New analysis reveals that over 15 billion pieces of stolen data are now available for sale on the dark web, which is equal to two accounts for every person on the planet. It is also no wonder that the ID fraud frequency is currently at the highest levels ever.
A team spent eighteen months auditing fraud and business forums and concluded that since 2018 the number of data stolen has risen by 300 percent. However, it is determined that there are five billion unique pieces of knowledge, as revealed by the study. This data is valuable since it is potentially newer and hence profitable.
This provokes the fact that digital identity verification and KYC procedure needs to be armed with high-security measures with the help of blockchain technology. AI will build and exchange financial goods by converging Blockchain and AI in machine learning.
Blockchain is a data archive that tracks basically everything of importance and not just economic transactions. A main advantage of blockchain is that it helps unrelated parties to process and exchange data on a shared directory with each other.
Support of enforcement software is necessary to the blockchain industry and financial institutions that incorporate blockchain. One such asset is the know-how of its clients, a way by which blockchain service providers can validate their customers’ identities. This would allow blockchain services to be simpler for consumers to use and reduce enforcement costs for blockchain retailers that are constantly facing increased regulatory requirements.
However, the KYC procedure allows any potential applicant to ensure that the user is not engaging in any illegal activity in order to be able to share details with the financial institution involved. Users will usually be asked to submit images of their passports or driver’s license before they can take full advantage of the exchange program or the financial institution. before they can even request proof of address.
This means that a consumer chooses to help a KYC method for each particular platform, meaning that the person who wishes to participate in each exchange would be granted lengthy on-board time and repetitive procedures.
When Blockchain Meets AI
Artificial intelligence systems will soon be updated, improved learning power and even new financial products developed.
The integration of Blockchain and AI is unavoidable since both the data and value are discussed. Blockchain allows for encrypted storage and data sharing or other benefits. AI will evaluate and produce value-generating insights from results.
We can take two (of many) fields into account in order to merge blockchain with AI. Next, we will discuss why we need blockchain technology for the purpose of identity verification. Next, we will discuss use cases of blockchain in identity verification service and then we will conclude our blogpost.
Why Do We Need Blockchain For Identity?
Present identification problems such as Blockchain Identity Management Frameworks may be used
- Insecurity of data
- Identity fraudulent
About 1.1 billion individuals worldwide have no signs of identification and 45 percent of the world’s poorest 20 percent are classified without identity. Comprehensive document authentication procedures, costs, loss of access, and the basic lack of personal identity information are the main obstacles to holding more than one trillion people outside standard recognition schemes.
One cannot study, register for work, get a visa, or access several government facilities without obtaining physical identities. Identity is necessary to navigate the financial infrastructure that is currently in operation. On the other hand, 60 percent of the 2,7 billion unbanked people now own cell phones, opening the way for mobile identification blockchain applications that are best tailored to marginalized individuals.
Insecurity of Data
Actually, we store our most useful ID on consolidated government systems supported by legacy applications that run with many failures. Big, consolidated networks holding the PII of trillion of user accounts are highly enticing to hackers. A new report has shown that the most targeted violation records, which constitute 97% of all infringements in 2018, are personal information.
Despite regulatory regulations and business attempts to enhance cyber protection, an estimated loss of more than 654 billion dollars was disclosed in 2018 of 2.8 billion customer data documents.
The digital landscape view of the consumer is often especially fractured. Users play on various websites with different user identification connections to their usernames. The information generated by one platform on another platform cannot be used in any uniform way.
In addition, it is surprisingly straightforward to construct false identities because of the poor relation between digital and offline identities. Fake identities provide a breeding ground for falsified interactions, which may add to theft and lead to inflation figures and missed earnings. In culture, this weakness makes it possible to develop and distribute horrors such as “fake news,” which poses a potential threat to democracy.
Use Cases Of Blockchain In Identity Verification
In several cases, it is possible to use decentralized and automated identity. Here are some of the most common cases:
Self Sovereign Identity
The idea of a self-sovereign identity verification service is that individuals and enterprises should store records on their own computers, where pieces of information can be exchanged with validators, without having to rely on a central repository of identity data. Such identities may be formed independently of national, corporate, or global organizations.
Monetization of Data
When the world continues to investigate who has user-generated data and who can benefit from them, blockchain autonomous identities and decentralized models monitor consumers and pave the way for data monetization.
The online data we produce is currently intangible, invisible, and dynamic. Application is essential in ownership systems, and SSI facilitates the assigning of your DID online info. People may use their personal data from there for example by leasing them to AI training algorithms or selling their data to advertisement agencies. Users will also have the option of shielding their data from companies or governments.
Portability of Data
The EU GDPR gives consumers a right to portability of data, which is a matter of the data subject’s right, where legally possible, to receive its personal Information directly from the dispatcher. This right will boost customer engagement and reduce the need to re-check their identities across multiple services and channels. It is possible to easily migrate identities, anchored on one objective structure, through DIDs and verifiable credentials. Data portability eliminates interface friction and simplifies the registration process to improve user acceptance.
DID data portability also facilitates interchangeable passwords where customers can easily re-check their own data and adhere to regulatory standards such as Know Your Customer (KYC). This is particularly helpful in minimizing client onboarding time by preventing drop-outs and reducing the costs in the finance industry by stumbling over the difficult identity-checking process, where many records are normally supplied and checked.”
This All Boils Down To…
In an environment in which blockchain technology is evolving rapidly and many blockchain services are developed, solutions that facilitate interoperability between the different systems and services are only praiseworthy. One of these solutions is a robust identity verification system and KYC procedure.
John Murphy has broad experience in writing for the technical field.