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Blockchain for Digital Identity

What Blockchain can do for Digital Identity?

Technological advancements in the digital space has revolutionized every aspect of our lives, from shopping to collaborating with colleagues to keeping in touch with friends to entertainment to managing our finances.


Since the dawn of the Internet, identity management has been a key concern, with billions of dollars being spent on usability, security and privacy.

The identity and access management market is expected to grow from $8.09 billion in 2016 to $14.82 billion by 2021, representing a 12.9% CAGR.


Despite this huge investment, managing digital identities continues to be plagued by three Cs – Cumbersome, Costly and Challenging.


With data driving the world today, digital identity is critical to most business and social transactions.

This governs the interaction of users in the digital world.

But traditional identity systems continue to be highly vulnerable, with single points of failure, attracting continuous attempts to gain access to the complete repository of high value data.

And, with companies prioritizing cybersecurity, identity protection and compliance management, while customer experience is significantly compromised.


As individuals, we shoulder the burden of managing multiple online IDs and passwords, while also handling a host of documents, including passports, driver’s licenses, Social Security cards and medical insurance cards.

The Blockchain Solution to Digital Identity Management

Blockchain has evolved significantly from the distributed ledger technology created to track bitcoin ownership.

This technology can replace traditional systems with a highly trusted mechanism of managing identities.

Blockchain can empower users to have greater control over their own identity.

Organizations can use the information only with customers’ consent and no central entity would be able to compromise a consumer’s identity.

What’s My Identity?

Blockchain has facilitated the so-called self-sovereign identity, which is inherently unalterable and more secure than traditional identity systems.

This has the potential to completely change the way we use identities to connect to different online services.

Individuals would use their self-sovereign ID to verify their identity, removing the need for passwords.


As with every lifechanging innovation, there’s been an extended period of evolution, with experts exchanging ideas and little consensus on what self-sovereign ID means!

It’s a concept that stems from the belief that an individual must have control over the administration of his identity.


The ID cannot be locked into one site and there needs to be interoperability of the ID across multiple platforms, with user consent.

Experts have been contemplating the summation of various identifying information like demographic and employment related data and even information about the individual revealed by other people.


In principle, self-sovereign identity would allow users to :

  • Control their identities

  • Access and update information (though third-party verification may be required with some claims)

  • Choose the information that they prefer to keep private

  • Transport the data (to another organization or even another jurisdiction if they relocate)

  • Delete the identity if that’s what is wanted

Such a system would need to ensure certain things :

  • Powerful algorithms to validate an identity and its claims

  • Independent of a particular platform or architecture

  • Identities to have a long shelf life (ideally forever)

  • Interoperability (to make it widely available)

  • Sharing of data only with the consent of the user

  • Organizations should be able to access only what is needed and not the complete information

  • Protection of user rights

More Power to the Individual

Backed by blockchain innovation, the solution gives individuals total privacy and control of their personal information, while making data shareable on a trusted network, and ensuring security of identity transactions.

Managing Multiple Identities

An individual may have one identity across multiple platforms or may want different identities supporting different ‘personas’ for the workplace, for friends, for family, etc.

Blockchain can support this flexibility and offer a key for each of these identities, giving the user the power to decide which persona to use in a particular situation.

Anonymous Authentication

The solution deploys anonymous authentication to ensure maximum security. If a public key is needed to access one’s digital identity, this key is prone to hacker attacks.

Anonymous authentication allows individuals to use unique attributes that identify them, eliminating the need for a public key.


NEC: Orchestrating a Brighter World

NEC is enabling digital identity management through blockchain.

This translates to huge cost savings for organizations.

For individuals, this would mean a significant improvement in security, speed of transaction and user experience.


Various applications of the solution in the real world:

  • Puts control of your personal data back into your hands rather than being in the hands of industry giants.

  • Addresses issues faced by refugees. They have to no country they belong to. They don’t have proper documentation. They cannot borrow money, open an account, buy a house or start a business. They remain as non-entities and cannot participate in society.

  • Removes the need to deal with bureaucratic processes for passport creation.

  • Enhances security and privacy of medical records and intellectual property, while facilitating compliance with regulations protecting patient data.

  • Simplifies KYC processes. Currently every bank and financial institution individually performs the KYC process, validates the information and documents and stores a digitized version. With digital identity being maintained on a shared ledger, banks can access relevant parts of the stored data (with customer consent) and perform due diligence. 

Related Information

What is Blockchain Technology?

Explain how this inovative technology was developed and how can be applied to various field.

NEC Activities on Blockchain

This chapter trace how NEC has developed blockchain focusing on the basic technology of Bitcoin.

Features of NEC Blockchain

NEC overcame the difficulties of traditional blockchain and developed new technology for enterprise use.