Blockchain and Digital Identity

There are few things more central to a functioning society and economy than identity. Without a way to identify each other and our possessions we would hardly be able to build large nations or create global markets. Unfortunately, there are persistent – and increasingly serious – problems with the way digital identity works. For historical and other reasons, the digital identity experience today is fragmented, with few standards or interoperability, and it is insecure, as the almost daily reports of hacks and data breaches reminds us. For individuals, but also for businesses and governments, the status quo is becoming less and less tenable.

Many see the problem in the haphazard evolution and “centralised” nature of the current digital identity framework. Centralised here does not mean that there is one, central source for digital identities, but rather that digital identities are almost always provided by some third-party authority (often a private company) for a specific purpose of its own. The identity information is “centralised” within that entity.

Thanks to a combination of technological advances, including the increasing sophistication of smartphones, advances in cryptography and the advent of the blockchain, it is now possible to build new identity frameworks based on the concept of decentralised identities – potentially including an interesting subset of decentralised identity known as self-sovereign identity (SSI). Explaining what these concepts are, and how they might work in the European context, is the subject addressed by EU Blockchain in this paper.