Blockchain Identity I: The Global Perspective
Much is said about how the blockchain has the potential to revolutionize various aspects of our lives, from our relationship with money and means of payment to the very structure of the state and politics. Among them, one is of particular importance to me: the question of identity.
Before we talk about how the blockchain might be useful in this scenario, we need to better define what we mean by “the question of identity”. I see this problem in at least three levels: global, institutional and individual, each of which brings a different key challenge. In this post, I will talk about the first and most basic of them, the global level. Let’s go?
First level: the global problem of identity
Currently, almost 1 billion people lack a formal document to prove their identity – that is, one in seven people on the planet does not officially “exist”. As much as this may seem like a problem very far from our reality, it isn’t. According to the World Bank, 93% of Brazilians have an identity document – which means that around 7% of our population is excluded. Although the situation is not as bad as in Nigeria, for example, where only 28% of people have official documents, 7% is a large number when considering the size of Brazil.
This is important because, since they are “invisible” in the eyes of the state, these people don’t have access to the most basic services, such as health and education, and become extremely vulnerable to crimes such as human trafficking, sexual exploitation, and forced labor. It is impossible to speak of social and economic development as long as millions of people have not guaranteed their fundamental rights.
Identity is such a crucial key to access that it is even one of the goals of the UN Sustainable Development Goals. In ODS 16, about peace, justice, and effective institutions, the States pledged to achieve, by 2030, identity for all.
Creating a digital identity with blockchain
One of the most promising ways to solve this problem is the creation of digital identities, which already exist in several countries. In Estonia, for example, citizens can access various digital services through their e-ID, which facilitates the authentication, storage, and sharing of data between individuals and almost a thousand public and private institutions. Another famous case is that of India, whose 1.2-billion-person registry even includes biometric information and distribution of financial benefits.
However, in order for it to be really effective, a digital identity must be created according to a set of good practices, with characteristics such as:
- the possibility to be verified remotely by digital means (ideally at low cost);
- having a high degree of certainty that it presents correct data;
- being unique, with each individual having only one identity and all registered bases pointing to the same holder;
- being established with the consent of the holder and giving them control over how their data will be used.
The good news is that blockchain technology can be an ally that meets all of these requirements. Not only can a blockchain identity be verified remotely, but this can be done by a decentralized network of validators, ensuring even more accuracy to the process. Although the blockchain alone is not able to ensure that the information inputted is correct from the very beginning (after all, someone may, inadvertently or maliciously, insert wrong information into the system), a decentralized network is more likely to cross data and if pick up inconsistencies.
Additionally, it also meets the requirement that each person must have only one identity through the structure of wallets, which also gives the user control over their data – themes that I will explain in more detail in the next post.
Access to formal identity documents is essential for citizenship and for ensuring the fulfillment of rights, and blockchain is increasingly being seen as a technology that can help with that. For this reason, several initiatives using this new database are already underway.
The UN is running since 2017 two pilot projects to provide an identity to vulnerable people. One of them, the Building Blocks of the World Food Program, distributes vouchers so that Syrian refugees can buy food and other products in the Azraq camp in Jordan. According to the director of the program, a savings of more than 98% was made in the administrative part when the various intermediaries of the process were eliminated and humanitarian aid was distributed directly to the people through their digital identity.
Another interesting program aims to register children under five years of age who live in places of risk, such as Moldova, an eastern European country. The initiative aims to reduce child trafficking rates in the region.
As you can see, the challenge is substantial, but it must be tackled if we wish to build better societies. Are you up for it? And how about some blockchain to go with that?