The number of government-issued digital IDs will grow to 5 billion over the next five years, but blockchain-based products are behind the curve and will not be a big part of the solution, according to a new research report.
While government-issued digital identity platform built on blockchain technology are expected to grow 35% annually over the next half-decade, they will only make up 10% of the digital IDs issued by 2024, according to “Digital Identity: Technology Evolution, Regulatory Analysis & Forecasts 2019-2024,” a report released by Juniper Research on July 9.
The report focused on government-issued IDs, rather than those created for and by businesses.
“We expect strong growth in blockchain-based digital identity solutions over the next five years,” said James Moar, the report’s author, in a statement. “However, with simpler apps being quick to develop and almost indistinguishable from a user perspective, companies and operators will need to be the ones to drive the use of self-sovereign identity forward.”
Emerging economies in Asia and Africa without strong legacy ID systems will likely leapfrog developed countries in issuing digital ID cards and mobile apps, the report predicted, noting that African countries including Malawi and Nigeria will have issued 420 million digital identity credentials to citizens in just three years.
One such program combining the public and private is the 70 million Mastercard-branded digital IDs being issued by Nigeria through the end of 2019, Bloomberg reported last year. A government-issued chip-and-pin card with biometric information and travel documents, it will also be used for tax and health insurance, and can act as a payment card. The program’s long-term goal is to issue 120 million digital IDs.
These IDs are part of a partnership between Mastercard and Microsoft that aims to create a globally interoperable digital identity service based on blockchain technology, said Ajay Bhalla, president, cyber and intelligence solutions for Mastercard, in a December 2018 release. “Today’s digital identity landscape is patchy, inconsistent and what works in one country often won’t work in another,” he said. “We have an opportunity to establish a system that puts people first, giving them control of their identity data and where it is used.”
Another government digital ID program built of blockchain is the Canadian-Dutch pilot program testing paperless international travel launched in late June in partnership with the World Economic Forum, Forbes reported. The Known Traveler Digital Identity initiative is based on a digital wallet stored on the users mobile.
Late last year, global consulting firm Deloitte partnered with Attest on a government- and consumer-focused digital identity solution.
“Combining government’s robust identity verification infrastructure with a platform engineered for security, privacy and scale can also unlock tremendous value for both citizens and businesses outside of government,” said Attest CEO Cab Morris in a statement. “A government-issued digital identity has the potential to reduce costs and risk for businesses in all industries, while also providing citizens with greater security, privacy and control over personal data.”
Aside from providing an accurate and immutable identification document, a major component of digital IDs on self-sovereign identity movement, which focuses on giving people control over their own data, including what is shared when doing business with others. The idea is to create zero-knowledge proofs, which means telling the other party the minimum about of information possible. For example, a retail purchase must confirm that the buyers account has sufficient funds, but with zero-knowledge proofs, it could do so without identifying the buyer’s name, address, past shopping history, and other data currently swept up in credit card transactions. Some privacy-focused cryptocurrencies such as Zcash (ZEC) incorporate zero-knowledge proofs.
An advocate of this is the Sovrin Foundation’s Sovrin Network, a global digital identity system that opened to credential developers in March. Based on self-sovereign identity movement popular in the blockchain community, it is built on Hyperledger. Foundation members include Cisco, Deutsche Telekom, and IBM. IBM Blockchain has its own digital ID platform, IBM Verify Credentials, currently in testing mode.
On July 4, Fujitsu became the latest company to launch a digital identity platform. This consumer-focused offering will not only confirm identities, it will incorporate a “trust score” to help participants determine the credibility of the people they are doing business with.
“As the number of users who utilize these services increases, it becomes more difficult for users or a third party to grasp what sort of people the other parties are, increasing the possibility of maleficence,” Fujitsu said in a statement. “his necessitates a system whereby users can evaluate for themselves the truthfulness of the identity of the other parties in the transaction.”