Our data and identity are at risk, but there is a solution: a decentralized wallet.
Decentralized technologies are the future of identity management. But why is this move to decentralized solutions happening, and why is it so important? It’s simple: A decentralized, ultra-secure identity wallet can serve the dual purpose of protecting your identity from disaster and giving you unprecedented control over your personal data.
We’ve been in the midst of a digital transition for over two decades, but most people don’t stop to think about what that means for them. For most of us, it’s been a small trickle of our information being deposited across the internet — a copy of our birth certificate here, our social security number there, the online deed to our house, etc. Just think about how many things you’ve done online. They all required some sort of identity verification, with various (and often dubious) levels of security.
We’re challenged, and we don’t even know it
That’s the challenge we’re currently facing, and most methods of securing our identities are band-aids applied after the fact. Improving password hygiene or adding a one-time passcode can only do so much. For example, governments can be hacked, and they often hold vast amounts of personal data. The same holds true for businesses; if thieves don’t get actual data, they get login credentials to access that data later.
The current modes aren’t just wildly insecure, they’re also not convenient. Without a digital identity wallet to manage all aspects of your identity, you’re left with constantly having to upload various bits and pieces and then control all of that information. Moreover, it’s almost impossible to get back personal information once it’s out, and most of us don’t have the time or expertise to do it — but there’s a better way.
The decentralized identity wallet
The solution lies in blockchain technology; you’ve likely heard of it in the context of Bitcoin and other digital currencies. It’s unalterable and decentralized, offering high reliability — meaning only you can access your data. The encryption is so powerful that it has cost people millions when they’ve forgotten passwords.
While that’s an expensive lesson in password management, biometric identity verification provides an identity verification method that’s more convenient and secure than traditional passwords or knowledge-based authentication (KBA). We rarely get to have our cake and eat it too, but digital identity wallets provide just that.
Decentralized wallets using blockchain technology are a distributed but secure way to store all of your personal information. So, even if a disaster brings down the servers in one part of the world, you’ll still be able to access your data because servers in other parts of the world have access, too. The result is a redundant way for you to manage your digital identity from anywhere, at any time. All you need is a phone and an internet connection.
How digital identity wallets will help YOU
All of this theorizing is well and good, but how will the regular person see benefits from the decentralized identity wallet revolution? It starts with a single way to allow information to flow to the other party in any online transaction. You won’t need to upload a copy of your ID to a specific company; instead, you’ll allow that company access to your digital ID through your identity wallet.
Since it’s secure, there’s little chance that a fraudster could impersonate you or use your credentials to create an online account. Identity verification will be quick and easy because of the high degree of confidence the identity wallet provides to all parties involved. You also have instant access to all of the documentation and data that makes you, you: You can instantly complete almost any transaction that requires proof of identity.
You’ll also have unprecedented control over your data. You can review the data that companies have access to through one app or platform and revoke their access as needed. Your data won’t be stored on some company or government server. Instead, it’s stored on distributed nodes that could be anywhere around the world. But this doesn’t decrease the security; it increases it because these nodes create an unalterable ledger of every piece of information entered into the blockchain. When data is centrally stored, it can be stolen or tampered with — when it’s decentralized, that becomes much more difficult.
Each of our identities is unique, and it’s arguably the one right every person on the planet shares. So, it makes sense to leverage the technology we have today to improve how we store our data. The internet is great, but it wasn’t created with security in mind. Digital identity wallets solve this problem. As a result, we can finally move past the physical document paradigm and enter an age of true digitalization.