Introduction
At Pedals Up, we innovate and develop software with a belief in innovating a lot through blockchain technology to solve real-world problems. One such area that surely needs disruption is also that of managing identities, an extremely critical process but very flawed today in our digital age. We explain how blockchain solutions can be used in building trust and essentially revolutionizing how we manage our identities.
What is identity management?
IDM is a form of short-term identity management that comprises those technologies and processes that help in managing the access of its users to digital resources. Some of the tasks taken are adding and updating user records, authenticating users, user verification, and other associated tasks.
Why trust in identity management?
Trust is the base of safe online interactions. In the absence of an assured method to verify the identity of a user, corporations are vulnerable to fraud and leakage of confidential information. Similarly, users also require trust that their private details are stored securely and used properly.
Challenges of traditional IDM systems
Traditional IDM systems have heretofore relied on central databases. This leads to the following potential vulnerabilities :
- Single Points of Failure: The central server can be compromised, and thus, users’ data will be exposed.
- Data Silos: Users are divorced with multiple identities across platforms and therefore making it cumbersome to transfer data.
- Lack of User Control: The users have no control over their data. This raises major issues about privacy.
How blockchain can be used to improve identity management
Blockchain, a technology associated with cryptocurrencies, offers one such solution:
- Decentralized: The data is spread across a computer network; therefore, it has no single point of failure.
- Immutable: Once the data is written to the blockchain, it can never be modified, thereby providing permanent as well as verifiable proof.
- Transparent: All parties can access the entire history of the identity data, which establishes and enhances trust along with auditability.
- Secure: Data stored on the blockchain is secured by applying cryptography
Benefits of using blockchain-based IDM
Blockchain-based IDM offers several persuasive advantages
- More Trust: Decentralization and immutability create a more trustworthy system for identity verification.
- Fewer Frauds: Tampering with identity data becomes almost impossible, reducing fraud-based activities to a great extent.
- Better Data Privacies: The users have their keys, and they are given only the access that is authorized.
- Optimization: Streamlined verification of data reduces complexities in the transaction and onboarding process.
Challenges in Blockchain IDM
Blockchain IDM is not free from barriers after all these promises:
- Scalability: Currently, the existing blockchain networks have not been scalable enough for a large user base.
- Regulation: The law regarding ownership and control of data at a decentralized level is still in its evolutionary stage.
- User Adoption: Large-scale user adoption of newer technologies continues to be a challenge.
Conclusion
To give the facts with challenges, blockchain-based identity management solutions have significant potential. Building trust and security with complete user control over data fosters a much safer and more user-centric digital environment.
The future of IDM would thus be a hybrid combination of the best features in more traditional systems with some of the decentralized aspects of blockchain. The scale improves, as do regulations, blockchain is going to be at the center of it, to aid in the development of trust and give users abilities to have control over their digital identities.
Pedals Up is at the forefront of innovation in creating new blockchain solutions. If you’re ready to learn how blockchain can enhance your identity management, don’t hesitate to contact our team today.
