Identity and Blockchain by Henry Zhang, Impact Investing Intern, University of Toronto

With the breakout in the price of bitcoin (from $1177 on March 16 to $1832 on May 16) and the rise of blockchain technology, people now have a “blockchain” view on the future of society. Just about every industry has to deal with internet data and the inherit the risks - data integrity, data transparency, and/or third party inefficiency. This means they can all use blockchain technology and the distributed ledger technology to mitigate or eliminate some or all of the these risks.

One industry which has recently gotten a lot of attention is the identity management industry. Fortunately, since I am in Washington DC for the summer, I had an opportunity to attend the 2017 K(NO)W Identity “intellectual fest” and hear what experts in the identity management field have to say about the issue.

Admittedly, this was a hard conversation to follow. Half of the time they were throwing out jargon I did not understand and the other half of the time they did not provide clear, concise answers to questions. They were all over the place. Out of this messiness, I was able to extract one piece of information that all of the experts agree on: blockchain is not the right solution for current problems of the identity management industry. Blockchain, after all, was designed to solve the problem of double spending, not to solve identity management issues.

But the broader concept of the distributed ledger does suggest many new and better ways of doing things related to identity. One good example (mentioned by one of the experts) is pure peer to peer interaction without the facilitation of a third party (such as Facebook or Twitter). This can be accomplished using a straight forward identification and authentication process via an automated system, similar to that of smart contracts.

My personal thoughts

While I am still learning about the identity management field, based on my current understanding of blockchain, I think blockchain can be applied to the identity management industry.

Blockchain provides a solution to the privacy issue (encryption, hash function), and removes a central authority from personal identification data. The technology can also improve the efficiency and accuracy of a given registration process.

Of course, the exact process for reaching any of these goals is still up for debate. This is the real question, and that’s probably why the "experts" weren’t so excited about it. 


Impact Investing

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