On-Chain Identity Application and Benefits
Blockchain application has evolved significantly from its initial narrow cryptocurrency focus to a backbone technology which supports various industries and, most recently of interest, DeFi projects. With its fast-growing development and range of applications, blockchain is integral to new and improved methods of identity management, and we’re going to unveil how blockchain facilitates this and what advantages it brings to the table.
Undoubtedly, there are the multitude of benefits that blockchain technology brings which have been mentioned in previous blogs. To summarize, these benefits are:
Application for Identity ManagementWith all these benefits, blockchain creates a trusted and tamper-proof environment on which to build an identity verification protocol. Blockchain allows individuals to create a decentralized identifier and a digital identity profile later which they can control. In short, a decentralized identifier is a pseudo-anonymous identifier for users, secured by a private key which is only known by the data owner. This means they can have complete control of the digital identity profile created. Each identifier represents a piece of information to be verified (name, location, age etc.). Once verifiers authenticate information for these identifiers, these credentials are cryptographically signed and owned and stored by the users themselves, instead of relying on one centralized organization/profile provider (e.g. Google, Facebook.). This data also isn’t tracked or associated with other platforms. Benefits of On-Chain Identity Combining blockchain technology identity management allows users to:
- Immutable. Data stored on blockchains can’t be tampered with, and will be permanently stored on-chain,
- Anonymity. Transactions and actions taken on blockchain can be done anonymously to provide top privacy for users,
- Decentralization. There is no single organized entity that has control over a blockchain and how data operates on-chain,
- Security. Public blockchains are supported by a network of machines which makes them almost impossible to hack.
On-chain identity also allows institutions/ DeFi projects to:
- Have complete control over their identities. Users get to choose what information is disclosed to 3rd parties,
- Security. Provides high security to personal identifier information and protects from hacking,
- Portability. Users can easily store their identities and share across multiple platforms.
All in all, when it comes to On-chain KYC™, thanks to recent developments - particularly Blockpass’ integration with Chainlink - Blockpass can now provide seamless and secure on-chain KYC data across multiple blockchain platforms, and this is just the start. Blockpass, the pioneer of On-chain KYC™, is a fast, fully comprehensive KYC & AML screening software-as-a-service for blockchains, Crypto, DeFi and other regulated industries. With Blockpass, you get an unmatched set of benefits for any compliance service that includes pay-as-you-go, no setup cost, no integration necessary, free testing, immediate launch and at the lowest cost. Blockpass’ KYC Connect™ platform enables businesses to select requirements for customer onboarding that can include ID authentication, face-matching, address checking, AML ongoing monitoring and/or screening of sanctions lists, politically exposed persons (PEP), and adverse media. Through Blockpass, end-users easily create a verified portable identity that they can control and re-use to onboard with any service instantly. By integrating with Chainlink Network – a decentralized oracle solution – in early January, Blockpass introduced the first On-chain KYC™ solution that will service many blockchains in the years to come.
- Streamline KYC processes and reduce errors. The automated authentication and verification minimizes errors from manual processes during the KYC procedure and provides more accurate results.
- Comply with increasing regulatory requirements to mitigate risks. There are many regulations to protect personal information (e.g. GDPR); giving control of users’ identities back to them can mitigate risks and simplify compliance.