Say goodbye to passwords and hello to secure, decentralized user identity management with blockchain. Companies often collect sensitive data about their users and store them with routine business data which is comparatively less sensitive. As a result, it creates new business risks with the increase of regulations related to user privacy such as GDPR (General Data Protection Regulation). Also, the focus of industry shifted towards corporate IT responsibility.

When it is about IoT Devices?

There are around 7 billion internet-connected devices around the globe. This number is expected to increase to 22 billion by 2025. In an industry which is new, most IoT technologies do not integrate appropriate identity and access management capabilities. Interconnected internet of things (IoT) devices and objects are required to identify sensors, monitors, and devices. Also, they need to manage access to both sensitive and non-sensitive data in a secure way.

Major IT vendors have started to offer IoT management systems to address these problems. For instance, it is not unusual for an organization to have thousands of IoT devices in comparison with hundreds of traditional servers and user devices. Standards across devices that don’t match is a common problem with such volume.

Learn more: Implementation of Blockchain in Cybersecurity

When discussing Individuals

Identity is a mandatory part of a functional society and economy as well. With an appropriate way to identify ourselves and our possessions enables us to create prospering societies and global markets. At its foundational level, identity is a group of claims about a person, place or thing.

For most of the people, this usually consists of first and last name, date of birth, nationality, and things like passport number. This information is issued by centralized organizations (governments) and are stored in centralized databases (central government servers).

Citizens with official identification by the government still lack complete ownership and control over their identities. They have a broken online identification experience. Also, they are not aware of losing the value of their data. Companies holding their data are subjected to hacks repeatedly, which forces a lifetime of fraud mitigation for the end-user.

Why do we need Blockchain for User Identity?

Blockchain identity management systems could be used to eliminate following identity issues:

Inaccessibility to data can create hurdles for citizens

According to an estimate, 1.1 billion people around the world have no proof of identity. And, 45% of these people without an identity belong to the poorest 20% on the planet. Complicated identification paperwork processes, expenses, lack of access, and the simple lack of knowledge around personal identity are primary hurdles that keep over a billion people outside of conventional identification systems.

Without having physical identities, one cannot get into school, apply for jobs, get a passport, or access many governmental services. Having an identity is important to having access to the currently existing financial system.

On the other hand, 60% of the 2.7 billion unbanked people already have their own mobile phones, which create circumstances to enable blockchain-based mobile identity solutions which better suit the needs of unsafe citizens.

Data Insecurity can be a great problem for the users

At present, our most valuable identification information is stored on centralized government databases. These databases are supported by legacy software which may have several points of failure. Large, centralized systems having the personally identifiable information (PII) of millions of user accounts are extremely appealing to hackers.

A recent study shows that personally identifiable information is the most targeted data for hackers, consisting 97% of all breaches in 2018. In spite of regulatory legislation and enterprise efforts to augment cyber security, 2.8 billion consumer data records were revealed at an estimated cost of more than $654 billion in 2018.

Fraudulent Identities can cause havoc to overall identity landscape

In addition, the user’s digital identity landscape experience is unusually fragmented. Users tend to use various identities associated with their usernames across different websites to misrepresent themselves. There is no systematized way to use the data generated by one platform on another one.

Moreover, the weak link between digital and offline identities makes it easy to create false identities. Fake identities provide favorable conditions for the phenomena of counterfeit interaction, which can help in carrying out fraud and lead to inflated numbers and lost revenue.


With the increase in highly performing smartphones, progress in cryptography and the arrival of blockchain technology, we have the tools to develop new identity management systems; digital identity frameworks based upon the concept of decentralized identifiers (DIDs). Also, we can include a new subset of decentralized identities known as self-sovereign identity (SSI).