We live in a digital world, where digital identities are ubiquitous. Nowadays even national governments, like Estonia, India, Japan join the trend of digital identity verification.
For instance, Estonian ID smart-card is issued since 2002 and serves as identification method which is recognized all over the European Union. Another example is Aadhaar, which is a 12 digit unique-identity number issued to all Indian residents based on their biometric and demographic data. However, earlier this year, this innovation already brought over a local catastrophe, demonstrating once again that vulnerability exists not only on the user’s end, but in the storage of such information.
Lack of security in standard digital identification
In January, the Centre for Internet and Society of India warned citizens, that due to a leak from governmental data-center, 135 million Aadhaar accounts with sensitive financial information appeared on open access in the web. The leak was not an intentional crime but rather as a result of negligence from governmental officials, resulting in the mass scale financial fraud.
Digital identification of people and legal entities quite essentially fits in the paradigm of digital economics and digital jurisdiction. Along with that, nowadays the darknet is becoming a blossoming market of personal information, where compromised data of all types is sold cheap as chips. The need for better security where sensitive data is concerned is becoming a number one problem for the developing virtual space.
The early adopters of blockchain technology praised cryptocurrencies for their anonymity and headiness of freedom. That mood is still present, but digital jurisdiction has started to form alongside the rise of digital economy. This is forming as a result of the realization that no legal arrangements or relations are possible in anonymous space. Some may think it as a piece of bad news, but the deanonymization of cryptoworld is already happening.
The year 2017 started with a raid on the three biggest Chinese cryptocurrency exchanges, initiated by People’s Bank of China. During the thorough examination, the exchanges were forced to put a restraint on their activity, which resulted in a temporary drop of bitcoin’s rate. Ultimately, the exchanges were permitted to resume operations with substantial limitations and a requirement to integrate KYC & AML standards, as well as a procedure of mandatory identity verification for the customers. This is in line with most US cryptocurrency exchanges give access to their services only for the verified users, especially when handling large amounts of funds.
Being unable to control these powerful and roaring streams of cryptocurrency, governments quite predictably try to take these avenues under their control, determining where the money goes in and out of the virtual economy: exchanges, trading services, etc…
Restrictions, that seemed to be elusive a few years ago when crypto-trend was just breaking in are now suddenly a reality.
The blockchain solutions
It is almost inevitable that digital identification will form a basis for the legal relations in the digital jurisdiction of the future. Digital rights and their protection will have to be linked to a personality or legal entity, in order to gain legal status.
In this case, once again, blockchain provides us with a secure and transparent solution which will guarantee safety and authenticity of sensitive personal or corporate data.
By tackling up the power of the blockchain, Jincor project, which is building a platform for B2B interactions, aims to provide a digital identification service for companies and individual entrepreneurs. These digital IDs will be basic elements for the fully-fledged legal functioning of corporate players in digital jurisdictions of the future.
Incorporation into the digital legal framework is a necessity for companies willing to take advantage of blockchain technologies such as smart-contracts or crypto-payments. Through the digital legal framework, counter agents will know that they are interacting with a legitimate entity or individual. Consequently, digital identification is a key element to maintain trust in decentralized community.
Decentralized identity solutions are a hot topic in blockchain space right now. One of the most exciting services is Civic, which was launched by Gyft co-founder, venture capitalist and blockchain-star Vinny Lingham. Civic’s application looks and works like a digital wallet, but instead of money, it secures personal information, while allowing users to selectively share it.
“Basically,” explains Lingham, “Civic validates your personal information and identity, stores it on your mobile phone and only you can see or use that information.” This decentralized approach to identity storage and retrieval creates a bridge between real-world and cyber credentials, according to the startup’s website.
Jincor appreciates this innovative approach and at this stage of development is considering the possibility to integrate Civic solution with the Jincor’s services, so that company’s ID could be linked to the ID of its owner, which would make the whole space even more trustworthy.
In one of my previous articles, I described how a decentralized arbitration system can be implemented on the blockchain platform Jincor. In case companies are considering smart-contracts as a way to settle a deal, it’s quite reasonable for every party to foresee possible disputes as well. Regardless of the type of a contract, disputes may appear after any agreement, and a blockchain deal is not an exclusion. In the Jincor ecosystem, smart-contracts will be available only for verified users.
The service of digital identity verification has the potential to streamline business arrangements in the blockchain universe, whilst ensuring the safety of sensitive data.
Featured image from Steven Lelham on Unsplash
Disclaimer: The author acts as an active team member and adviser to the Jincor project – which is working towards a decentralized arbitration system as mentioned in this piece. Author’s views are her own.
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