The days of an old and tattered social security card tucked in your wallet are gone. With the rise of digital finance and the massive explosion of online identity, consumers are being faced with huge levels of identity insecurity like never before.
With the explosion of online identity, criminal identity activity has increased in commensurate ways. In fact, last year alone, one in every 16 Americans were the victim of identity theft (15.4 million), with many of those breaches lasting an extended period of time.
The average cost of identity theft is also rising, with a single occurrence now costing victims approximately $7,800. And with online identity easily had, as evidenced by breaches such as that of Equifax, cybercriminals are able to have access to information about victims like never before.
What has been done so far?
To date, technology has not kept pace with the increasing risks of digital identity theft. In fact, quite the contrary. Legacy systems being used to protect central repositories of identity data are sorely outmoded, and often unwatched. The fact that the Equifax database had admin/admin as username and password should indicate that little has been done for consumer protection on most networks.
Government databases are no better. The fallout from the SEC hack continues to malign government agencies, as the reality that much of the filing done on the EDGAR system was wholly compromised for businesses by hacking. Even the IRS is not without its share of hacking woes.
Self-sovereign Identity
With all this risk, many want to take protection of their identity into their own hands, rather than relying on institutional systems. This protection would require the control of the identity to be placed back into the hands of the consumer, rather than being carried on corporate databases. But do most consumers have enough tech awareness to maintain their own digital identity?
While the answer may have been no in the past, the introduction of blockchain technology into the arena has provided a new and elegant system for the control of digital identity. SelfKey, the open source consumer friendly identity protection platform, is offering consumers a way to control their digital identity autonomously.
SelfKey brings back control over individual identity for the consumer. It also enables the individuals to grant access and authentication to other consumers and businesses by “certifying” authorities or notaries (granting permission to access identity), thus building an ecosystem around identity.
Why Blockchain Can Work
The reason why blockchain technology may hold the answer is because of the distributed nature of the platforms. Data is held and witnessed by every user on the network, and therefore, hacking into and piecing together all the datapoint would be nearly impossible for hackers. And because the only access point is through a privately held key, the entry barrier is insurmountable.
Blockchain platforms like SelfKey have the power to protect individuals and change the way data is shared. The system virtually eliminates identity theft because the blockchain protocol ensures that authentication can only happen under the direct control of the owner of an identity.
Unlike legacy systems, where identity could just be “authenticated” via information possibly stolen from other databases, blockchain platforms control access by requiring personal identification keys which are held exclusively by the individual.
Further, because data is stored on users’ personal devices through a decentralized format, there is no centralized database where hackers can target for personal information. On many of these platforms, like SelfKey for example, the company itself doesn’t even have access to the data, making personal identification completely user-controlled and secure, and making it impossible for data holders to monetize consumer information.
The concept is exploding, with other enterprise-level companies getting on board as well. IBM sees identity protection to be one of the greatest uses for blockchain, and even Forbes has recently offered the technology as a means of self protection.
Blockchain as True Capitalism
The concept of blockchain technology is really the effect of true free market forces working within the scope of identity. Because our digital identity can cause us great harm, the power to protect that identity should be held by the people.
Blockchain is bringing that power back into the hands of the individual consumer, providing self-sovereign control over identity, and releasing consumers from the grip of authoritarian control structures.
