Blockchain for Identity Management: It’s Years Away
Technologists are wrangling with an identity puzzle: Is it possible to create a single digital identity that can be seamlessly and securely used at a bank, a hospital or consumer websites?
It’s the holy grail of identity. The way identity information is collected and stored today is not only inefficient but risky: Hackers have had astounding success target centralized stores of personal data, as Equifax’s breach showed (see Equifax: Breach Exposed Data of 143 Million US Consumers).
“It’s unreal how careless we are with this stuff [data] that’s worth more than crude oil,” says Steve Wilson, vice president and principal analyst at Constellation Research in Sydney.
Many see the future of identity in the use of blockchain technology, the distributed computing network and ledger that verifies the transfer of a bitcoin from one computer to another.
Blockchain is the technology industry’s latest term du jour lately. That’s due to the meteoritic rise in the price of bitcoin, which has elevated a once-obscure distributed computing technology to a market mover.
When Kodak announced earlier this month a blockchain-centered digital rights platform and virtual coin, it’s stock price jumped three-fold. The Long Island Ice Tea company, whose drink sales have flagged, has renamed itself Long Blockchain, with plans to mine cryptocurrency. Its shares also dramatically jumped in price.
But blockchain has appealing traits for identity: Rather than lodging a virtual currency transfer, it’s possible to embed identity information in the ledger. The broad vision is a blockchain could be a tamper-proof reference point to verify personal data without having to expose the actual data to a service provider.
Consumers would be in control of their identity information, a concept referred to as self-sovereign identity. That reduces the chance that a data breach would spill their details all over the internet.
But many analysts contend that it will be years – if not decades – before blockchain-like technologies may be used for identity at scale.
“When I talk to people who really understand what blockchain-based technology is about, they will quite openly say we’re talking about 10- to 20-year time frames here,” says Martha Bennett, a principal analyst with Forrester who has been studying the area for three years.
The blockchain behind bitcoin is aimed at solving one problem: ensuring that a bitcoin isn’t spent twice, or the “double spend” problem.
Bitcoin is based on public key cryptography. A bitcoin is essentially just a 32-character secret private key that is stored in a wallet, which is represented by a public key.
