World Economic Forum explores blockchain-based digital ID

The World Economic Forum (WEF) has opened discussions on the development of an international framework of digital IDs based on blockchain technology.

The talks were led by WEF’s Digital Identity Initiative at the forum’s annual workshop, which had the theme of “Improving living conditions with digital ID”, with a focus on leveraging distributed ledgers. Hedera President Brett McDowell participated in the discussion, noting that relying on blockchain provides a higher level of privacy than other systems.

With the use of blockchain, the requirement for an identity provider is eliminated as users store the metadata of their digital identities on public ledgers while storing personal information in their digital wallets. Personal information stored in digital wallets can be signed by authorized entities with “cryptographic signature” to confirm the authenticity of the information.

“This system allows the user to control when information is shared and with whom it is shared, while enabling verified personally identifiable information sharing to satisfy know-your-customer, anti-money laundering or anti-terrorist financing,” McDowell said.

McDowell argues that the rise of blockchain-based digital IDs will offer economies several benefits, with fraud prevention and financial inclusion at the top of the pack. According to McDowell, 850 million people do not have access to any official documentation, while a large number of the world’s population are plagued by privacy problems that can be solved with the help of digital ID.

Despite the benefits, McDowell said the development of digital ID faces the challenge of being a relatively new offering, and that the underlying technology is seeing rapid innovation given new market solutions. He revealed that the WEF would be focused on drawing “generalizable lessons from pilots” and using “them at scale to deliver a fundamental building block for solutions to global challenges.”

Digital IDs are attracting the interest of industry stakeholders

The Web3 founders have been tinkering with digital IDs recently, but so far their approach has been disjointed, lacking a unified approach. In the Philippines, Twala has launched its proprietary self-sovereign ID (SSI), designed to give users greater control over the use of their private data to prevent incidents of identity theft. With nearly thousands of investors falling victim to identity fraud, Twala’s offering was praised by DLT enthusiasts for eliminating middlemen in the handling of users’ data.

See: Blockchain for Public Data and Applications

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