Among the many emerging blockchain technology application cases, electronic identity management and verification may be one of the most promising applications. In 2018 alone, billions of people around the world were affected by personal data breaches. There is no denying the need for more secure ways to store, transmit and authenticate sensitive information. In this context, blockchain systems may bring valuable solutions to solve the problems faced by centralized databases.

How to use blockchain technology in electronic identity systems?

Essentially, when a file is written to the blockchain system, the authenticity of the information has been confirmed by the nodes maintaining the network. In other words, "ordered declarations" by multiple users support the validity of all information.

In this article, network nodes can be controlled by legal institutions or government agencies responsible for validating and verifying recorded electronic data. Basically, each node can "vote" on the authenticity of the data, and if the security level is high enough, these verified documents can be used as official documents.

The role of cryptography

Identity system based on blockchain technology It is important to realize that sensitive information does not need to be shared directly or explicitly. Conversely, electronic data can be shared and authenticated through cryptography, such as hash functions, electronic signatures, and zero-knowledge proofs.

Using a hash algorithm, any file can be converted into a hash value, which is a long string of characters. This hash value represents all the information contained when it was created, that is, Like an electronic fingerprint. Most importantly, a government agency or other trustworthy organization can give the document official validity through its electronic signature.

For example, a citizen could provide his personal documents to a legal authority and have it generate a unique set of hashes (electronic fingerprints). The organization can then create an electronic signature that verifies the hash, meaning it can be considered an official document.

In addition, zero-knowledge proof technology can share and authenticate qualification certificates or identity information without leaking any information. This means that even if the data is encrypted, its authenticity can still be verified. In other words, you can use a zero-knowledge proof mechanism to prove that you are old enough to drive or can enter age-restricted places such as clubs without revealing your actual age.

Autonomous identity

Autonomous identity refers to a model in which , each user has full control over their personal data, which can be stored in a personal wallet (similar to a digital currency wallet). In this case, people can decide for themselves when and how to share information with others. For example, a user can store their credit card certificate in a personal wallet and then use their private key to complete transactions and send the certificate information. This way, they can prove whether they are the actual owner of the credit card.

Although blockchain technology is primarily used to store and trade digital currencies, it can also be used to share and verify personal documents and make signatures. For example, if someone has the qualifications of a qualified investor recognized by a government agency, he can hand over this fact to the broker for confirmation through a zero-knowledge proof protocol. Finally, the broker can confirm whether an investor has the correct qualifications without obtaining information about the investor’s net worth or income.

Potential advantages

Adopting cryptography and blockchain in the field of electronic identity Technology has two major advantages. The first is that users can have more full control over how and when their personal data is used, which can significantly reduce the risks caused by storing sensitive information in centralized databases. At the same time, blockchain networks can improve privacy levels through cryptography systems. As mentioned before, zero-knowledge proof protocols can prove the validity of a document without involving the details of the document.

Another advantage is that blockchain-based electronic identity systems are more reliable than traditional methods. For example, it is easier to verify a user's authenticity using electronic signatures. In addition, the blockchain system makes information tampering more difficult and effectively protects information security.

Potential disadvantages

Like many other use cases, in electronic identity systems There are still many challenges in using blockchain technology. The biggest challenge at present is that the system will still be very vulnerable when encountering malicious attacks such as synthetic identity fraud.

Synthetic identity refers to combining valid information from different people to generate a new false identity. Because every piece of information used to create the false identity is real, some systems will mistakenly believe that the synthetic identity is real. This type of attack is widely used by criminals for credit card fraud.

However, this problem can be effectively solved through digital signatures, and forged combination documents will not be recorded on the blockchain. For example, a government agency would provide a separate electronic signature for each document, while also generating the same electronic signature for all documents registered by the same person.

Another disadvantage is the possibility of a 51% attack, which is likely to occur in smaller blockchain networks. A 51% attack may cause the blockchain to roll back, that is, change its transaction records. This issue requires special attention in public chains that everyone can join, while private chains can effectively reduce this type of attack, because in private chains, the nodes are all public trust institutions. However, private blockchains also mean more centralization and less democratization.

Conclusion

Despite its many shortcomings and limitations, blockchain technology still has Huge potential to change the way information is verified, stored and shared. Although there are already many companies and startups exploring the potential of blockchain technology, there is still much work to be done. In the next few years, we will see more services focusing on electronic identity management emerge, and blockchain technology will be the core technology of these services.