Deloitte: Blockchain smart identity has the ability to get rid of paper IDs, but it is still a long way from full implementation

Deloitte, one of the world's four largest accounting firms, is currently developing a universally compatible blockchain smart identity project that has the potential to impact every aspect of our lives. In an era where more and more data is transferred using mobile phones and electronic devices, identity management is still stuck in the paper era.

Traveling abroad, driving a car and obtaining benefits from a country all require some form of identification (ID) in paper or plastic form. Various public and private organizations often ask for personal or company identification information, which is often required repeatedly throughout the day.

Deloitte is working on a blockchain-based 'smart identity' that aims to permanently solve this problem and move us away from the paper-based identity era.

Blockchain can provide a universal identity

Allowing users to manage their own identities and having trusted third parties verify them opens the door to an era where we are no longer constrained by the need to constantly prove our identity.

Digital identities running on blockchain technology can not only authenticate businesses and individuals, but also "objects or things".

Alexander Shelkovnikov, Deloitte UK blockchain leader, said of the project’s current progress:

“Smart Identity is a working prototype of an identity that is constantly evolving based on real feedback from users. It enables new ways for people, organizations, and things to obtain and use verified identity documents to transact with each other.”

Sovereign identity is still a long way off

In an ideal world, people should be able to manage their own identities and be responsible for how those identities are shared. Deloitte recognizes this need, but they know we are still a long way from this goal. Alexander Shelkovnikov said:

“Our ultimate goal is to build a world where users can securely and seamlessly own and manage their own identity. However, we also understand that this is an evolutionary process and there are many stages to go before we can reach a state where we have true self-sovereign identity and do so in a way that governments, regulators, financial institutions and others can accept and trust.”

The identity of people and things

A central question for all types of digital identity is: Who is responsible for the identity service?

People always expect their privacy to be protected when they are separated from their personal information and their identity information is used for the purpose for which it is shared. As Shelkovnikov said:

“The power of smart identity is that it is designed to be owned by a person, an organization or even a thing. We don’t view these parts in isolation, we see a growing need for interaction and easy interfaces between consumers and businesses when it comes to providing different services. As things like self-driving cars, drones and other internet-connected devices become part of our daily lives, these types of objects will also need a secure identity record that is easy to manage or control when necessary.”

Able to run on all blockchains

An interesting aspect of the Deloitte project is that Smart Identity as a protocol can be easily used on different blockchains, and the current version of the prototype is using the Ethereum blockchain. When asked who will actually hold the data, Deloitte said there are many trusted data repositories available, but in the future a hybrid model involving a network of trusted custodians and distributed data services will also be used.

Future scope of application of smart identity projects

In order to get rid of the paper-based identity system we are still using today, it is inevitable that various institutions will need to be involved in this process, including governments, businesses and individuals.

Cointelegraph asked Shelkovnikov about the question of provenance and how it would be implemented. Deloitte said that provenance might be added to the project later:

“The range of identity documents/attributes that can be managed is endless, and we expect state-issued identity documents to be used in a smart identity ecosystem. Importantly, however, the provenance itself is not provided when an identity document is first added to a profile, but rather in a subsequent digital voucher of the document by one or more third parties, stored in an underlying document, and verifiable on the blockchain. Anyone can claim to have driver’s license X, but only one person has a voucher document issued by the issuing authority for that identity document.”

Providing identity to those without it

One of the central problems in third world countries is that millions of people cannot prove their identity, which results in them being deprived of basic services and benefits. Regarding whether smart identity solutions will expand to developing countries, Deloitte does not see any barriers to the deployment of such technology, which is already developing globally without any geographical restrictions:

“Our goal is to solve the digital identity problem and enable everyone to participate in the identity ecosystem of the future, without geographical restrictions and with zero or very low joining costs. The current prototype can be considered a reference implementation of an underlying protocol (a protocol is a set of rules that describe how to interact, how to form, create and verify identity information), and real-world applications that can be implemented and run by anyone. Over time, this will create a competitive environment where everyone from individuals to startups or even multinational organizations can obtain/provide identity services on a decentralized free-to-use blockchain verification layer. We work closely with colleagues around the world, including from third world territories, and look forward to seeing such services appear in all environments, especially where the social or economic need is greatest.”