Identity privacy and protection have been hot-button issues over the last few years as data breaches have increasingly become the norm instead of the exception. Whether Facebook, LinkedIn, or Yahoo, big names across the internet and offline worlds have repeatedly proven vulnerable to these growing risks. The chances of information being compromised might seem marginal for the companies themselves, but for the users, the risks are all too real.
Identity fraud is too common, with scams costing 49 million Americans nearly $56 billion in 2020. With the pandemic forcing more daily activities online, the scale of the problem has become staggering, sending searches for privacy and identity protection-related services surging. Although centralized service providers assuredly take information security seriously, their efforts aren’t enough to keep ahead of the fraudsters.
One of the main reasons these issues continue to crop up is because of how user data is applied and stored. The current paradigm stores most of this user data like payment and usage information in centralized servers and calls upon this data using personal credentials stored in the space. The use and centralization of credentials ultimately help fraudsters connect the dots.
Although the wave of decentralization via blockchain technology has produced many real-world use cases, decentralization of personal information and identifiers shows great promise in helping circumvent this serious identity fraud problem, not to mention proactive security measures. Moreover, it can help tackle personal data ownership in a meaningful manner.
Separating Identifiers from Identities
Restoring sovereignty to individuals has been a longstanding goal of blockchain technology. While finance is a major area being pursued to this effect, sovereignty in the identity and data arena is just as important. One company taking charge in this arena is BOTLabs Trusted Entity.
Its recently launched platform, SocialKYC, operates a decentralized identity offering designed to help users exert total control over their data. The platform effectively issues personal credentials to users representing their ownership over accounts, ensuring that users can prove account ownership without compromising other, valuable personal information.
Once the credentials are issued, SocialKYC doesn’t store the user or credentials within its system, ensuring that personal information cannot be shared or monetized without a user’s knowledge. Instead, any data is contained within a user’s wallet or personal device, ensuring complete control.
Any service that accepts the SocialKYC credentials will not be entitled to other personal information from users, restoring sovereignty over data to the point where users can determine when, what, and how much they are willing to share.
Besides disconnecting personal identifiers from identities, one emerging blockchain technology is going a step further to prevent digital metadata surveillance and monitoring online, whether focused on payment credentials or personal data.
NYM, a privacy infrastructure provider, has generated its first block on the Nyx blockchain, ensuring that its suite of privacy-oriented solutions, like a mixnet web browser designed to obscure a user’s internet traffic, can function in a decentralized and incentivized manner.
This mixnet allows access through anonymous “Coconut” credentials that effectively obscure a user’s identity. Validators that form the network’s consensus to offer the services in a decentralized format are incentivized to power the network with NYM tokens.
Together, these activities support a privacy infrastructure designed to shift data ownership back to users, helping individuals protect their identities, especially in payment gateways and other areas where personally identifying information may be exposed.
Overall security is another area where blockchain-based technologies are overtaking peers, and wallet technologies that can store a user’s personal information are already taking preventative measures to keep private keys out of the hands of would-be fraudsters.
Belgium-based NGRAVE provides an EAL7 (Evaluation Assurance Level 7) certified cold hardware wallet solution that meets the highest criteria possible for safeguarding high-value assets or high-risk environments.
With crypto hacks in many ways mirroring trends in identity theft and fraud, preventative security measures are already in high demand, and the security certification puts NGRAVE ahead of the entire industry, not to mention the traditional financial services industry.
In addition to its focused approach to user experience, NGRAVE is designed to ensure that private keys aren’t exposed to blockchains, users never lose their private keys or have a recovery solution, and can securely store and transact, safeguarding the most vulnerable vectors fraudsters like to attack.
Conclusion
Blockchain-based initiatives demonstrate that better information security models have already arrived, considering the high risk of personal information and privacy being compromised. Most importantly, they highlight that personal sovereignty over information, data, and even crypto keys is not only possible but the need for the moment as privacy considerations remain in the spotlight.
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