World Economic Forum Explores Blockchain-Based Digital ID [Advance Cash ]

Meeting At World Economic Forum

The World Economic Forum (WEF) has opened discussions on the development of an international framework for digital IDs based on blockchain technology.

Conversations were led by the WEF Digital Identity Initiative at the Forum's annual workshop, which was themed "Improving Livelihoods with Digital ID", focusing on Leveraging Registers distributed. Hedera President Brett McDowell joined in the discussion, noting that relying on blockchain provides a higher level of privacy than other systems.

With the use of blockchain, the requirement for an identity provider is eliminated as users maintain metadata of their digital identities on public ledgers while storing personal information in their digital wallets. Personal information stored in digital wallets can be signed by authorized entities with the "cryptographic signature" to verify the authenticity of the information.

“This system allows the user to control when information is shared and with whom it is shared while allowing the sharing of verified personally identifiable information to satisfy Know Your Customer compliance, anti- money laundering or terrorist financing," McDowell said.

McDowell argues that the rise of blockchain-based digital IDs will deliver multiple benefits to economies, with fraud prevention and financial inclusiveness topping the list. According to McDowell, 850 million people do not have access to any official documentation, while large numbers of the world's population are plagued by privacy issues that can be resolved with the help of digital ID.

Despite the benefits, McDowell argued that the development of digital ID faces the challenge of being a relatively new offering and that its underlying technology is seeing rapid innovation given emerging market solutions. He revealed that the WEF would focus on taking "generalizable lessons from the pilots" and applying them "at scale to provide a building block for solutions to global challenges".

Digital IDs are attracting interest from industry players

The founders of Web3 have been tinkering with digital IDs recently, but so far their approach has been patchy, lacking a unified approach. In the Philippines, Twala launched its proprietary Self-Sovereign Identifier (SSI), designed to give users greater control over the use of their private data to prevent incidents of identity theft. With nearly thousands of investors being impersonated, Twala's offering has won praise from DLT enthusiasts for cutting out the middleman in handling user data.

Watch: Blockchain for government data and applications

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