10 use cases for blockchain technology to improve identity and access management (IAM)

The digitization of society promotes the digitization of identity. From health information to professional certification, no matter in quantity, type or value, the demand for identity information and certificate certification is increasing from all walks of life. In the past, identity information was monitored and verified by third parties such as the government or the private sector. However, the shaky trust and the development of new technologies have brought into question the business organization in identity recognition and access management.

As the amount of personal data, the frequency of digital interactions, and security risks continue to increase, paper-based identification is becoming less and less suitable for the digital world. It is not yet clear how emerging technologies will reshape identity.

Identity and access management (IAM) technology plays an important role in identifying, verifying, and authorizing who accesses a service or system in organizational management events. There are many use cases in daily life. The access here can be for any content, from customer logging in to software to developers configuring hardware, from citizens’ use of government services to various forms of user verification, authentication, and certification.

Identity attributes are labels attached to identity: employment, nationality, relationship with service providers, access to government rights, and demographic data. These labels are not only digital labels, but also prove who we are.

Distributed ledger technology (DLT), commonly referred to as blockchain technology, is one of several emerging technologies that provide potential new models for IAM. Blockchain technology is a collection of distributed data security and computing and the technologies bundled in it. (Editor’s note: Blockchain technology and DLT technology are usually not confused. This is only the original author’s point of view.)

Its core is the decentralized processing of transactions, identity verification and interaction, without the need for a central authority to record and verify. This ability to record and obtain stored data in sequence is known as a fundamental breakthrough in data preservation, and its application range extends far beyond the field of Crypto.

10 use cases for blockchain technology to improve IAM

We briefly describe some initiatives that use blockchain technology or are inspired by blockchain technology to improve IAM. include:

1. Multi-party verification

Multi-party verification involves replacing an identity verification service company as a central agency with a set of entities that are owned by a joint venture or consortium and governed by a network. This is the broadest vision of applying blockchain technology to the IAM system to improve efficiency, although the complexity of coordination between parties makes this application currently limited in scale.

2. Verifiable credentials

According to the World Wide Web Consortium (W3C), “verifiable vouchers represent a statement made by the issuer in an open and privacy-respecting way.” They are an important part of identity verification, and blockchain technology provides a “digital watermark.” Just as blockchain-based NFT enables artists to digitally watermark their original media, similar functions can also be used to verify identity credentials. In other words, companies should not store personally identifiable information on the blockchain, but should store verifiable hash sequences.

3. Distribution attributes

In a public chain architecture or a hybrid architecture based on open source code, access is unrestricted, and it is possible for users to search and access data globally without the need for a central directory. This kind of transparency may threaten privacy, but as the protection of privacy is strengthened, the distribution attributes of easier access to data may improve financial inclusion at this stage and help those who cannot prove their identity to obtain concessions.

4. Accessible attributes

Through smart contracts based on code logic and blockchain algorithms, data can be encrypted and decrypted when needed. To avoid storing personally identifiable information (PII) or personal raw data on the blockchain, we only need to store the hash signature of the identity attribute on the ledger, and users can learn their identity attributes from their devices.

5. Attribute source

How do we know the source and accuracy of identity attributes? After all, an identity attribute is only reliable if we fully trust its origin. Just as shared ledgers improve the transparency and efficiency of traceable food throughout the supply chain, shared ledgers may provide transparency in the time stamp of the source of identity attributes.

The same functionality is useful for critical lifecycle management, especially for synchronizing visible lifecycle metadata. Academia is considering using it because it can assist in verifying and verifying the authenticity of qualifications and employment certificates.

6. Minimize data

What data does the service provider actually need to know in order to authenticate someone? We can configure various functions on the blockchain, such as smart contracts, zero-knowledge proof, selective disclosure, etc., to minimize the data or identity attributes required for verification, and the data and attributes that do not need to be disclosed.

7. Audit trail

In many enterprises, the creation of interaction logs is not only based on operational safety, but also on regulatory requirements. When recording audit information, such as registered users, user logins, user requests for permissions, or user deactivation, blockchain technology may not be necessary, but it is useful for synchronization between parties, maintaining log integrity, and reducing tampering or fraud. Possibility is very useful.

8. Compliance verification

Another use case that is the same as the shared audit trail is compliance verification, because the auditor can be a rights-based stakeholder in the shared ledger network. Many corporate identity use cases also require compliance verification, such as “Know Your Customer” (KYC) in financial services.

Blockchain technology will not eliminate IAM’s dependence on central institutions such as government agencies, but it can provide higher efficiency for individuals and banks. One bank can visit and verify, and other banks have conducted KYC due diligence and verified the identity of customers, all of which reduce the bank’s costs.

9. Self Sovereign Identity (SSI)

Although the concept of complete autonomy and transferring control of all attributes back to the end user predates blockchain and IAM, blockchain technology has inspired some innovative designs to achieve greater autonomy over personal data. Including a consensus algorithm specifically designed for the reliability of identity attributes. Despite the possibility of SSI, some high-risk use cases such as healthcare or financial services may still require external agencies to verify identity.

10. Decentralized Identity Authentication (DID)

DID is an identity authentication that is completely controlled by the identity owner, independent of the central agency or provider. DID is a component of SSI, designed for user control, and cannot be reassigned or changed. This means that they contain public key documents, authentication protocols, and verifiability via cryptographic signatures.

These use cases provide convenience in healthcare. The lack of communication between hospitals, insurance companies, nurses, clinics, and pharmacies hinders increased efficiency, cost savings, and users’ access to care. One of the core challenges of this problem is authentication. Enabling blockchain technology can achieve the following functions:

  • Improve the visibility of all stakeholders in the medical certification process through a single data source;
  • Track and certify the certificates and permits of practitioners in their professional life cycle;
  • Verify the authenticity of health records and synchronize access to permissions;
  • Support greater information privacy rights through private keys, data minimization, verifiable credentials, greater patient control, etc.;
  • Improve regulatory compliance through coded smart contracts and real-time visibility;
  • By reducing data silos and duplication, a large amount of cost, complexity, and time associated with verifying credentials are reduced.


The current state of blockchain and IAM

The above use cases describe the benefits of blockchain technology to IAM, but ignore an important reality: identities are complex and personal, and more and more have more biological characteristics, the digitization of these data It’s unprecedented.

Although IAM connects multiple fields, systems, technologies, and service providers, encoding identity information on the blockchain is not just a technical task. The question of data accessibility is very important: what should be stored, who provides guarantees for it, how to maintain it, and who determines accessibility. These issues combine many philosophical, economic, cultural, and legal considerations. Although the technology is still changing, it has the potential to shift the identity control point from a centralized but disconnected central hub to a decentralized but interconnected trust network.

The original report comes from Jessica Groopman, Kaleido Insights. Jessica is committed to researching technologies that affect organization management, such as blockchain, Internet of Things, and artificial intelligence. Served as research director and chief analyst of Harbor Research, and industry analyst of Altimeter Group. The Chinese version is compiled and compiled by the chain market team, and the English copyright belongs to the original author. For Chinese reprint, please contact the compiler.


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