Blockchain Use Case for Digital Identity

“This digital world is what you make of it in the end.”—Ciara

Not a day goes by when someone doesn’t recommend an app to me. Friends tell me of the many apps they use to buy online, or the deals they made when buying from Amazon, using Apple Pay or Amazon Pay. And in so doing they are leaving a digital footprint whenever they make a transaction on the internet.

Shaan Ray, writes in Towards Data Science that a “person’s data is often stored in various different databases, and generated at different times.” While a person’s data may change over time, and appear in different databases—the result is that ‘digital clones’ of an individual can exist across different databases.

As a result of the many apps and digital identities, “people can’t update all their credentials and digital identities simultaneously,” says Ray, which has the potential to undermine security and convenience. Moreover, Ray continues, credit reporting agencies such as Equifax, tell us that it is clear that bad actors only need to “break into just one major database to gain every user’s information.”

Image Source: One tactic is programming bad bots to act as humans to try and gain access to websites across the internet.

The Case for Blockchain Digital Identity Solutions

The primary issue with how people are currently using apps and online platforms is the protection of their digital identity. While the user owns their data, once they pass personal information to online apps, the platform now owns that data. “Ownership of data is largely in the hands of the countless applications and services that we grant consent to,” writes Bisade Asolo, in Mycryptopedia.

Data is held with centralized entities vulnerable to breech and identify theft. Digital identity is composed of the collection of personal and corporate information stored in the centralized databases. This is problematic because centralized entities are increasingly open to data breaches and identity theft.

Blockchain technology could potentially solve the problem of compromised digital identity, by giving control back to the user. Instead of giving overly broad consent to various platforms and service providers –to obtain one’s digital identity—users can have their own encrypted digital hub to store their digital identity. They will be able to control who has access to that hub, and revoke whenever needed. Blockchain, in the digital identity use case, promises to place the individual back in control on how their digital data is utilized.

There are three areas of blockchain application offers security and trust for users who desire to continue to use their online platforms. (

Blockchain Creates Self-sovereign ID

While you own your personal data—you don’t necessarily own your identity. It is controlled in a central location—which may be vulnerable to hackers and attacks anytime. Blockchain offers the ability where you’re the only one in control of your identity. Through blockchain technology and the nature of distributed ledger your digital identity and data is not accessible to anyone without your consent.

Blockchain Reduces Identity Theft

Decentralized blockchains do not have a single point of failure. Hackers cannot hack into the system and access any of your data. Blockchain protects one’s data—first, by verifying the legitimacy of one’s data. Once verified, a cryptographic hash of the data is captured. It is then transferred to the public blockchain and at the same time erased from servers. Your personal data is protected—as it was never stored in the platform database. It remains only on your device.

Know Your Customer!

As it relates to banking, protecting one’s digital identity is vital. KYC, know your customer is a due diligence process banks use to vet a customer’s primary documents. This due diligence has to be initiated for every financial institution the customer uses. This redundancy can be time consuming and frustrating to the customer.

Blockchain technology can make it possible for banks and financial companies to access customers’ data—without having to initiate the due diligence process each time. Blockchain can create a digital identity for customers. With this digital identity, financial entities can monitor customer transactions and have access to accurate and relevant customer data.

With this level of security afforded by blockchain technology, when financial companies identify fraudulent transactions—they will then be able to notify other financial institutions, and prevent more fraudulent activities.

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Customers are vulnerable when it comes to using online digital information.  They cannot always be aware of nefarious actors who are persistently looking for way to breech online databases and steal identities. Indeed, identity theft cost American consumers over $16 billion, reported CNBC.

The demand for tighter security is paramount if the consumer is going to be protected, and blockchain use case applications to protect digital identity is not only timely, but it is imperative.


Asolo, Bisade, “21 Promising Blockchain Use Cases”, Mycryptopedia, June 2019.

Grant, Kelli B., “Identity theft, fraud cost consumers more than $16 billion”, CNBC, February 2017.  , “How Blockchain will Disrupt Digital Identity Blockchain Use Case Series (5 part series — Part 4), Medium, July 2019.

Ray, Shaan, “Blockchains and Digital Identity”, Towards Data Science, March 2018.


Eric W. is a self-educated ghost writer who for the past seven years has been involved in Blockchain, Cryptocurrency, and Digital advertising sectors as Project Director, Miner, and NRA (Network Resource Application).

Contact Eric


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