HomeAltcoin NewsHow Cryptocurrencies are Revolutionizing Identity Management

How Cryptocurrencies are Revolutionizing Identity Management


The Internet has over 3.5 million users – a number that continues to climb with each passing day. For many of us, the online world has managed to cement itself as one of the bare necessities of our lives and is something we couldn’t imagine living without. Many people depend on it for their entire businesses and livelihoods.

The Internet transcends many of our boundaries, has become one of the major forces behind globalization. We use it to stay in contact with friends and family, do our weekly shopping, and even to buy property and make investments.

Naturally, many of these transactions require us to verify our identity.

The Current State of Identity Management in 2017

Our current identity systems are planned and managed centrally. This leads to subpar integration between systems, and strips control away from the users. It causes increased threats, data leaks, loss of privacy and even identity theft.

It’s clear that an alternative to the current centralized method is in order. Our data systems have failed to deliver on security, ownership, access, protection and, most importantly, privacy.

A New Way to Gain Control of Your Identity…

One startup that we’re especially excited about is SelfKey.

This platform proposes that its users should be at the core of their identity management – a concept known as Self-Sovereign Identity (SSID). It uses blockchain technology to create a decentralized system that shifts control back to the user.

SelfKey overcomes the challenges presented by centralized identity systems, whilst still maintaining compliance with Know Your Customer (KYC) regulations and national data protection laws. Users are assured that human rights and the fundamental freedoms of identity are met.

Even better, it allows us to keep our personal documents physically and within our reach and control. We wouldn’t give our passport or driving license to a third party and expect them to take care of it, so why are we so willing to hand over our private digital information?

Getting Started with Your Digital Identity

It starts with the purchase the token, which has been named ‘KEY’ (Key to Encrypt Yourself). KEY is an ERC-20 token that is essentially the powering force behind the network.

KEY tokens are a means to incentivize participation and good behavior within the SelfKey community. To receive tokens you must first apply, then complete your onboarding KYC and send your payment in Ether from your digital wallet (off the system).

Each user will have a private key that is completely unique to themselves and won’t be shared with other users.

This private key will become the user’s digital “pen” that can be used to add their unique digital signature to documents. Whenever the user applies this digital signature to a document, it will authenticate and validate the user’s identity. This is a safe and secure process, as no one other than the user themselves will have access to their private key.

The user’s private data will be stored on a device personally owned by them, and will only be shared with approved third parties. Minimizing the amount of data shared is ultimately a safer option for both the identity provider and the relying party.

You can see the full list of features available in the SelfKey marketplace demo.

Companies and businesses can even collaborate to list their own product in the marketplace. SelfKey is currently in the process of building partnerships to broaden their marketplace offer and expand to different sectors such as P2P loans, commercial loans, wealth management, payment processors, and credit cards.

SelfKey will power the KYC processes of token sales to make them less burdensome. So far SelfKey has handled the KYC processes of Gatcoin and Airswap.


The Benefits of a Decentralized System

A decentralized system like this one has numerous advantages when compared to the centralized system we have come to rely on.

Some of these benefits include…

  • Users have full consent and control of their identity.
  • Users can authenticate their identity for multiple services through a single key pair stored in a wallet.
  • Users are required to share a minimal amount of information.
  • Full international compliance for relying parties.
  • There is no one party in control – the application is driven by users and is very user-centric as a result.
  • It is designed to be used in an international context.

The Future of Identity Management

As the world progresses and the Internet continues to become increasingly complicated, the need to protect our identities is becoming ever-more important.

The self-sovereign identity system proposed by SelfKey is undoubtedly more private, secure and efficient.

Countries are already beginning to notice the benefits of cryptocurrencies. Vanuatu has just started accepting Bitcoin as a means of payment for citizenship. Even more excitingly, Vanuatu is currently piloting SelfKey, and could be the first to move forward to this new way of identity management.

You might not know much about this tiny Pacific island nation, but it’s definitely taking steps in the right direction!


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