Why the future of blockchain is self-sovereign identity – CSIR

In Africa, blockchain is leveling the playing field with international nations, and it is a game changer, according to Carel de Jager, head of the Distributed Ledger Technology Research Group at the Council for Scientific and Industrial Research (CSIR) in South Africa.

As popular emerging technologies go, very few can match the sustained popularity and media coverage that blockchain has. The distributed ledger technology emerged alongside Bitcoin in 2008 when the miasmic entity known as Satoshi Nakamoto outlined the first cryptocurrency in their now famous whitepaper.

De Jager is intensely passionate about blockchain. We know this because few people have their faces light up in such a visceral way when they talk about decentralized trust and digital ledgers.

In an interview with Hypertext, De Jager told us about the intervention CSIR is making in blockchain research and development for the benefit of South Africans. He said that while the technology is still somewhat immature, more and more practical applications are coming into use.

“We’re moving past the days where we said this technology will do this, or this technology will do that. Especially in finance, we’re seeing some real-world use of blockchain and some use cases maturing,” he told us.

De Jager outlines “two big themes” for distributed ledger technology in Africa, namely finance – everything between lending, borrowing, accounting and cross-border money transfers – and identity.

Self-sovereign identity is one of the blockchain use cases that De Jager highlights as a big issue for the future, and something CSIR is focusing on.

“Identity is fragile, it is often stolen and misused,” he said. De Jager gives the example of websites such as Facebook, where private information from users is required to activate accounts. Apart from social media, this also applies to any website or digital process that requires your private information, such as registering at university or filling out an online job application.

This information needs somewhere to go, usually in the databases that can be insecure, and furthermore, you are required to trust these companies with your private information.

In 2021, Facebook saw private data from 533 million people in 106 countries leaked on a hacking forum. At the time, Meta said the leaked information was old, from a previous leak in 2019, and that the data was “scraped from publicly available information on the website.”

In October, Meta shared that certain apps on Android stole the private information of users. By placing your private information on a blockchain this would not be possible, or so claims De Jager.

He explains, “Sovereign identity is this new idea of ​​using blockchain to create software protocols that won’t require this entry of personal information from you.”

“You remain the owner of your identity, there’s no need for a big company or any other company to harvest this identity information. You don’t have to trust them with it.”

Blockchain utilizes a digital chain of information that exists independently in a virtual space. The ledger is immutable, transparent and auditable and changes, and thus all information placed on the blockchain is secure and reliable, he explains.

“The idea behind the protocol is that you create your own identity, called identification. Your ID number is a form of identification. Your bachelor’s certificate is a credential. For example, when an employer asks you to give them your diploma, that diploma [virtually] live on a device you own on the blockchain. You keep it and not the university that gave it to you.”

With this device, you can show your credentials to your employer through the blockchain. Here they can check the certificate’s validity. The authenticity of the file. They can check if it was issued by the person you claim it is from.

“It basically changes the relationship of trust,” says De Jager. “Currently, there is a relationship of trust between the employer requesting the degree and the issuer, the university. If these two entities, if they lose trust in each other, the model breaks down.”

Distributed ledger technology takes this trust relationship and moves it to be between the employer and the blockchain, which is independent and immutable.

“The trust relationship is strengthened quite strongly and it reduces costs quite a bit,” he adds. In fact, as he explains, maintaining huge databases of information can be a costly and complicated endeavor.

“Take, for example, the national identity database run by the Department of Home Affairs. It is fairly well maintained in South Africa, but in the rest of Africa and in some Asian countries, these similar databases are poorly maintained, often corrupted and prone to frequent crashes, leaks and stolen identities.”

But, “if you have a blockchain system where you don’t trust that database, once you get an identity, it can’t be stolen. Why? Because you keep it on a device, and if that device is lost, there are certain mechanisms you can use to restore it.”

De Jager explains that this recovery process can still be very difficult, “but it is a problem that is being worked on.” Either way, you will never lose your identity or the important credentials on the ledger. It cannot be stolen from you either.

“You retain sovereign ownership of it,” so the name said.

De Jager says there are several countries around the world that have launched self-sovereign identity blockchain pilot programs. Including countries in Europe such as Switzerland, Estonia and the microstate of Malta. The United Arab Emirates also launched a pilot recently, he says.

In Africa, De Jager says that CSIR is the only company that really spends time developing the technology. “We are working on SSI protocols and will roll out a proof of concept next year.”

De Jager says CSIR currently has no specific end-users in mind, but is looking for public sector partners to service its mandates, as well as private insurers.

“For an insurance company, self-overwhelming identity can be quite valuable. Insurance companies are inundated with impersonation fraud.”

De Jager gives an example: “For example, you are insured with insurance company A and you crash your car. Tomorrow you call Insurance B to get a quote and they will ask you if you have been in an accident in the last five years.”

“And you can say yes or no, and there’s no way for them to verify that because the data is with a competitor insurance company. It’s a big problem for insurance companies that they have to trust your honesty and trust you.”

He says self-sovereign identity solves the honesty and trust problem, as the insurance company simply has to reach into the blockchain to draw your information. While this may not be the best for the man in the street, we expect insurance companies to pay big bucks to find authentic and verifiable information.

“CSIR has been in discussion with insurance companies to cooperate to some extent and adopt a protocol like this because it will dramatically reduce the cost of verification of a potential customer and the risk assessment that comes with insurance products,” he adds.

De Jager says South Africa is right on the cusp of blockchain adoption and how companies investing now in education and development towards the technology will be able to survive in the future, especially in finance.

Similar to what happened with Kodak and the invention of digital cameras.

“I think we’re right at that point for distributed ledger technology, especially for finance and law. It is huge. I see it living in many boardrooms. Some managers ignore the technology and think it’s a fad, he says.

“But I see others, like some of the big banks, who are serious about adopting it and working extremely hard behind the scenes to change their business models to take this into account. We see both sides of the coin playing out in front of us .”

If blockchain adoption will be a factor in the continued success of the companies in these industries, De Jager says simply, “there is no doubt about it.”

[Image – CC 0 Pixabay]