using digital IDs with blockchain technology in daily life.
Technology developed for blockchain use is changing the way ID management is handled. Even governments are looking at this method to help protect personal privacy and manage data in a decentralized manner. It looks like blockchain methods offer scalable solutions for various sectors.
It is surprising to not that blockchain technology has been around for just 13 years. In this short span of time, its applications encompass logistics, security finance, data and much more. The idea to use this capability to ID people got a start when Changpeng Zhao was visiting Palau, an island nation to start its program for digital residency.
Consider this – the market for ID management using blockchain is expected to touch $3.6 billion in the years spanning 2021-2025. Factors propelling this growth include increased digitalization demand and the need for privacy-related identity solutions. Due to this market need, a multitude of solutions were introduced. These solutions were in the form of distributed ledgers, NFT and very barebones technology based on blockchain.
Given that there are plenty of use cases that could use blockchain effectively, governments are looking at ways to use this technology. One such use case is digital currencies issued by central banks. Traditional ID methods are not very streamlined and open to fraud and theft. Besides, ID confirmation is difficult due to verification across multiple systems.
Blockchain technology is far simpler and more streamlined. It can be used to maintain records on the internet and verification is easy as it is done on just one system. NFTs are being tested by governments as a means of reducing costs of operations. Widespread adoption and implementation for items like driver’s licenses and passports will take time but it will make life much easier. ID theft and fraud would become impossible. It is a matter of time as governments consider their options.