Public blockchain based digital IDs could be a game changer

When it comes to a good use of blockchain technology, digital identities are near the top of the list. While the DeFi world is all about anonymous trading and (likely) shady practices, the RealFi (real world finance) world, as well as the Enterprise world, require companies knowing who they are transacting with and whether someone can be trusted. Buying a house in the UK for example requires a trip to a solicitor for them to sign off on proof of your identity.

Enter Cardano’s Layer 2 solution, Atala Prism. A Decentralized Digital ID solution built on top of the Cardano blockchain. There is a great explainer vid here for those that want to see it.

Having a central store of identity that can be used to access all sorts of services may initially sound like a perfect role for government. Except this then raises the question about big brother surveillance.

On the other hand having it centralized in a company like Facebook raises all sorts of questions about monopoly, selling of data, business motivations vs. societal benefits, as well as the risk of a large range of services becoming inaccessible should Facebook go down, as it did recently.

In a decentralized digital ID world, identities would be stored securely on the public blockchain but not controlled by any entities, allowing companies to verify ID and credentials, while allowing you to control who sees which pieces of information about yourself. Your educational establishment could register your credentials on chain the moment you graduate, rather than you having to carry around pieces of paper with you. Employers can then request access to your grades which you can choose to grant using a phone app.

Cardano’s ATALA Prism could become the backbone, a decentralized Identity layer that a range of business and governmental services utilize but which neither control. This could lead to more frictionless interactions between entities as demonstrated beautifully here

While a lot of the crypto world is focused on anonymous trading, while the spectre of tighter KYC regulation looms large over it, the more compelling revolution is the user of blockchain based identities in realFi, governments, and enterprises.

Published by ReddSpark

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