Digital identity on blockchain

4 min readJan 26, 2021

More than 1.1 billion people, especially in Asia and Africa, lack official identity documents that would allow them access to public health, education and the financial system, according to the World Bank.

81% live in Africa, sub-Saharan Africa and South Asia, and 63% live in lower middle-income economies, while 28% live in low-income economies, confirming that lack of identification is a critical problem for the world’s poor.

To address the problem, the World Bank launched its ID4D project to expand digital ID programs in ways that can help fight poverty. Without it, people are more likely to be exploited, trafficked or confined to a life of servitude.

The World Bank’s approach breaks down a person’s identity into four dimensions:

1. Being: age, gender, address, fingerprint, features, iris or voice,

2. Know: what the user knows, a pin number, a security code, the answer to a secret question,

3. Have: an access card, a security token, a passport, driver’s license or credit card, and 4.

4. Do: this is the origin of the most sophisticated and most difficult to copy identity verification systems. A smartphone to verify that you, the person keying in the unlock code, are really its true owner.

In turn, the digital identification process has three components:

1. identification: linking a digital identity to a real-world person.

2. Authentication: proving who you say you are by means of a password for access.

3. authorization/affirmation: credentials for accessing certain resources.

All three components of digital identification require “source of truth” data to verify an individual’s identity, and digital verification of these sources confers great economic power.

In an increasingly digital world, our online identities are the key to accessing social, economic and democratic activities.

Much of this data has been accumulated by technology giants such as Google and Facebook, which have taken over the role previously held by the State.

The identities of billions of people on social networks are increasing every year, and are managed by companies, which in addition to recording information centrally, thus entailing a high risk of theft and manipulation, treat people’s data as a commodity to be traded, to the detriment of privacy and raising the potential risk of its holders.

By handing over identity verification to the big technology companies, we are increasing their surveillance capacity.

In this sense, Estonia is the first country that has fully digitized the identity of its citizens. The rest of the countries are in incipient processes, understanding the advantages of incorporating identity into a blockchain network and evaluating the risks.

Digital identity is the essential prerequisite that guarantees the operation of blockchain, smart contracts and the rest of the technologies that are being developed in the digital sphere.

According to a 2019 McKinsey report, the potential economic value of digital identity by 2030 will be the equivalent of six percent of GDP in emerging economies, and three percent in developed economies. This value will come from many sources, such as greater use of financial services, improved access to employment, higher agricultural productivity, higher tax revenues and less fraud.

It is in this context of need that blockchain technology is presented as a solution to digital identity, allowing information to be decentralized to prevent theft or manipulation, giving holders the ability to manage it and allowing it to be validated against third parties.

With selective digital identity, a holder can partially share encrypted data according to the need of the requester, preserving the rest under their privacy.

In Latin America, the DIDI Project is underway, from the Inter-American Development Bank, which aims to consolidate a self-sovereign digital identity through blockchain for the inhabitants.

Today with Cardano, through Atala PRISM, a decentralized identity solution is provided that allows people to own their personal data and interact with organizations in a fluid, private and secure way.

Atala PRISM records a case study, a pilot test of identity and credential verification for the Republic of Georgia, an agreement between the Ministry of Education and the universities of the Republic of Georgia.

Graduates need quick and easy access to their degrees when they enter the job market, Atala PRISM allows students to receive, store and submit their achievements directly from their smartphones. Instant verification of credentials makes background checks unnecessary, saving universities and employers valuable time and resources.

The launch of Atala PRISM in Georgia sets a new standard for digital identity and credential authentication. Businesses, governments and individuals can reap the benefits of this intelligent, decentralized solution.

Cardano thus positions itself as a leader in identity blockchain.

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