Benefits of Blockchain for Identity and Access Management – By Azgari Lipshy

Society’s push toward digitalization also leads to the digitization of personal identities. From health information to professional certificates, the requirement for identification information and credentials is expanding in number, diversity, and significance. Traditionally, third parties monitor and confirm identification information —government or commercial sector. However, declining levels of trust and innovative technologies are causing people to challenge these structures.

Paper-based forms of identity are becoming more unsuited for the digital age due to the growing volume of personal data, the prevalence of digital interactions, and the severity of security concerns. It is uncertain, though, how future technology will transform identity.

Identifying, authenticating, and authorizing users of services or systems is a major task for identity and access management (IAM) technology in business and government environments. Several operations come under this rubric, and “access” might mean anything from a user logging into a system to an employee setting hardware, a citizen utilizing a government service, or any other kind of user verification, certification, or confirmation. Examples of identity traits include job, nationality, service provider affiliation, government benefits eligibility, and demography. In addition to serving as digital representations, these tags can stand as proof of our identities.

Among the many new technologies that might serve as templates for IAM is distributed ledger technology (DLT), also known as the blockchain. DLT is best understood as a catch-all phrase for a family of related technologies that facilitate distributed designs for data protection and processing. Its primary feature allows the network to record and verify activities like purchases, logins, and chats, rather than relying on a third party. Blockchain technology — or blockchain-inspired solutions — might enhance IAM operations in various scenarios if implemented correctly. Among such scenarios are the following:

Elimination of Paper-Based Identity Management

Eliminating paper-based identification management is the primary advantage of blockchain for identity management. Blockchain identity management systems can assist when users misplace their original papers by acquiring duplicate ID proof. Users who forget or lose their original ID proof credentials can retrieve them using Blockchain Identity Management, but they must go through specific procedures.

Organizations can ensure that documents are irreversible and tamper-proof with blockchain identity management. With the guarantee of security and dependability, government authorities can preserve ID evidence of individuals on a blockchain. In addition, the permanence of the ID proof record is ensured by blockchain security.

Self-Sovereign Identity (SSI)

Despite the idea of complete “self-owned” and “returning control of all attributes to the end user” preceding blockchain and IAM by a significant amount of time, DLTs have inspired several creative concepts that allow for increased self-ownership of personal data. Consensus methods created expressly for attribute dependability are one example. Nonetheless, higher-risk corporate use cases like those in healthcare or financial services would always call for a third party to verify identity assertions.

Independently Verifiable credentials

As stated by the W3C, “Verifiable credentials represent statements made by an issuer in a tamper-evident and privacy-respecting manner.” As an integral part of the identity verification process, DLT affords the opportunity to “digitally stamp” a permanent claim. Similar to how artists may now digitally watermark their original material using blockchain-based Nonfungible Tokens (NFT), this same capacity can be used to authenticate credentials. However, businesses should not keep Personally Identifiable Information (PII) on the blockchain itself but rather keep the hash of the claim on the blockchain.

Decentralized Identifiers (DID)

DIDs are identifiers under the authority of the identity owner, without the involvement of centralized authorities or resources. These are a part of SSI’s personal data intention to be user-controlled and not re-assignable. This indicates that digital identifiers have public key documentation, authentication mechanisms, and verifiability through cryptography or the signature of an issuing authority.

Provenance

Blockchain can help determine the source and precision of identification attributes. An attribute is only as trustworthy as confidence in its source. A shared ledger might establish transparency in the timestamps of sources providing identification traits, much as it has increased transparency and efficiency in monitoring commodities across the supply chain. In particular, synchronous insight into the lifespan information of cryptographic keys or who has access to what might be beneficial for key lifecycle management. Furthermore, the academic community is also considering using blockchain provenance since it might help with the authentication and verification of credentials for recruiting.

Minimization of Data

To authenticate a user, traditional service providers require a lot of verifiable data. Different DLT features, such as zero-knowledge proofs, smart contracts, and selective disclosure, can be set up to reduce the amount of data or attributes needed for verification.

Compliance verification

As shared ledger network stakeholders with permission-based access, auditors may also be used for compliance verification, which is another use case made possible by shared audit trails. Compliance verification is also necessary for many business identification use cases, such as KYC in financial services. In this situation, the IAM-blockchain convergence might increase efficiency for both banks and individuals without doing away with the requirement for the central authority, which in this case would be a governmental body handling KYC. A bank might lower its expenses while “seeing” and attesting that other banks have performed KYC due diligence and confirmed the clients’ identities.

Conclusion

This blockchain above use cases outline the advantages of merging blockchain with IAM, but they ignore a crucial fact: identity is difficult to manage. Even though IAM connects many systems, domains, technologies, and service providers, encoding identity data into DLT is more than a technical task. It’s crucial to inquire about the data, including what has to be saved, who should attest to it, how it’s maintained, and who makes the decisions. These inquiries incorporate philosophical, financial, cultural, and legal factors. Although the technology is still developing, it can convert centralized but dispersed hubs that now serve as identity control points into a decentralized yet linked web of trust.

About the Author

Azgari Lipshy Azgari Lipshy is a yogi by sunrise, a SAAS account manager by day, and a live music fanatic by night. She writes about her experiences while traveling, cooking, yoga, and technology that she finds fascinating.