Is Blockchain the Answer to Identity Management?


The ideal in identity management is to have a single source of truth — one repository that holds a unique ID for each user and allows users to access all the resources they’re entitled to. Very few (if any) organizations have achieved this ideal. In most cases, users maintain multiple sets of credentials to log into various systems.

Single sign-on (SSO) is merely a Band-Aid on this problem. SSO masks the complexity of multiple identities by enabling users to gain access to multiple resources through one authentication mechanism. The SSO system serves as a proxy, managing the authentication process for each application the user needs to access.

Could Blockchain be the answer to this problem?

Blockchain is a form of digital record-keeping that makes a history of information visible, accessible and transparent to users in a distributed network. When blocks of data are created, they are added to the digital ledger, or chain of data, in chronological order. Once data is added to the chain, it can only be altered if network participants agree that the change is valid. If consensus is reached, a new block of data is added to the chain reflecting the modification, and the new information is immediately available to all network participants.

Blockchain was originally developed to enable transactions using bitcoin digital currency without involving a central bank as a middleman. Traditionally, when participants in a financial transaction don’t know or trust each other, you need a trusted third party such as a bank, to act as intermediary. Blockchain makes it possible to process financial transactions quickly and at a low cost without the need for a third-party intermediary. It also enables users to see the details of previous transactions.

In the realm of identity management, Blockchain could make it possible for users to have a single identity across all applications and services. The most current credentials would always be available and there would be no need to reconcile any differences. Individual users could maintain control of their identity information, which would be shared only with the applications and services they authorize.

Blockchain could also increase the security of digital identities. Changing identity data would require a coordinated effort among a large number of distributed IT teams, which is why blockchain is virtually tamper-proof. Because a blockchain is built on a distributed network, there is no central point of failure, which makes it highly reliable.

While a number of industry pundits are enthusiastic about the potential for Blockchain in identity management, others are much more cautious. Blockchain remains a nascent technology with only a handful of identity-related initiatives in the works. Standards and best practices would need to be worked out for the technology to be viable on a large scale, and strong protections put in place to ensure the privacy of personal information.

Right now, conversations involving blockchain are focused mainly on potential. However, millions of dollars are being poured into research and experimentation. While it’s far too early to consider Blockchain in your identity management strategy, now is the time to familiarize yourself with blockchain technology and stay abreast of advances that might add value to your organization.


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