Blockchain technology can be leveraged to create secure and decentralised digital identity solutions in several key ways. This was the main panel discussion at the recent Technology of Tomorrow Conference in Warsaw, Poland.

The panel included:

• Magdalena Orzechowska, Ecosystem Developer at Lodz Special Economic Zone;
• Jacek Figula, Chief Commercial Officer at Billon Group;
• Christine Leong, Chief Information Officer of nChain;
• Michal Lakomski, Mayor’s Smart City Proxy of the City of Poznan.

The power of permissioned systems

For Jacek Figula, the procurers of digital identities are governments, as trusted entities, who are authorised to provide identity. The new media around digital identities are therefore only an extension of existing structures and processes.

Governments issue certificates at birth, which can be attached to digital identity in the future. Digital identity can be used across various applications and sectors, providing seamless access to services without compromising privacy – a point the discussion returned to later.

Permissioned systems require specific authorisation to write data into a ledger, ensuring control over what is being written. However, the ledger itself is open, allowing anyone to read and validate the written data, especially the identity of the person or entity associated with it. This approach is essential for ensuring trust and integrity in digital identity solutions.

Enhancing digital identity ecosystem with IoT devices

For Christine Leong, a very important use case of digital identities is the digital economy, especially when it comes to IoT devices, which can automatically handle transactions, purchases, orders etc. She emphasises the importance of incorporating IoT devices into the digital identity ecosystem.

Devices such as fridges, cars, and more are increasingly making decisions on our behalf, and it becomes crucial to link their identities to the individuals or entities accountable for them. This ensures the authenticity and accountability of transactions involving these devices, as Leong points out.

IoT devices play a vital role in validating information in the supply chain and other applications. For instance, by integrating IoT devices with digital identity systems, data can be verified and trusted, thus preventing fraudulent activities and ensuring data accuracy.

Poznan’s digital identity solution

Michal Lakomski shares their successful use case in Poznan, where they developed a digital identity solution to support citizens with different benefits based on their tax payments. By automatically reading tax documents using OCR (Optical Character Recognition) technology, citizens’ identities are verified to determine eligibility for specific benefits.

The implementation took two years, considering legal, compliance, and cybersecurity aspects. The system’s architecture aimed to connect various services with a single digital identity, simplifying access to benefits and services for citizens.

The road ahead for digital identity adoption

The discussion also revolved around the state of adoption regarding digital identities. In Europe, the European Blockchain Services Infrastructure is aiming to build a pan-European blockchain infrastructure to connect various identity registries. As Figula mentions, the project involves 28 countries and aims to connect multiple identity registries and create a system to exchange billions of records while maintaining individual identity privacy.

The Billon Group is focused on building a highly scalable and performance-oriented system to connect various organisations, countries, and sectors and provide identity knowledge about individuals to authorities and other public entities. Figula also highlights how the Polish government and eventually all European governments will provide identity information through QR codes free of charge, leading to a significant advancement in the adoption of digital services.

Leong underlines Figula’s points and remarks that Europe is leading the way in the adoption of digital identities. However, she also mentions how similar approaches are being tested and implemented between Canada and the United Kingdom for border crossings or in South East Asia, as in the EU.

The Challenges and Ethics of Digital Identity Solutions

Christine Leong also underscored the significance of ethics in the development of digital identity systems. She emphasised the need for transparency, considering long-term implications, and implementing redress mechanisms as essential ethical considerations. Her advice is to advance slowly and carefully and to develop everything in line with existing regulations.

One major concern was the complexity of cybersecurity and privacy. The consensus was that blockchain, especially in the form of the BSV blockchain, is an inherently safe technology. Figula emphasised that while blockchain itself may not provide inherent cybersecurity protection, using zero-knowledge proofs can safeguard sensitive data stored on the blockchain.

Zero-knowledge proofs ensure that data can be verified without exposing the actual data, making it difficult for attackers to target specific records. Additionally, the distributed nature of blockchain adds to its security by making it challenging to find and tamper with records.