With information technology development, the problem of personal data protection becomes more urgent. It attracts particular attention in the modern business processes basing on the know-your-customer concept.
In the context of the blockchain and the distributed ledger technology, it is necessary to consider the following aspects of personal data protection:
- protection of the personal data of the information system users;
- protection of the data that can be considered personal and that is being stored in the records of ledgers;
- protection of data that can be considered personal and that is being stored beyond the ledger but to which there are links in the ledger;
- protection of the information on the operations made with the ledger records.
So, the blockchain tech has quite a good potential in the sphere of the personal identification: digital identity, passport, electronic residence, birth or marriage certificate, identity document, logins, passwords, etc. Creating digital identity on the basis of the blockchain, a person obtains more efficient instruments of personal data management. He or she can decide who will possess them and who will have access to them.
Combining the principles of the distributed ledger and personal identification, the digital ID can be used as some kind of ‘digital watermark’. Such watermark can be assigned to practically every online transaction affecting assets of different types. There are now a number of pioneers creating solutions on the basis of the blockchain to manage the digital identity and authenticity. All these solutions find the cross-sectoral application.
The providers can discover new sources of income providing partners with the system of digital identity and authenticity in the form of a service implemented in the blockchain. Communication service providers still don’t play a considerable role in the authentication processes. However, they possess a great volume of information about their clients. The blockchain here plays the role of storage of operations on the identification.
Moreover, communication service providers can expand the functions up to the service of verification, data management, and storage. For example, the connection provider will provide universities with the service of verification of the graduates’ certificates that are being stored in the digitalized form in the provider’s blockchain. In such a way, communication service providers can keep any other documents of clients such as insurance certificates, flight tickets, booking, and other information.
Tokenization is another segment of identity management using the blockchain tech.
There are many types of assets in the modern world. They are real estate, shares, gold, oil, loans, vehicles, etc. As most of them are difficult to transfer the trade of such assets is being made on the basis of documents presenting a certain asset. The digital blockchain system that will contain information on the assets can be a really good solution. Commodity exchanges largely transfer to the electronic transactions but there are difficulties connected with great costs and low level of trust. That is why it is high time for the tokenized assets.
People have to control their data. They have to obtain the right to decide what kind of information to share, when, how and in what volume. Transparency is the most important the blockchain tech can give to users that is why they should pay their particular attention to it, especially when we are speaking about identity management. Both individuals and businesses are interested in this.