Why you need a decentralised identity

We have all been warned about identity theft. Even the big banks like Barclays are running TV ad campaigns showing customers how a phone call that seems to legitimately come from your bank can be used to steal your online banking pin number. There is plenty of information out there about how to keep your details safe, but no matter what precautions we take, there are always bad actors out there (this is now a ‘polite’ way of referring to people who are nothing more than criminals) who are relentless in their search for new ways to access our private information.

Tomislav Markovski, writing on Medium tells a story about how he nearly became the victim of bank fraud when he rented a property. After providing every possible kind of document to the real estate agent, including bank statements and investment portfolio details, he received a call from his bank a few days after he had moved in saying that someone wanted to cash a large check drawn on his account. Markovski knew he didn’t have that much money in is account, but the bank then told him that “he” had made a transfer from his savings account by phone. Of course, he’d made no such call, and thanks to his bank calling when they did, the theft was stopped. But, as he says, it was a “masterfully crafted plan that involved just four key steps”

1. Call the bank pretending to be Markovski

2. Change his phone number (to confirm large withdrawal)

3. Transfer all his savings into his current account

4. Have a fake cheque made and present it to the bank for withdrawal

They were able to do this because they had access to all the necessary information on him, including his social security number. They couldn’t catch the scammer, but it made Markovski think about why so much information was required to rent an apartment and why are we still relying on physical documents.

Blockchain has a solution — decentralised identity

Blockchain technology is opening up a range of possibilities to prevent this kind of crime and decentralised identity could be the way forward. As Markovski says, decentralised identity is “publicly discoverable identity information.” It uses blockchain technology to provide tamper-evident information about an entity or a subject and “allows a model of truth to be established between parties that rely on communication and exchange of data.”

There are already a few platforms working on this, including Civic, uPort and Sovrin. As Markovski says: “Decentralized identity platforms will change the current broken identity system that relies on numerous online services requiring us to remember passwords for each of them. They can help us protect our personal information and allow us to control how this data is shared.”

Until these platforms gain mass adoption — be careful out there!

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