South Korea is doubling down on blockchain by using it to manage digital IDs

South Korea ranks at the top of the world when it comes to using technology in everyday life, business and government. In keeping with this tradition, South Korea plans to adopt blockchain-based digital IDs to further boost economic growth.

Using blockchain-based digital IDs to promote economic growth

The technology-embracing government of South Korea plans to implement new digital IDs for the population. These would rely on blockchain technology for security and storage. The government itself would not have direct access to the identification “cards”, and the chance of identity theft would be greatly reduced by the fact that no central server stores the information. Instead, hackers must break into each individual’s device to steal or manipulate the data.

Blockchain is widely known as the engine behind bitcoin and other forms of cryptocurrency. However, it is useful for much more. Blockchain is actually a digital log of data that devices on the network verify and keep secure. Since it’s all decentralized, there’s nowhere hackers or identity thieves can look to steal data.

Right now, Koreans use citizen registration cards, very similar to a social security card in the US, to identify themselves. The proposal is being investigated, according to a report from South China Morning Postwould allow Korean citizens to embed these IDs into their mobile devices.

A growing trend towards the digitization of identification cards

Other nations have already begun to embrace digital identification. This technology could eliminate the need to photograph identification cards or certificates or use text message authentication codes to apply for government benefits, transfer money or even vote.

In Estonia, for example, most of the country’s eligible 1.3 million residents use a digital ID to vote, pay bills and sign documents. The authorities there allow mobile phones to be used for identification if a special SIM card is attached. South China Morning Post points out that Germany has a similar program and China is not far behind.

In the US, several states are adopting Apple’s implementation of digital driver’s licenses and identification cards. This feature, dependent on a US government patent assigned to Apple, will be of limited use at first. It will be recognized by certain TSA security checkpoints at airports, but for no other purpose.

South Korea’s digital government agency suggests the country could see an economic value of 3% of gross domestic product, at least $42 billion, within a decade. An economist at Korea’s Science and Technology Policy Institute outlined the potential benefits of blockchain-based digital IDs:

Digital IDs can bring enormous economic benefits in finance, health care, taxes, transportation and other areas and can quickly catch on among the Korean population. But there needs to be more risk assessment technologically to ensure that the danger does not outweigh the benefits.