The need to protect online credentials and digital privacy is becoming a more widespread concern, especially as consumers expect the convenience of online transactions and blockchain identity. That means financial institutions, retailers, government agencies, healthcare providers, and others must store sensitive data such as credit card numbers, social security numbers, bank account numbers, and other data that hackers find appealing. Cybercriminals routinely break into data repositories to steal personal information that they can sell online, despite the fact that security measures are in place.
There is a better way to protect personal data while still utilizing digital credentials: Consumers can use a digital identity card for account validation, credential verification, and other identity-based transactions without exposing personal data because personal information is separated from digital identification. Distributed ledger technology offers a new way to generate a secure digital personal identity code that you can keep on your phone.
Solving the password problem
The need to manage multiple online accounts, including multiple login credentials and passwords, is an ongoing challenge in today’s connected world. The average user now has over 100 passwords, up 25% from a year ago. As a result, the possibility of stealing personal information has increased by 25%. The more passwords we use, the greater the risk of account compromise from sniffers or intercepted passwords.
Consumers are also creating more online accounts than ever before, resulting in more personal data being scattered across the web in various databases, increasing the risk of losing control of your personal data or your blockchain identity.
Much of this risk can be mitigated by developing a new approach that focuses on you and your digital identity. Using a digital ID protected by distributed ledger technology to abstract your credentials adds an extra layer of security and gives you complete control over your credentials.
You can authenticate your identity without revealing personal information if you use a blockchain identity. You can create a secure means of authentication for any account you have with a business, government agency, school, retailer, or other organization. You’ll be given a secure digital identifier once you’ve established a social contract with that organization. This identifier does not contain any personal information and is impossible to copy or steal. The method is simple to implement, simple to use, and completely secure.
Creating a secure authentication system
In the cloud, your secure digital credentials are stored and protected. The organization that needs to verify your identity or credentials can do so using whatever credentials are required, such as your social security number or your driver’s license number. It generates a unique QR code that you can save on your smartphone once it has been validated.
Your blockchain identity, which functions similarly to blockchain security, is what makes the digital ID secure. The distributed ledger does not store any information, rather than relying on a single data repository to store personal credentials. Instead, it accepts validation from the issuing organization, which is in charge of verifying your personal information. You are then given a QR code that can be verified using an encrypted key to authenticate your blockchain identity.
The fact that the validation key is stored in multiple online locations is what makes the system so secure. Validating an identity or credentials necessitates the synchronization and matching of ID information across all key locations. There is no stored information to steal, and no single key can unlock the digital credentials. There are no more passwords to remember or share on top of that.
Digital IDs are already in use
This technology is already being used in a variety of applications. The government of New South Wales in Australia is issuing digital driving licenses using a distributed ledger. The NSW Transport Department is in charge of issuing the license, but instead of a paper or plastic card, it issues a QR code that shows you have a valid driver’s license. Your identity is still safe in the cloud if you lose your wallet or even your smartphone, and no one else can use the same digital ID.
These digital IDs are not only safe but can also be used for a variety of purposes. The same QR code that is on your driver’s license can also be used as a student ID, a hob ID, for healthcare, and even to validate COVID vaccinations. These digital credentials, like physical ID cards, can be temporary and expire, requiring re-validation in order to resume use.
Multiple credentials can be used with the same ID code. Participating agencies and organizations can form a secure ID consortium to use the same QR code for a driver’s license, school ID, library card, or any other application. It’s the best way to create a secure, extensible digital ID that gives you complete control over your personal information and your blockchain identity.
There’s no reason to put yourself at risk of identity theft by storing personal information online and using weak passwords. The best way to provide secure credentials whenever and wherever you need them is to keep your personal information separate from your blockchain identity.