Blockchain identity verification: secure and transparent

Blockchain identity verification is a revolutionary technology that is redefining the way we understand and verify identity in the digital world. Conventional, non-digital methods of identity verification often reach their limits - whether due to the time involved, lack of user-friendliness or potential security vulnerabilities. In contrast, blockchain offers a solution based on the principles of transparency, immutability and decentralisation.

DIGITAL IDENTITY VERIFICATION Why is digital identity verification important?

Most people spend a lot of time online every day. It is therefore not unusual that more and more transactions are being concluded online. Around two thirds of people in Germany use their digital identity for banking or insurance services, 53% for online shopping - and this is precisely where it becomes clear why secure and user-friendly methods of digital identity verification play a crucial role.

Unfortunately, the internet also provides a platform for fraudsters with dishonest intentions. Digital identity verification helps to prevent fraud and identity theft as much as possible. Ultimately, it is about verifying that the people who complete transactions online are actually who they say they are. This is particularly relevant, for example, when online services may only be offered with an age restriction. User-friendly methods of age verification are therefore essential.

BLOCKCHAIN What is blockchain?

For many, the term blockchain sounds like a new invention. In fact, the foundations of blockchain were developed back in 1991 by Stuart Haber and W. Scott Stornetta. However, the process became particularly well-known in 2008, when Bitcoin became a reality.

A blockchain is literally a chain of blocks. A single block contains a data record, for example for a transaction in which money is transferred from A to B. All information in this block is then copied. All the information in this block is then copied and distributed to the entire blockchain network, which then encrypts and confirms the transaction. If this block is now attached to existing blocks, the blockchain is created. This means that all transactions attached to the blockchain can be traced chronologically. In contrast to databases, which are controlled by a single central authority, the blockchain is operated decentrally by a network of computers known as nodes.

The basics of blockchain identity verification

Blockchain identity checks use proven principles of digital identity security and extend them with the special possibilities of the blockchain.

UNDERSTANDING BLOCKCHAIN Basic systems

Blockchain identity verification is based on the principles of distributed ledger technology. DLT is a technology in which data is stored and synchronised on many distributed computers or nodes simultaneously. The special thing about it is that there is no centralised control. This makes data storage more secure, as there is no single point of attack.

Blockchain is a well-known sub-category of DLT that can be used to verify transactions transparently and traceably. DLT therefore offers great potential for tamper-proof methods of data processing for transactions over the internet.

The basic principle is that in blockchain ID systems, digital identities should be securely stored in the blockchain. Distributed ledger technologies also offer the potential to give users control over their own data.

This is where the concept of SSI becomes relevant: SSI stands for "Self-Sovereign Identity" or in German "Selbstsouveräne Identität". It aims to give individuals full control over their own digital identities, similar to the control they have over physical IDs and identity documents. SSI systems often use DLT technologies such as blockchain to store identity data securely and decentrally instead of storing it centrally with an authority.

UNDERSTANDING BLOCKCHAIN How is blockchain identity verification used?

The hash value can be used to confirm the authenticity of documents - including documents for proof of identity, for example - with the blockchain identity check. A hash value is a cryptographic representation of a data set, be it a text, a document, an image or another type of digital information. The hash value is a fixed character string that is generated by a mathematical function. This function takes the input data, no matter how large or small it is, and transforms it into a unique string of characters with a fixed length.

If a document is now to be stored on a blockchain, it is given its own hash value. If it is a text, for example, the text itself is not saved, but only the cryptographic string that was assigned to the text. If even a small detail of the source text changes, it has a different hash value.

As part of the identity check, the hash value in the blockchain is compared with the hash value of the identity document to be checked. If the two values are identical, the document is the same, i.e. genuine.

For a hash value of the identity document to find its way into the blockchain, however, an initial identity check must first take place, on the basis of which the hash value can be generated. PXL Vision helps providers of identity and access management platforms that work with blockchain technologies, for example, to implement this initial identity check.

BENEFITS Advantages of blockchain identity verification

The use of blockchain makes it almost impossible to manipulate identity data. The data is encrypted in blocks and cryptographically secured in such a way that it is extremely difficult to gain unauthorized access to it.

Once data is in the blockchain, it can no longer be changed. This means that it cannot be subsequently manipulated.

Everyone in the blockchain network has a copy of all transactions in the chain. This makes the process very transparent.

Each transaction in the blockchain receives a timestamp that records the exact time of its creation. The timestamp serves as proof of the chronology and progress of the identity checks.

Conclusion

Blockchain identity verification opens up new avenues. Advances in blockchain technology have created an innovative way to manage and protect digital identities. At its core, this method offers a high level of reliability in securing personal information, which is invaluable in today's digitised world.

Particularly noteworthy is the immutability of data once stored in the blockchain. This guarantees that transactions made and identities verified are recorded securely and without falsification. The need for secure digital identity and access management (IAM) is constantly growing and blockchain-based identity management is a promising solution that meets the requirements of modern society.

This is where PXL Vision acts as a key component for Identity and Access Management platforms. With our identity verification solutions, identity documents can be captured and verified in the first instance.

In the midst of the ever-changing digital landscape, we at PXL Vision have made it our mission to provide digital solutions that are not only secure but also flexible to integrate to shape the future of digital identity verification. Are you interested in digital identity verification methods that can be configured for different use cases and requirements?

FAQ

What is a blockchain ID?

A blockchain ID is a digital identity that is managed and secured using blockchain technology. It allows individuals to securely verify and use their identity online without having to rely on central authorities or intermediaries. A blockchain ID consists of encrypted information that is stored in the blockchain and verifies the authenticity of a person's digital identity.

Who validates transactions on the blockchain?

Transactions on a blockchain are validated by a decentralized network of computers, known as nodes.

Is a blockchain secure?

Yes, blockchain technology is considered secure, particularly in terms of the integrity and immutability of the data stored in it. The security of a blockchain is based on cryptographic principles and the decentralization of the network.

How does blockchain identity verification work?