Identity fraud affects millions of Americans every year.
NBC News reports that, according to an analysis run by ID Analytics of 290 million social security numbers, the odds that someone else has used your social security number is one in seven.
As financial transactions move online, the need for comprehensive online security is greater than ever since the internet makes it easy to commit fraud once a scammer has the information required. Online credit applications and online stores are simple to defraud once a person’s personal details are known.
The internet is so hacker friendly that even an inexperienced pirate can wreak havoc with minimal effort. A 2017 Identity Fraud Study, released by Javelin Strategy & Research, found that $16 billion was stolen from 15.4 million U.S. consumers in 2016, compared with $15.3 billion and 13.1 million victims a year earlier. In the past six years, identity thieves have stolen over $107 billion.
A recent cyberattack shook the U.S. and made clear the gravity of the situation. A major security breach was released to the public, making known a cyberattack on Equifax, which accessed the information of 143 million people. This sensitive information contained a trove of personal information: from people’s social security numbers to driver’s licenses and even credit card details. One of the staggering angles of this event was the fact that the hack was only made public six weeks after the event occurred. This is alarming not only because of the lack of transparency shown but also because of the nature of the information not given, leaving millions unaware of the very real danger of identity theft.
Unfortunately, the dangers don’t end with our financial records. With internet of things (IoT) applications evolving rapidly, more aspects of our lives are left vulnerable. Not only are our details being uploaded to servers but other elements of our lives as well. There are many dangers to having so much of our personal information including purchases, school records, medical records, social security numbers and job details recorded digitally. While identity theft protection/insurance services have been heavily marketed, their value has been called into question.
Blockchain technology provides the opportunity to do better in protecting our data. There are over 20 companies in the “blockchain for identity” space right now hoping to tackle a wide range of business and personal identity solutions. Much of the innovation in this space is already changing the way we think about identity. The decentralization of information prevents the eager fraudster from making any use of personal details as well as providing new autonomy over all data to the user. In addition, by fusing one’s historical records with blockchain technology, we can see the emergence of credible solutions for those individuals lacking official identification.
Civic is an example of an authentication service on the rise. Through the platform, a user’s personal information is encrypted and placed on a blockchain, thereby ensuring that the data cannot be compromised. Systems like this could, for example, be used in voting to limit the possibility of manipulation.
There are other companies who have taken digital IDs one step further, using distributed ledgers to ensure safety and security for private information online.
VALID is one such company that is creating a self-sovereign digital identity solution giving people complete ownership and control over their personal data, combining it with a secure and transparent marketplace to match identity owners with data consumers. This will allow identity owners to handle all personal information, stored in a wallet on the blockchain, and it may, one day, replace other forms of identity verification.
Another company in the space is called Ocular. The system is user-friendly and allows governments, banks and regulators worldwide enhanced and ongoing verification of customers using a “three factor” authentication system to integrate standard background checks with advanced facial recognition technology.
UniquID, meanwhile, focuses on the IoT space with a secured identity platform designed to work on home devices. As the number of smart devices in the home grows, users need a reliable way to connect seamlessly to everything without giving up reliability or security. Using a blockchain-based platform, UniquID offers a decentralized, Bitcoin-inspired access management solution to help consumers and businesses secure their IoT devices.
Blockchain solutions may be the future for verification of identity, but these companies are still in need of global recognition before they will replace other forms of verification or eliminate the middleman entirely. Until then, it is still our responsibility to protect our private information and take every precaution in any procurement of our details. Only time will tell if blockchain technology can deliver on all of its promises, but the future looks bright for online identity solutions with so much capital, investment and innovative talent vying for their place.
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