Will we finally see digital IDs take place? 

The English Commonwealth, which was established in 1649, is often cited as the earliest instance of nation-state creation in the world, yet in England there is no formal national ID unlike many
countries worldwide. However, in 1414, the English did pass the Safe Conducts Act and issued ‘safe conduct’ documents similar to what we now call a passport. Although we had to wait until after the French revolution when, in 1803, the French issued what could be described as a national ID, over 200 years later (as the below chart illustrates) there are still over one billion people in the world with no ID. Blockchain technology is now being used to help meet some of the challenges
around creating and storing IDs, and this comes at a time when many countries globally are weighing their options and considering the likely problems their digital ID solution could face. But there is no doubt that the world is becoming more digital and with it the billions of human activities and transactions taking place on a daily basis. The need for countries to have a digital ID would appear to be growing, let alone the challenges of ID in the metaverse, but the creation of a digital ID could mean that data would be stored at one central point and this would run the risk of making it bait for security breaches. And this is where blockchain technology helps to alleviate this
problem, including the challenges around identity fraud, because of the way the technology is designed.

Lack of ID - a global challenge 

Source: Magic Cardneo

Terms such as identity management, embedded encryption and decentralised identifiers are often branded about when people discuss digital IDs. In order to create a blockchain ID, firstly one is obliged to register for a decentralised identifier (DID) on a self-sovereign identity (SSI) platform. At the end of the registration, a public-private key pair is generated and stored on a blockchain. The DID is the core of a blockchain ID because it is anonymous for the subject and the private key makes it inaccessible to everyone else apart from the owner of the ID who could also have several DIDs for different aspects of their life. Essentially, blockchain ID can allow users to share whatever information they want when they want, and for as long as they want, rather than their full identity. For example, blockchain-powered ID could also help enable voting and social security payments for governments, access to bars, or even to events and concerts. Some countries in South America, such as Brazil, believe digital IDs could be used as travel documents and have commenced digital ID distribution with Vietnam, Saint Lucia, and Greece. Saint Lucia joins others in the Caribbean, such as Antigua and Barbuda, the Bahamas, Barbados, Belize Grenada, and St. Kitts all having national ID’s. In Asia, China is looking to create a digital version of its current national IDs and meanwhile, South Korea is preparing for blockchain-powered digital IDs to be accessible from citizens’ smartphones. Hwang Seogwon, an economist at Korea’s Science and Technology Policy Institute, describes “Digital IDs as being able to yield huge economic benefits in finance, healthcare, taxes, transportation, and other areas and may catch on quickly among the Korean population.” Canada also has its own plans for digital IDs (supposedly as an extension of regular IDs) to be rolled out soon.

The European Commission's blockchain strategy clearly shows Europe has a myriad of plans for future ways in which blockchain could be used and blockchain technology is certainly able to tackle some of the challenges around digital ID problems that the EU is currently actively trying to solve. Back in 2021, the EU planned to give every citizen of the EU a robust set of digital credentials recognisable anywhere in the zone, the suggestion being based on eiDAS (electronics identification, authentication, and trust services) 2014. Notably, however, one particular problem the EU is trying to solve with its eIDs is identity theft, a challenge blockchain technology is also able to help with. ID2020 is another ID initiative, this time being taken by different stakeholders such as the UN agencies, governments, NGOs, and enterprises to “provide legal identity for all, including birth registration” by 2030. ID2020 is based on the human right which stipulates that “everyone has the right to recognition everywhere as a person before the law.” This initiative believes digital identity will be:

• a gateway to economic social and political enablement
• an enabler of global development
• a reinforcement for fundamental and universal human rights.

The UN has also recognised that siloed data could lead to less control for individuals and it hopes to address that with ID2020. ID4D is another initiative where the UN has partnered with the World Bank for the same digital ID objectives and different countries have highlighted the benefits a digital ID would bring them, such as:

• increased privacy of individuals’ data
• enabling citizens to have greater control of their data
• reduction of data breaches
• increased trust and confidence in the ID
• consolidation of identity management across different devices and platforms

But many have sounded the alarm about digital IDs because they feel it increases state power and structure of control; this eradicates the benefit of trust it was supposed to bring. Digital IDs have seen pushbacks from different quarters of the world because they put identification systems at risk in the
fact that identification data, whether digital or paper, have typically been siloed. This makes them a target for an attack, especially now that tools and technologies for cyber-attacks and crimes are also getting more sophisticated and invasive. Irrespective of this, digital IDs would appear to offer individuals, governments, and administrators a powerful tool to protect data and a way to prove ID in an online situation. Recently IDs have been in the headlines in India which now has the world’s largest biometric ID database. In the UK, voters are going to be required to have photo ID before they can vote and Portugal’scitizens will be issued with a new biometric ID; this is the case for South Africa, too.

So, ultimately Blockchain technology is being proven as a robust solution for digital ID in offering
decentralization, privacy, and user empowerment. In the Middle East, a blockchain-powered ID solution is being proposed which would enable airline passenger data such as passport and health information of passengers to be given to immigration officials and so reduce the time to go through immigration controls. Whether stakeholders will go the extra mile to incorporate blockchains into their digital ID solution is the question on everyone’s mind. For some countries having a national ID is still controversial and seen as an invasion of privacy and there are concerns that having all of your citizens’ data held centrally in one place could attract hackers. Therefore, using blockchain technology to have national ID schemes’ data held in a decentralised manner and stored cryptographically at least for some could address some of these concerns.

This article first appeared in Digital Bytes (1st of February, 2023), a weekly newsletter by Jonny Fry of Team Blockchain.

Share this article using the buttons in the bottom right.
Receive notifications about new blog posts and subscribe via the yellow button below 👇