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Media

Blockchain and Identity Verification

Matthew Warner | November 2020

When it was first conceived and as it rose in public awareness, blockchain was hailed as a revolutionary new development that changed the status quo of the established financial industry and its control of the storing and transferring of wealth. The initial followers and proponents of blockchain often touted its anarchistic potential and ability to ‘self-govern’; however, this very ability has led to blockchain technology clashing with governments and regulators on numerous occasions, and the prevalence of scams, particularly before people understood the pseudo-anonymous nature of blockchain, has shown clearly why identity verification is not a bad thing, but a useful one if conducted appropriately.

Fairly early on, the idea of permissioned vs. permissionless blockchains became a hot topic of debate. Early adopters were, for the most part, strongly against any form of identification being applied to blockchain solutions and infringing their perceived privacy. This was despite the fact that the blockchain addresses that were used as their pseudo-anonymous representation in the blockchain world would later prove key to law enforcement agencies who used the transparent and immutable nature of the blockchain to track criminals once they had identified a number of real people and places behind these pseudo-anonymous addresses. Regardless, both permissioned blockchains (where users are required to undergo some form of identity verification as a security measure before being able to use the system) and permissionless blockchains (where there is no requirement to link a real-world ID to a blockchain ID) have found uses and followers. 

 

Beyond this, there has also been a drive to provide identity services for blockchain solutions in a huge variety of instances as developers and users begin to realise that, not only is it required from a regulatory standpoint, but there can be a whole host of possible use cases opened up when those in a system can prove their identity. This could be by enabling an interface with aspects of the real world which require an identity; enabling the possibility of using blockchain solutions in regulated industries such as finance and gaming; or facilitating entirely new developments through access to a global, decentralised audience with identity verification such as setting up virtual communities. 

 

It is not just individuals that can benefit from identity verification. Businesses, objects and devices can also enjoy expanded benefits from having an identity interface when used with blockchain technology. Being able to tie a real-world subject to a pseudo-anonymous blockchain address is key for blockchain opportunities to be realised in areas such as trading art, the buying or selling of property, conducting business with other companies, admitting sensors to a network or any other number of potential use cases. 

 

The benefits of permissioned blockchains or other solutions which incorporate an identity protocol are vital, not just to enable blockchain’s benefits to be realised to their fullest extent, but also to ensure that people can trust blockchain solutions. It is one thing to be told that the maths and technology behind blockchain prevent all manner of fraud, but it is another to place your trust in it. Additionally, with real-life identities tied to blockchain ones, potential scam artists can be dissuaded from even attempting to con users and cause difficulties to the blockchain community in the first place. 

 

Whilst blockchain is not the haven for criminals and bad actors that many have been told it is (even early on criminal users were traced and arrested thanks to the transparency and immutability of the bitcoin blockchain), the lack of identity has definitely hurt the perception and acceptance of blockchain technology. Many have been caught out by misplacing their trust or judgement or simply through human error, and a provable identity that could be tied to blockchain addresses would be a huge step towards preventing this. Similarly, people are far more likely to trust and interact with something where they can identify the person or business they are interacting with. Beyond this, blockchain cannot reach its full potential in the range of industries it can revolutionise without identity; voting, trading, provenance, travel, hospitality, gaming, and blockchains or solutions without an identity solution will be unable to provide these kinds of services. 

 

Blockpass has been specifically designed to provide identity verification services and has been doing so since April 2018. Not only does Blockpass provide self-sovereign identities for individuals, but it also provides a fast, secure, cost-efficient and simple way for companies that are required by regulations to utilise identification services to onboard new customers. Further, Blockpass is already being used by a number of companies – which can be found on the Blockpass Marketplace – and has even been integrated with an entire blockchain – the Waves blockchain – provide an identity verification layer, acting as an identity portal for those that wish to access the Waves blockchain. 

 

In recent news, Blockpass may have been behind the first ever DeFi transaction involving a verified identity on the blockchain as one user contacted Blockpass’ CEO Adam Vaziri to inform him that he had used his Blockpass identity to complete a DeFi transaction.

 

As people begin to realise that blockchain-compatible identity verification is essential to take advantage of all blockchain has to offer and gain the trust of users and regulators alike, we will see an influx of requests for verification. Given the scale that blockchain works on, the fast, secure and efficient solution Blockpass provides is only going to become more valuable and in demand. 

The Blockpass platform is fully automated and hosted in the cloud, with no integration or setup fee. Businesses can sign up to the KYC Connect console in a matter of minutes, test out the service, and start conducting identity documents verification, KYC and AML checks. Sign up for FREE at console.blockpass.org.