments, it opens the door to direct interaction between two parties.

Supply Chain Auditing

Nowadays, buyers want to know the ethical statements companies make about their products. Blockchain provides customers with a straightforward way to verify the backstories of the products.


Distributed database technology can bring complete transparency to elections or any poll taking.

File storage

Decentralized file storage has a lot of benefits regarding security. Distributing data throughout the network has fewer chances of getting hacked or lost.

These are some key uses of blockchain in different industries. Now let’s get to know how it can be used in identity management.

Blockchain & Identity Management

It is essential to manage identities carefully on the Internet, and blockchain technology can be exceptionally helpful in it. It provides advanced solutions that help in identifying users and their documents.

Experts in both the blockchain and identity fields are looking for ways to use this technology for prevalent identity issues such as fraudulent identities, data insecurity, and inaccessibility.

According to some blockchain experts who participated in a panel discussion about identity, a distributed tamper-resistant database can combat the monopolizing power dominating the identities of individuals.

Ensure your customers are real. Schedule a free demo here.

Life Cycle of identity management

Life Cycle of identity management
Also cited as identity and access management, identity management is a structure of technologies and policies designed to ensure that only authorized people get access to certain resources.

It is the procedure for identifying, authenticating, and authorizing people to have access to systems. Some people think that identity management includes only authentication and authorization, but indeed, there are numerous parts of the identity life cycle.

Remember, requesting identity is not adequate; you must understand how an individual was authenticated, and who approved the identity. For that, you need a system that can automatically check everything.

Now let’s check how identity fraud and theft can be prevented with blockchain.

Blockchain as Identity Management Solution

When blockchain technology and identity management are merged, users have to store their digital entity credentials on a digital wallet on their devices (like their smartphones). Digital identity credentials would be valid only if used by the same device, which was allowed to do so.

However, in case, if the authorized device gets lost, that user can use another authorized device, for example, their laptop. This is one case scenario, how blockchain can be used in identity management.

In the coming years, you may witness excessive use of blockchain and identity technology.

If you’re looking for advanced identity verification solutions for your business, get in touch with iDenfy. We offer various verification solutions such as identity document check, liveness detection, face recognition, and more.

idenfy superman