Digital Identity Enabled by Blockchain Technology

[Please Note: I first published this article around 8th July, 2019. I deleted this article, accidentally. I do not know if there is any way I can recover the last one. In the meantime, I am publishing this for the second time.]

Personal Experience:

The year was 1998. I was an active member of the local Rotaract Club. It was around that time when the mission was to eradicate polio. As part of my social work, I volunteered in a number of polio vaccination projects. Our teams visited various impoverished parts of the city including Red Light areas and we saw the conditions of women, children and the underserved.

2001. I graduated from college, by then. I started living in New York. Being a fresh graduate, I could not afford much. So, I rented a room and shared an apartment with two other immigrant families in Jackson Heights, Queens. I was on OPT and held a Student Visa. So, I was a nonimmigrant alien. I worked in Manhattan and traveled by Subway 7 Train. On weekends, I volunteered in the local public library to teach English as a second language. That’s where I met people from Latin America and other parts of Asia. Many of them were undocumented immigrants and migrant workers. Life of an immigrant is never easy. I realized from the stories I heard from them that life of an undocumented immigrant is even more difficult.

2003. I moved to St. Louis. This time, I met refugees from Eastern Europe. They came for various reasons and were mostly legal immigrants but had to start all over again in U.S.

Back home, in Mumbai, around 2012, I remember, once, the faucets in the kitchen and bathroom of my apartment, stopped working. I called the plumber. He fixed the faucets and then I learned that he was not keeping well and when asked why he did not go to the hospital, he said because he did not have papers. He was living as an undocumented migrant worker.

This is the reality. People move from places of low economic opportunity to high economic opportunity; most of them, they leave their families, not because they want to, because they have to. They earn and send money to their families back home to feed them, clothe them and with the hope that their children will have a better life than what they did.

Realities and Problems:

In almost all the above cases, there were a number of common things among the refugees, undocumented immigrants, migrant workers and the underserved population of the world. Legally, many of them do not exist. They are living, breathing human beings yet they have no concrete identities. They come from various ethnographic, racial, cultural, religious backgrounds. But what happens without the existential identity? Without identity, they are deprived of various social, economic, legal benefits, rights and services that citizens take for granted. They live with constant fear and anxiety of deportation. They are also easy targets of human trafficking. Often times, they cannot get necessary treatments at hospitals, they cannot open bank accounts, they cannot vote, they cannot take legal help and more – because they do not have legitimate identity. Additionally, NGOs and organizations are at a loss because without accurate data, they are also not able to efficiently deliver basic human services and make right use of the aids.

Let me quantify the magnitude of this grave reality. According to World Bank Report, it is estimated that one billion people are still unable to prove their identity. It is also said that majority live in underserved regions of Asia and Africa; more than a third are unregistered children and most affected are marginalized groups – women and children, indigenous people and ethnic, linguistic and sexual minorities.

As per UNHCR Global Trends, 70.8 million forcibly displaced worldwide as a result of persecution, conflict, violence, or human rights violations at end-2018. It is said among them are world’s over 25.9 million refugees, many of whom might have left their proof of identifications behind.

Understanding an identity is crucial for social and economic inclusion and sustainable development, the UN’s Sustainable Development Goals (SDGs) set a target of providing legal identity for all by 2030. “Digital identification can play an important role in achieving the sustainable development goals. It can enable the world’s poorest and most vulnerable people to gain access to critical services, from education to healthcare and financing, while also advancing their legal and political rights.” – UN Deputy-Secretary-General Amina Mohammed. As a result, a large number of digital identity initiatives have been launched such as UN’s ID2020 alliance and the WorldBank’s ID4D platform.

Definition of Digital Identity:

So, what is identity? Identity is the way we can legitimately verify that a certain individual is actually the person who s/he says s/he is. So, what is digital identity? According to Wikipedia, a digital identity is information on an entity used by computer systems to represent an external agent. That agent may be a person, organization, application or device.

The next question is why do we need digital identity when we have the option of paper-based identity? All this time, Government and State took the responsibility of verifying and authenticating identities. However, paper-based identities are lost, stolen or damaged because of identity thefts. People do not have much control on how the identifies get used and shared for personal gains. Additionally, in this digital era, we shop, bank, date, find jobs, take courses, and get healthcare advice online. Digital identifies are comparatively secure, trustworthy and enable services to be provided online and cross-border. It helps to strike a balance between security, privacy and convenience.

Solutions:

Here are some real life examples of how blockchain technology based initiatives have attempted to solve the issues faced by refugees, underserved and undocumented immigrants. BanQu, an American company, provides economic identity and financial inclusion for people who are refugees and living with extreme poverty with the use of blockchain technology. For example, in Dadaab refugee camp in Kenya, BanQu platform helps displaced Somalis create economic identities. A combination of bio-metrics, selfies, key physical characteristics along with other information help create an identity which gets uploaded in the secure immutable ledger. This is in turn, is used to extend credit or to enter a contract. Dublin software company, AID: Tech provides digital entitlements, including welfare, aid, remittances and donations using blockchain and digital identity. For example, AID: Tech along with PharmAccess have been using the platform to monitor digitally guided pregnancies in Tanzania. Hopefully, this initiative would address some of the healthcare challenges like lack of healthcare funding, high child and maternal mortality rates. According to the World Bank’s Global Findex Database 2017 (Findex), there are approximately 1.7 billion people who are not yet covered in any financial inclusion programs. Hence, they are vulnerable and are not able to gain access to traditional banking facilities. International FinTech company, Humaniq, reached out to these underserved and unbanked people of 46 countries in Asia and Latin America to provide social and financial inclusion. The blockchain platform with a wallet, bio-ID, secure messaging, end-to-end encryption, live support chat features and transaction fees close to zero is all set to empower the populace. BitNation, the world’s first Decentralized Borderless Voluntary Nation (DBVN), helped Syrian refugees to obtain digital ID documents. Using Ethereum blockchain, the United Nations World Food Programme (WFP) gave cryptocurrency based vouchers to feed the hungry. The Helsinki-based startup, MONI in collaboration with the Finnish Immigration Service offer refugees a prepaid Mastercard. This helps the refugees to build digital and economic identity overtime with the record of financial transactions. Accenture and Microsoft, in collaboration with nonprofit organizations in a public-private alliance called ID2020, are helping UN to achieve its goal of providing a legal identity to everyone. This would eventually be an online digital identity wallet which can travel with the person everywhere. This in turn would impact in securing immigration policies. To combat challenges faced by undocumented immigrants and migrant workers, ABRA, blockchain platform, once ready would allow migrant works to send money to their home country quickly and securely. Migrant workers, who do not have proper documentation to work in the host country, can use Handshake, a blockchain platform, to execute employment contracts, fairly and justly.

Benefits:

From the above examples, we can see the blockchain technology platforms can lead to reduction of fraud/increase in transparency and increased efficiency. It is a peer-to-peer network and is designed based on three key elements – cryptography, distributed ledger, decentralization. The cryptographic hash function makes it secured and tamper-evident. The distributed ledger makes the record-keeping collaborative and consensus-driven. It also saves from disaster and data loss because each node (user) would have a copy of the ledger. The decentralization dimension gives power and ownership of personal data to the hands of data owners. Therefore, this is one way of handling chances of data breaches and leaks and preventing internet companies selling personal data. Since it is pseudo anonymous, users have greater control on autonomy and privacy and can decide how much personal information they are going to share. The digital signatures and digital accounts with a pair of public and private keys enable to create and maintain digital identities. Since the transactions and record-keeping are immutable, caution needs to be taken against vulnerability to manual errors of data entry at source.

Concerns:

While blockchain technology-based solutions can be leveraged to solve many of world’s toughest problems, we still need to be cautious. Here is why. First, technically, the permissioned private blockchains may have consensus mechanisms like Proof of Work (PoW) which requires tremendous amount of energy for mining. This may be difficult to be sustainable in the long-run. Second, if we want adoption and scalability, then we also need to develop intuitive applications so that users with little to no training in computers can participate in consensus mechanisms like Proof of Stake (PoS) and Federated Consensus. If this is not the case, then the fundamental philosophy of having consensus amongst users does not get honored. Third, blockchain based platforms can be subjected to various attacks including 51% attacks where malicious nodes can sabotage the blockchain. This could result in massive loss of data and useful information. Forth, if private players are given permission to issue digital identity and there is no standardization, we can end up in scenarios where there would be multiple digital identities and each organization would start competing with each other. If these digital identities are not accepted, universally, by major institutions, then the value of having these digital identities in the first place needs to be thought through. Fifth, scalability and latency can become issues with the increase of usage and volume of transactions. Finally, proper regulation and sufficient collaboration will be required without which there would be too many islands of data silos.

Conclusion:

I am hopeful that with the help of blockchain technology-enabled platforms, my undocumented immigrant acquaintances in New York, my refugee friends from Eastern Europe, the plumber gentleman in Mumbai, the women and children living in impoverished conditions in cities and villages around the world, will be able to get the basic human needs – access to healthcare, banking, food coupons, legal help - to survive with dignity and respect. However, since the technology is still at the early stages of adoption, time will only tell the impact it will have in all of our lives. Having said that, although we say, blockchain technology has built-in programmable trust, in an otherwise trustless world, I would part with a word of wisdom – even though technology is enabling us to collaborate and trust through programming, yet we need to cultivate the desire to ascend to a higher place of existence, consciously and collectively, because for anything to work and sustain, we need to still cultivate faith, dignity, respect in our hearts and souls even in a trustless world because these qualities only give us the greatness of what it means to be human.

Rajyeshwari Ghosh is the Founder at Quantum Holistic Advisory Services. She is a Certified Blockchain Practitioner and a contributing Member of Blockchain Chamber of Commerce. A former Wall Street and Big Four professional, she is a Trusted Advisor and a Management Consultant who advocates holistic thinking, practices interdisciplinary approach to organizational problem solving and advocates meaningful use of Technology for good of humanity.

References:

Clowes, Neil. “Are Digital Identities More Trustworthy than Paper-based Identities?” UNHCR Blogs. https://www.unhcr.org/blogs/digital-identity-more-trustworthy-than-paper-identity/

Bayram, Ahmad Sufian. “Here Are Three Ways Blockchain Can Change Refugees’ Lives.” June 25, 2018. World Economic Forum. https://www.weforum.org/agenda/2018/06/three-ways-blockchain-change-refugees-lives/

Global Trends – Forced Displacement in 2018. UNHCR –The UN Refugee Agency file:///C:/Users/USER/Desktop/Global%20Trends%20Forced%20Displacement%20in%202018.pdf

Graduate School of Stanford and Ripple Works. “Blockchain for Social Impact – Moving Beyond the Hype.”   2017-2018. https://www.gsb.stanford.edu/sites/gsb/files/publication-pdf/study-blockchain-impact-moving-beyond-hype.pdf

Guest Contributor. “Humaniq Doubles Number of Nations Where it Brings Global Unbanked Better Options.” BitcoinAfrica.io. September 20, 2018. https://bitcoinafrica.io/2018/09/20/humaniq-doubles-number-of-nations/

Hempel, Jessi. “How Refugees Are Helping Create Blockchain’s Brand New World.” Wired.com. March 14, 2018. https://www.wired.com/story/refugees-but-on-the-blockchain/

Kumar, Ankit. “How Blockchain Can Prevent Identity Theft.” Blockchaintechnews.com. April 1, 2019. https://www.blockchaintechnews.com/blogs/how-blockchain-can-prevent-identity-theft/

Livni, Ephrat. “Blockchain Technology Can Help Save the Lives of Millions of Refugees by Giving Them a Verified Identity.” Quartz. October 18, 2016. https://qz.com/809143/blockchain-tech-refugee-identity/

Mbogo, Angeline. “Blockchain Startup AID: Tech Joins Hands with PharmAccess to Improve Maternal Care in Tanzania.” BitcoinAfrica.io. June 3, 2018. https://bitcoinafrica.io/2018/06/03/blockchain-pharmaccess-aidtech-tanzania/

Mesropyan, Elena. “22 Companies Leveraging Blockchain for Identity Management and Authentication.” Medici.com. February 13, 2017. https://gomedici.com/22-companies-leveraging-blockchain-for-identity-management-and-authentication/

Nori, Madhu. “Why a Secure Digital Identity System is Needed, Here Are the Benefits.” The NEWS Minute. April 13, 2018. https://www.thenewsminute.com/article/why-secure-digital-identity-system-needed-here-are-benefits-86486

Pettit, Marisa. “Democratising Access to Essential Services with Digital Identities and Blockchain Technology.” RESET – Digital for Good. November 11, 2018. https://en.reset.org/blog/democratising-access-essential-services-digital-identities-and-blockchain-technology-11212018

TrustBit Solutions. Immigration Crisis and Blockchain Solutions. https://www.trustabit.io/immigration-crisis-and-blockchain-solutions/

Valenzuela, Joel. “Saving the World Through Crypto: The Humanitarian Blockchain.” COINTelegraph.com. April 5, 2016. https://cointelegraph.com/news/saving-the-world-through-crypto-the-humanitarian-blockchain

Vota, Wayana. “A Really Bad Blockchain Idea: Digital Identity Cards for Rohingya Refugees.” ICT Works.

January 11, 2018. https://www.ictworks.org/blockchain-digital-identity-cards-rohingya-refugees/#.XQoUgNIzbIVWolfond, Greg. “A Blockchain Ecosystem for Digital Identity: Improving Service Delivery in Canada’s Public and Private Sectors.” Technology Innovation Management Review. October 2017. https://timreview.ca/article/1112

World Bank Annual Report 2017 , https://www.worldbank.org/en/programs/id4d https://pubdocs.worldbank.org/en/908481507403754670/Annual-Report-2017-WBG.pdf

“World Bank Announces ‘Million Billion Challenge’ Winners, Spotlighting the Transformational Potential of Digital Identification and Innovative Ideas to Strengthen Privacy and Empower People.” April 12, 2019

https://www.worldbank.org/en/news/press-release/2019/04/12/world-bank-announces-mission-billion-challenge-winners-spotlighting-the-transformational-potential-of-digital-identification-and-innovative-ideas-to-strengthen-privacy-empower-people

Yaworsky, Kathleen. “How Blockchain and Financial Services Can Reach the Underserved.” Medium.com. June 29, 2017. https://medium.com/accion/how-blockchain-and-financial-services-can-reach-the-underserved-bbe097

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