Countries that operate a significant social welfare system depend rely on strong identity management systems, particularly if they also need to manage high rates of immigration and tourism. Such is the case with the United Kingdom, a nation where citizens who want to access public benefits must first ascertain their identity through various internet verification systems.

A recent report by a British research and consultancy firm reveals suggests that the UK could greatly benefit from a blockchain solution to run its identity management systems at the government level. Blockchain technology is normally associated with Bitcoin and other digital currencies; however, this software platform is flexible enough to handle just about any kind of transaction or contract. The advantage of using the blockchain for identity management is that British citizens will be able to manage their own information, which is something that they cannot do under the current Gov.UK Verify system.

The rationale presented in the aforementioned report mentions that UK government institutions are challenged by identity management systems because they intend to manage information on their own; by switching to the blockchain, the burden of identity management would fall upon citizens who access services and seek to conduct transactions with the government. In the case of the Gov.UK Verify system, not all agencies use it, and this is an issue that becomes inefficient across agencies.

With a blockchain system, British citizens would have to create a long code that they may have to remember mnemonically; this unique identifier may be tied to their National Health Service number, and they would be able to access and update their own information. Since the blockchain is a distributed ledger, people in the UK would also be able to choose who gets to see their information; for example, a woman who goes visits a private dental clinic may allow her dentist to access her NHS files.

Blockchain systems are mostly designed to be decentralized, which means that hackers would have considerable challenges trying to infiltrate or compromise the system. Throughout history, centralized systems such as the one being used by the NHS have proven to be very vulnerable.

The best argument in favor of the blockchain as an identity management tool is that citizens would be in control of their information, which is the way it should be; nonetheless, the British government would have to adjust to considerable changes should officials choose to implement the blockchain in their data networks.