3 Reasons to Use Blockchain for Storing Your Digital Identity

computer laptop screen with lines of digital text

Every video you watch on YouTube gives Google a little bit more information on who you are and what you like. Every post you like on Instagram does the same for Facebook, as does every tweet you share for Twitter. We're fooled into thinking these social media platforms are free, but the data we provide to them fuels a massive surveillance system that generates billions of dollars in profit every year.1 

All of the above social media platforms sell your data to advertisers. Some do it in more opaque ways than others. For example, contrary to popular opinion, Facebook doesn't sell the data that can identify exactly who you are. Instead, it sells access to you.2 Facebook gives advertisers just enough information so they know what you like and can show you personalized ads. Twitter, on the other hand, sells all the info they have about you. End of story.

Why This Matters

You might think, "So what? I have nothing to hide and I don't mind sharing my personal information in exchange for personalized ads. If anything, I'm grateful when an ad informs me there's 50 percent off on the plaid shirts I've been wanting to buy. That's much more useful to me than an ad that doesn't interest me at all."

That's a fair point. But the problem with selling your personal information isn't that advertisers use it to personalize their ads to you. The problem is where that information gets stored. We've always been told to never put all our eggs in one basket, but companies that gather personally identifiable information (PII) store all their data in one or only a few giant databases. They're single points of failure that are juicy targets for hackers.

It's how Cambridge Analytica could steal the information of 87 million Facebook users that eventually helped elect Donald Trump.3 It's how hackers gained access to the names, home addresses, phone numbers, dates of birth, social security numbers and driver's license numbers of 148 million Americans through Equifax.4 It's how spam operator River City Media leaked the email, IP and physical addresses of 1.37 billion people.5 

It need not be this way. Blockchain technology can solve the problem of insecure PII scattered in vulnerable databases. It can give people control over their digital identities. Here are three reasons why that's a good idea.

Use Cases for Storing Identity on a Blockchain

In its simplest form, a blockchain is a series of time-stamped blocks of information linked one after the other. These blocks are created—mined, in blockchain terminology—by a cluster of computers. No single entity has control over the blockchain. It is decentralized, immutable and entirely transparent.

Because of its tamper-proof nature, it is much safer to store valuable information on a blockchain than it is to trust any company with it. This is true not only for PII, which identifies a person but also for information that identifies anything else.

Secure Information Stored on the Internet of Things (IoT) Devices

For example, blockchain technology could be used to secure the information on IoT devices in your house. This would stop hackers from threatening to kidnap your baby because they hacked the baby monitor connected to the Wi-Fi (a true story).6 

Give People an Identity (as Well as Control over It)

Secondly, blockchain technology can give people control over their digital identity, but it can also give people an identity in the first place. More than 1 billion people have no tangible proof of their identity. This means that, among other things, they can't vote, can't open a bank account, can't find legitimate work and can't own property.7 

While these people might not have proof of identity, many of them own a mobile phone. A blockchain-based mobile platform could be an easy way to give them an identity without having to go through complex and often expensive paperwork processes. This would spur economic growth and greatly improve the quality of their lives.

Store Medical Records

Thirdly, people could store their medical records on a blockchain. They would have full control over that sensitive information, and they could decide where and whom to share it with. Instead of medical information being stored in siloed databases, medical professionals with the appropriate access could have a complete health record of their patients. This would better inform their choices and reduce medical errors.

These are three big reasons why your digital identity is best stored on a blockchain, but there are many more. Digital identities on a blockchain can help you earn money for your data, make it harder to create fake profiles, reduce voter fraud and more.

Challenges of Storing Identity on the Blockchain

The idea of storing identity on a blockchain is gaining traction. Many companies are now developing blockchain platforms for identity management. There's the Sovrin Foundation,8 Civic,9 IBM Verify Credentials10 and Microsoft's decentralized identity.11 Even the European Union wants in on the action.12 

Perhaps ironically, this is somewhat of a problem. The proliferation of these platforms goes against the idea of a universal digital identity. If you need to prove your identity with the information you stored on Sovrin's blockchain first, then need to switch to Civic's blockchain, then IBM's blockchain, then we clearly still live in a world where our digital identity is scattered across different silos of information.

It's a better world in the sense that the data is more secure on a blockchain, but we ideally want to move to a world where we can use one blockchain platform for all our needs.

Additionally, not all these platforms might be entirely decentralized. Depending on a blockchain's consensus mechanism, it can be set up in such a way that it's controlled by only a few entities. If those entities are controlled by one company, then we're back at square one.

There's no point in a blockchain where 10 IBM computers mine all the blocks. A truly decentralized blockchain should have no single group to exercise an inordinate amount of power.

The Future of Blockchain Security

Despite these challenges, the benefits of storing your identity on a blockchain far outweigh the drawbacks of how we currently manage our digital identity. We can move from a world where our valuable information is stored in hundreds, if not thousands, of insecure databases to a world where all our information is stored on a secure blockchain that we have full control over. This latter is the world we should create as the digital and the real continue to merge and intertwine.



  1. Retrieved on May 11, 2020, from nytimes.com/2019/01/30/technology/facebook-earnings-revenue-profit.html
  2. Retrieved on May 11, 2020, from facebook.com/help/152637448140583
  3. Retrieved on May 11, 2020, from theguardian.com/technology/2018/apr/08/facebook-to-contact-the-87-million-users-affected-by-data-breach
  4. Retrieved on May 11, 2020, from npr.org/sections/thetwo-way/2018/03/01/589854759/equifax-says-2-4-million-more-people-were-impacted-by-huge-2017-breach
  5. Retrieved on May 11, 2020, from theguardian.com/technology/2017/mar/06/email-addresses-spam-leak-river-city-media
  6. Retrieved on May 11, 2020, from nordvpn.com/blog/baby-monitor-iot-hacking/
  7. Retrieved on May 11, 2020, from blogs.worldbank.org/voices/global-identification-challenge-who-are-1-billion-people-without-proof-identity
  8. Retrieved on May 11, 2020, from sovrin.org
  9. Retrieved on May 11, 2020, from civic.com
  10. Retrieved on May 11, 2020, from docs.info.verify-creds.com/learn/ibm_assets/
  11. Retrieved on May 11, 2020, from microsoft.com/en/security/business/identity/own-your-identity?market=af
  12. Retrieved on May 11, 2020, from ec.europa.eu/futurium/en/system/files/ged/eidas_supported_ssi_may_2019_0.pdf

Similar Blog Articles