The blockchain gets a lot of press for being the solution to many technological breakthroughs. There’s no question that decentralized ledgers can play a disruptive role in almost every industry. The identity management sector needs a path forward due to its current lagging infrastructure, but the road is fraught with peril.
The current system is antiquated. People suffer from constant data breaches and security is always an issue. Keeping so much information on centralized servers comes with a significant risk. Since those repositories hold critical financial data for millions of people, hackers are bound to devote a ton of resources to looting the data vaults. Identity management companies are like the “Fort Knox” of usable, identifiable information and are vulnerable to nearly non-stop attacks.
The Traditional System Is Vulnerable
Perhaps even more crucially legacy systems are not keeping up with the times, even in the areas of privacy, compliance, and security. They are out of touch with current laws and regulations and are likely to pose a massive threat to everyone who they track. Blockchain technology has the potential to solve the current issues because of its decentralized nature.
For one thing, encryption of data that are universally employed offers real benefits. SelfKey is an open source initiative that seeks to create waves in this vertical. Their plan involves everyone getting what they call a Self-Sovereign ID, which is a tokenized means of identification. People will have access to manage this key on their own. Hence they can assert their sovereignty over their identity management. Currently, all consumers are at the mercy of centralized bureaus and do not have access to any management features.
The SelfKey project has attracted heavyweights from the tech and finance industries. There are many hurdles to cross, but this is a credible open source initiative that could solve the existing problems of managing identities. People may be willing to change. In the past few years, the amount of damaging, high-profile data breaches has left many people shook. Relying on a few centralized providers of these services makes the entire population vulnerable.
The problem with all blockchain solutions is that they have low adoption, especially during their startup phases. If enough people begin using the software, though, the potential to gain a head of steam is undeniable. Improved security and control are two features that all people would love to have.