By Joe Liebkind.

We have identified ourselves the same way for hundreds of years. Authorities at borders, bartenders, banks, and the police identify us using a card with some personal details and a photo and a way to verify the card’s authenticity.

It’s not a bad way of doing things; it has largely proven effective at supporting the foundations of an orderly civilization. Ideas like citizenship, property ownership, trade, and marriage rely on the ability to prove an identity, so it’s important to keep it safe.

However, as technology improves, large portions of our lives have moved online. News, work, entertainment, and money are now more in binary than in print. But what about IDs? We still use physical ones because they’re cheap, safe, and are somewhat difficult to fake. But are they the cheapest, safest, and hardest-to-fake solution? Decidedly not.

Blockchain may be the solution to bring the notion of identity into the 21st century.

Blockchain is the key

I don’t think we can avoid carrying a physical object to identify ourselves with, but it no longer needs to be a full ID card. Thanks to the blockchain, we can create an identity system that uses only a fraction of the information we use now.

While the internet used to rely on centralized hubs to handle traffic, blockchain allows the same network functionality but splits the bill between the users themselves. To store data, use bandwidth, or route traffic, blockchain can securely employ fractions of your computer when you use applications built on it.

Reliance on a distributed network has vast security benefits, as hackers cannot interrupt the network or gather any data from a single breach. Even if they could break in, there would be little useful data to steal.

While an identity should ideally remain yours, identity theft is a reality. Centralized systems (like apps, websites, etc.) ask us for our identity when we use their platforms. Each of these interactions is a weak spot, as your sensitive information is essentially in every online service you’ve ever used.

This is where blockchain can help. It can verify a transaction’s authenticity without knowing the identity of the user behind it. Cryptographic hashing preserves the integrity of the ledger but uses a 256-character encryption system and private keys to keep the process anonymous. This essentially allows you to keep your identity to yourself without limiting the services available to you.

The dual ability of a system to securely reach consensus without flawed infrastructure makes blockchain the missing piece in cybersecurity.

Innovative companies are already working on pushing the boundaries of this idea.

Startups are on it

SelfKey and other companies like Civic believe that blockchain is secure enough to support processes like identification, financial services registration, residency, and more.

SelfKey’s system focuses on the idea of a self-sovereign ID. This approach seeks to build the identity infrastructure from the outside in, offering a full range of services that would otherwise be needed for a physical ID.

Applications for residency, passports, bank accounts, insurance, and the formation of LLCs and other businesses are possible with KEY, the company’s cryptocurrency that they hope will become universal. “Starting immediately after the public token sale of KEY tokens […] the SelfKey identity wallet and marketplace will enable discovery and straight-through processing for financial services sign-ups across Asia,” says company CEO and founder Edmund Lowell.

Civic is another platform that seeks to revolutionize identification but in a different way. The company’s crux is its use of mobile biometrics, like the fingerprint unlock functionality on some smartphones and laptops. To safely support an identity system like this on a phone, the app must use a third-party key generator so that it doesn’t know a customer’s private keys.

A blockchain system can not only identify people but objects as well. RFID tags and other IoT-supported devices can be tracked at the granular level with blockchain’s ledger, making warehouse robots and handling inventory much more efficient. Skuchain, a blockchain platform focused on enhancing supply chain management, already tested their blockchain logistics solution, which successfully exchanged money with various stakeholders involved in shipping bales of cotton to China, with no human interference.

For these kinds of ideas, and the others working on blockchain-based IDs, adoption is critical. Financial blockchain applications have already realized that no matter how revolutionary their product, they must be willing to comply with current regulations or their chance will never come. For identification, this idea is even more relevant.

But this area is always making progress. Many companies and even governments are embracing blockchain as an answer to the problem of identity crime. SelfKey’s services are already available in several jurisdictions, but they can only do so much. It falls on the consensus of users to determine which blockchain platforms fail and which become the new standard.

Forming your future self

The outmoded methods of identity management are due for an overhaul. Improper ways of storing and sharing our sensitive data put us and our families at financial risk daily. We are increasingly becoming more aware of this need in the wake of events like the recent Equifax breach, where a single hack was responsible for disseminating the personal details of millions of people. Months later, they are still suffering fraudulent activity.

It’s time to move to a decentralized way of identification. The responsibility for keeping someone’s identity safe should fall on them exclusively and should not be put at risk every time they make a purchase or open a new account.

Whether from the hard work of companies in the private sector or the proprietary work of the government, blockchain is inevitable.