Blockchain And Identity Online | Advertik Media


Most things we do revolves around our identity. The increase in the number of digital-savvy and tech-savvy users has led to the digitalization of identities. However, the conventional way of identity management does not serve the purpose as they are fragmented and insecure. Digital Identity is often part of data breaching that the rightful owner hardly can’t stop. Unsecure identity indicates the need for a decentralized system that enables secure storage and management of digital identities, ensuring interoperability and tamper-proof infrastructure. In this article, we will take a closer look at blockchain and digital identity.

The traditional identity systems are vulnerable, and they become a potential spot for hackers to get access to confidential data, with single points of failure. Though many firms tried to focus more on identity protection and cybersecurity, however, they failed to deliver a compromising customer experience.

Also, as an individual, the burden you put on your shoulders to manage multiple passwords, IDs, documents, and passports, etc., are too pressurizing. You cannot safeguard them throughout a lifetime. The chances of data getting lost are so easy in traditional identity systems.

The current identity management system involves repetitive steps, especially when it comes to KYC verifications. The platforms are linked to one another, making you go through the KYC process several times when you take different services.

For instance, you have to do KYC for opening a bank account, and at the same time, you will have to do it again for taking a loan or going abroad. This is nothing but the creation of multiple portals for leakage of your data and, of course, a waste of time. The traditional identity management system with repetitive processes creates multiple access points to your data.

The companies use the breached data to serve their very own purpose. No company is letting you access their service without asking you for the data. And the most crucial part is, they never reveal how they use their data and manipulate you for their selfishness.

Blockchain And Decentralized Identity

Blockchain is in the market for quite a few years, changing the course of how processes happen. And the former is used for digital identity as well. Blockchain is compatible with every industry in the market, making blockchain and digital identity a great pair. Security and transparency around identity can get less complicated with blockchain, and they can be simple and easy to use. The integration of blockchain and digital identity tackles all current identity management systems, giving birth to a decentralized identity solution.

There seems to be a  need for a decentralized identity system, though the centralized ones seem practical as they are the only available way of storing identity until now. The centralized identity management systems are costly, and there are a lot of single points of failure. In centralized systems, the identities get managed by a single entity. Also, there is a high chance of tampering or loss of data with increased time for identification. And this is why the need for blockchain in digital identity is getting trendy as blockchain passes its characteristics to the respective systems. The blockchain becomes the potential solution for digital identity due to the following unique characteristics:

Digital Identity With Blockchain | Advertik Media


The blockchain uses distributed ledger technology for storing metadata needed for communications. Before getting appended to the blockchain, data will be validated through multiple nodes through a consensus mechanism. Each blockchain has its own consensus mechanism to carry out the validation like Proof of Work (PoW), Proof of Stake (PoS), and even Proof of Time (PoT). This makes the entire system decentralized, and thus people can use national identifiers across multiple platforms.


Data security is considered the most desirable characteristic of blockchain technology. The data is maintained in an immutable and encrypted manner. Notably, the data is stored in a decentralized fashion, unlike traditional identity systems where the data is stored in a single location, giving extra room for the hackers to access the data. The identities stored in a blockchain are secured through cryptography and are traceable and protected. Also, the blockchain-based decentralized identity management systems remove vulnerability associated with the protection of passwords.


The advantage of blockchain-based identity management systems over conventional ones is maintaining data across all nodes in the blockchain. The copy of data is available in every node in the network widely distributed globally, ensuring no single point of failure. The data is distributed in a peer-to-peer (P2P) fashion and is kept up to date by continuous reconciliation. There is no way the hackers could break the integrity of the identity stored on the blockchain.


Blockchain really simplifies the work involved in identity management for all the parties involved, including identity issuers, identity verifiers, and identity owners.

The identity issuers can automate the task of issuing identity, which drastically reduces the time involved. Also, there is no need for human intervention in the entire process, making it seamless and error-free.

Identity verifiers can onboard customers and verify data relentlessly and cost-effectively.

The general public can enjoy complete control over their identity as blockchain moves data away from a centralized system. Users are also able to create their own Self Sovereign Digital Identity for social media or transactions.


Your personal and sensitive information needs some privacy, which you will not get in a centralized identity management system as a third party maintains the data. Blockchain through pseudonymization ensures “Privacy by Design” along with encryption and digital signature. Pseudonymization is nothing but the encryption of data to ensure that they are not attributed to any specific subject without additional information. The encryption of data by blockchain is an effective means of pseudonymization, and also the private keys on the blockchain that are associated with off-chain data are pseudonymized. A digital signature is also fixed to the transaction carried out by the user, making it foolproof with no space for a scam. 

Digital Identity | Advertik Media

How Is Blockchain Useful In Digital Identity?

Blockchain being a ready-made framework makes the creation and maintenance of identities easy while offering security for it. The use of blockchain in digital identity management eliminates the need for third-party companies that misuse information. Here is how blockchain proves useful in this sector:

Creating Decentralized IDs

Blockchain addresses are unique, and users can use these addresses for making decentralized IDs. The major advantage is that these IDs can be created by the users themselves without depending on anyone. These IDs are cryptographically secured.

Registry for Decentralized IDs

Another use case of blockchain in the decentralized identity management system is to act as a registry for storing all IDs. These IDs are stored in an immutable ledger, and literally no one can access or steal confidential information that means a lot to you.

Credential Notarization

It is nothing but similar to putting seals to traditional identities. The blockchain puts a hash address on information that is added to the network. Thus, in addition to storing the identity, the blockchain puts an electronic seal and acts as a timestamp. For instance, if a university offers certificates to the graduates, the timestamp associated with it helps them know when it was issued and all such details. Also, companies can get rid of false certification issues when hiring new candidates.

Access and Consent Rights

With your identities stored in the blockchain, you can control who can access your info and who cannot. This allows you to share some of your credentials for a particular period of time instead of leaving them permanently on a platform.

A Glimpse Of The Future

The virtual and real-world has merged into a single entity, and the need for massive digital transformation is here. The world needs new technology to maintain digital identities. Thus, blockchain becomes the perfect solution for managing identities while offering security and control over individual identity rights.

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