What is Digital Identity?
We all know who we are. But when we want to interact with other people or entities, we need to supply them with parameters to identify us and verify that we really are who we say we are. Most of the time, this information is supplied to them from identifiers we provide: our name, address, email and phone number; and other sources such as third-party verification entities who collect data on us.
In the last two decades, biometric identification has become increasingly possible through technological advancement. There are different types of biometrics, including fingerprinting, facial recognition, iris scanning, DNA testing, and voice recognition. These biometrics help us identify people and verify their identities. Biometrics are important because they give us unique identities that are very hard to falsify and can be used to reliably identify an individual.
What is Digital Identity (DID)?
Identity management has been a key issue since the beginning of the Internet. Billions of dollars have been spent on usability, security, and privacy. Your digital identity is a combination of many different aspects. It includes your name, address, phone number, email address, social media accounts, credit card details, bank account details, medical history and more. All these things together make up your digital identity. The data comprised in your digital identity is very valuable, which makes it very important to protect this data as much as possible.
What is digital identity management?
Digital identity management is a process of determining whether a person is who he or she claims to be. Digital identity management is a broad term that refers to the process of identifying and authenticating a subject or user, whether they're online or offline. Traditionally, this was done by relying on a central authority.
On the blockchain, digital identity management allows for trustless interactions between a user and the decentralized platform on which they operate. It creates an auditable trail of transactions, which could be used in legal or regulatory proceedings, should fraud or other crimes be discovered.
When you create and manage your own digital identity, you can use it to decide who you share your identity with. There is no longer any need for third-party processors since you can verify your interactions yourself.
What can blockchain do for digital identity?
Every year, millions of dollars are spent on usability, security, and privacy for digital identity management.
A trusted digital identity is at the heart of securing any online transaction because authentication and authorization decisions all rely on the assured identity of the communicating parties. However, ensuring the identity of parties engaged in cross-network transactions can be particularly complex and operationally difficult.
Distributed blockchain identity ledgers that immutably bind an individual's decentralized identifier to its public key and interact with domain-specific service endpoint addresses can provide a common source of trust. A multi-domain blockchain identity network provides assured digital identities with near-real-time public key distribution, revocation, and authentication, and protection from identity spillage without using a centralized registry, centralized identity provider, or third-party certificate authorities.
In every day life, this means providing and authenticating our identity once on a decentralized ledger, and then using this verified identifier to interact with any system that needs to verify our identity. Using blockchain to do this means that we no longer spread out personally identifiable and sensitive information across the systems of hundreds of private and public institutions, trusting them to manage our information. Instead, we select which information we want to provide in our decentralized ledger and manage who receives which parts of it.
Digital identity in emerging economies
With blockchain technology, we can create an immutable public record of every transaction in the network. This allows us to store data securely and make sure that it cannot be altered or deleted by any individual. With this, users have greater control over their identity, and organizations can use this information without compromising the end users' privacy.
In countries with emerging economies where many citizens do not have paper-based IDs, blockchain offers a solution. In these countries, people often face difficulties when trying to access services like banking or government programs. The lack of ID documents makes it hard for individuals to prove their identity, making it more difficult for them to obtain basic necessities such as education, healthcare, employment, and financial services.
According to a study by McKinsey, "Digital ID has the potential to create economic value equivalent to 6 percent of GDP in emerging economies, assuming high levels of adoption. In emerging economies, much of the value could be captured even through basic digital ID with essential functionalities." Digital ID can also help unlock non-economic value, potentially furthering the goals of inclusion, rights protection and transparency. It can promote increased and more inclusive access to education, healthcare, and labor markets; can aid safe migration; and can contribute to greater levels of civic participation.
Digital IDs on 3air
3air's platform will offer a way for individuals to create a digital identity. This DID will enable them to transact online: from simple things such as paying for an internet subscription, to more advanced transactions that require enhanced verification, like applying for loans. Our goal is to create an environment that helps more and more people get online and create a sovereign identity with which they can become part of the global ecosystem of business, banking, education and health.