Although we are very much still in the early stages, blockchain technology is already beginning to show signs of its truly massive potential. Whether or not you buy into the volatility of cryptocurrency markets, there is still a ton to learn and investigate about the long term implications of the backend technology, which promises to revolutionize the way we organize, store, and authenticate, consumer and enterprise information.
Applications of blockchain hinge on the use of decentralized ledgers, used to track and monitor ownership of digital assets (blocks). Effectively, they create a way for untrusted parties to reach agreement (consensus) on a common digital history. The common digital history is immutable and verifiable, so none of the data can be easily faked and/or duplicated.
One of the more promising use cases for this technology is to fundamentally disrupt the way we manage and secure our personal identities. This is an especially lucrative problem for technologists and industry experts who are working to accelerate blockchain to reach global scale.
The problem is that, although the internet has largely become a far more secure and efficient place, the literal (and cumbersome) process of managing our identity has not changed whatsoever. We still rely on a number of legacy methodologies, like pen and paper, to support the organization of, some could argue, some of our most important personal information. While identity management systems vary by government and region, most all are lagging years behind modern standards of operational efficiency. Why?
Centralized systems of power, like we see in the form of large governments, have little to no incentive to improve the process. Not only do we see an extremely poor “user experience” for citizens who need to update/manage their identity, we also know that millions and millions of people, globally, do not have access to the most up to date version of their personal records. Inaccessibility and inefficiency have plagued and excluded citizens of the world from being in control of their personal lives.
And though this incompetence has cost the general public invaluable dollars and time, the real cost is in how governments currently protect our information – in costly, unsafe centralized identity systems. There are numerous vulnerability problems whenever you store data in a single location. Look to the examples of The Home Depot, JP Morgan, Ebay, and, recently Equifax, as standing examples. As a result, there are numerous risks, and high cyber-protection costs, that these organizations must deal with to keep the data safe. Even then, there are numerous reports of governments losing to cases of fraud and hacking.
For an identity management system, so important to holding together the glue of modern society, we are severely behind the curve when it comes to security, privacy, and ownership.
What has the next generation of innovators so excited is that we can solve for this laundry list of negative problems by implementing a blockchain to serve as our single system of record for managing, organizing, and securing our personal information.
For instance, SelfKey, among a few other players in the space, is quickly rolling out a blockchain based digital identity system that “allows individuals and companies to truly own, control and manage their digital identities.” They have cleverly designed a “self-sovereign” identity key that unlocks access to our most private and important information, replacing the inefficiency that exists as the current system relies on intermediary parties.
I reached out to Edmund Lowell, Selfkey’s Founder and CEO. He said that Selfkey has a different approach to personal data management and privacy. They are confident they will never lose consumer data, because they don’t actually store data.
But according to Lowell, it’s not just private individuals that they are after and the company has developed an entire marketplace for corporate entities.
Changing the way we store and access our personal information is just the start of what could quickly become an entire new means for authenticating and keeping records of ownership.
Imagine having all of the information about our real estate, financial, and healthcare information, in one unified place such that we can easily verify true identity to a past transaction. We can now maintain corroborated and validated proof that our records of ownership are legitimate.
This could entirely supplant many of the fraudulent infrastructures that we rely and depend on for critical processes of our society – like financial credit, taxes, and so much more. Although it is important to remember that big moving parts of our economy are often resistant to change, we can take the long view, and see that many of these advances are inevitably forward components of a digital future. Getting there faster? That is the challenge for this generation’s Mark Zuckerbergs and Elon Musks.