Rhode Island Eyes Blockchain-Based Identity Management Project

Rhode Island’s commerce secretary wants to take a streamlined approach to managing citizens and corporate identity and hopes a centralized data lake and distributed ledger technology can pave the way.

Secretary Elizabeth Tanner told GovTech that she hopes to move away from current practice which sees constituents separately enter and update their personal and business details at each agency they need to interact with. She hopes instead to allow voters to enter their details in one place, and later use digital wallet apps to access their information.

Tanner envisions a centralized data lake and distributed ledger to underpin the approach. The ideas are that a distributed ledger would store the data securely and enable a digital identity wallet, while the centralized data lake would save agencies from keeping their own separate records of a person’s or business’s identification details.

The state tested the distributed ledger component in a pilot earlier this year, where the technology was used to handle certified public accountant (CPA) credentials. Now Rhode Island looks to expand the idea even further, starting with bringing a distributed ledger and a centralized data lake to streamline the business registration process. It will soon issue a request for proposals.

THE PILOT

Rhode Island examined the feasibility of distributed ledger-backed identity management in a pilot project that ended in June. In this lawsuit, the state used a distributed ledger network to immutably store records of who had obtained CPA licenses. The professionals could then access their certifications on their phones using a digital wallet app. The app would run a check against the distributed ledger network to verify that a block containing the CPA’s certification existed. This approach allows CPAs to quickly display their certification statuses without also having to display other identifying details.

The project, in part, aimed to make it easier for CPAs working across state lines to prove their professional standing when handling matters such as filing tax returns in other states, Tanner said.

“The pilot was focused on just proving it could work,” Tanner said. “It proved that we could retrieve a digital ID through the public system.”

Tanner’s department now wants to build on that idea and see if distributed ledger technology and a centralized data lake can smooth out business registration processes. The aim is to streamline how business owners submit information during business registration, as well as allow business owners to use a digital wallet to access their license information.

“We want to expand that to be able to create a business identity tied to your personal identity and be able to perform the function of organizing your business,” Tanner said.

Rhode Island will launch a request for proposals for that project in the “coming weeks” and is open to suggestions on how to improve or change the project from what’s envisioned, Tanner said. The State’s General Assembly will look at the results of this project when they consider whether to finance such services in the coming years.

THE DATA LAKE SIMPLIFIED

In many states, people registering a business must provide details to the Secretary of State’s office, the Department of Revenue and the Department of Labor and Training. But Tanner hopes to streamline this by launching a single government website where individuals can enter basic identification details, such as name, address and company name. These details will flow into a central data lake that all relevant government departments can see.

Under this plan, constituents will also use the site to submit additional, more sensitive details, which will be transferred to specific departments rather than the data lake. For example, the Department of Labor and Training needs a company’s employees, while the Secretary of State needs to know its registered agent and the Tax Department needs the business owner’s social security number. These agencies will separately store and secure this information.

The new processes could reduce steps for voters, as well as reduce confusion for the authorities. When each agency has its own records on constituents, government employees can spend a lot of time determining whether records with similar names refer to two different individuals or entities, or to the same person using a nickname or abbreviation.

“If my formal name of my restaurant is ABC Restaurant, sometimes I’m called ABC’s, sometimes I’m called ABC Restaurant,” Tanner said. “So being able to have one method of identification for a name and a business is a huge problem solver in government.”

HOW THE DIGITAL TOOL IS SECURE

The second part of the plan requires distributed ledger technology.

“Distributed ledger is only part of the project,” Tanner said. “We use it very much from a summarized Excel spreadsheet standpoint.”

Distributed ledger technology – or blockchain – stores data in chunks known as “blocks”. When a block’s storage is maxed out, the block is closed, timestamped and attached to the last closed block in the chain, according to Investopedia. The chain and the timestamp create a timeline of how a record has been updated. The blocks also cannot be reopened, making the information stored in them immutable.

This immutability appeals to Rhode Island, and the plans call for storing the data lake’s information in blocks. Of course, individuals’ personal circumstances are not unchanged, and updates to residents’ information – such as the loss of a license or a change in listed name or gender – will be entered as new blocks in the chain.

Tanner also aims to use open-source technology, “so that other governments can copy what we’re doing,” and hopes the effort can reduce fraud enough to convince the Assembly that this approach deserves continued funding.