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Role of Blockchain-based Digital Identity in Smart Cities

Photo by Hitesh Choudhary on Unsplash

Ever since the dawn of civilization, we have been faced with the vital need to manage the lifecycle of human needs. These basic human needs are food, hygiene, waste disposal, clean air, medicine, transport, and work. Fast-forward to 21stCentury, and with the rise in human population, these resources are becoming increasingly scarce. As a result, people are migrating to urban areas to meet these needs. It is becoming more difficult to provide these services which results in the need for urban areas to become smart cities.

Smart cities promise to connect humans with the many infrastructure programs a city provides to manage the lifecycle of human needs. However, in order for a person to obtain access to these programs, they need to show identification. This identification allows citizens to prove they are the person they claim to be. Due to socio-economic conditions, it becomes difficult to provide proof; and keeping identification private and personal is of the utmost importance.

Smart cities are made up of Internet of Things (IoTs) and Big Data, both of these are considered incompatible with keeping identities private. Data is considered the Blood of the Smart City. It is being hailed as the “new oil” or “like gold”. Data used in a smart city context reflects humans and their behavior. By 2022, the market value for smart cities are expected to be around $1.2 trillion. This translates to a rush of companies interested in pursuing that expected growth by building smart products that enable the smart city. With the good comes the bad. A result of this growth increases the risk of data breaches that expose personal information.

Because data can define a person, technologies to accurately determine all aspects of users and certify their basics attributes, such as name, address, credit record, and other personal characteristics like health status have been developed many times. Passwords are the most-commonly-used way to verify identity on digital applications. What if cities want to ensure that the citizens accessing their apps are who they say they are?

That is why Digital Identity has become significantly more important in this area and is becoming a crucial security measure in this interconnected environment. As identity becomes the backbone of digital transactions, digital identity has the potential to become the literal backbone of a smart city. As the digital equivalent of you, your digital identity data can open up smart transactions and tasks.

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There are already signs that certain government identification forms, such as driver’s licenses, are going digital. In 2016, Idaho, Colorado, Maryland, and Washington, D.C. launched a test to secure digital driver’s licenses. In 2017, Wyoming launched the same test.

Internationally, several nations are experimenting with national identification systems. A decade ago, India launched Aadhaar Card, with the single goal to digitize residents’ identities to help them access government services, and to encourage the nation’s demonetization effort. China now requires citizens to apply for a digital identification at age 16 which grants them access to various services, including driver’s licenses and bank accounts.

The introduction of Blockchain-based identity mechanisms may offer an interesting solution to security problems. The use of so-called self-sovereign ID, a form of identification that is unalterable and almost completely secure, could change the way individuals use and access their identities and sensitive data online.

Zug, a city in Switzerland, is hoping to do this with the help of partners like SuisseID. Citizens would register their identity via an app, which is then verified by the city. This digital ID would act as a single electronic passport of sorts. As such, citizens could securely access apps and e-services to pay fees, vote online, and offer proof of residency. Estonia has already launched digital identity based on Blockchain. In addition to the inherent security benefits, Blockchain’s self-sovereign ID shows potential as a tool that could drive substantial innovation across several sectors. The self-sovereign ID is a digital identification - much like an offline solution, such as a driver’s license or passport. Users can present this identification online, without requiring passwords or other verification, to certify their identity.

With Blockchain’s open ledger and smart contracts, you could have a secure way of proving that you are who you are on the internet, while controlling who gets access to your identification information and how it can be used.

Using Blockchain-based identity, a user can prove residency, age, and identity that are backed by a trusted authority. Blockchain makes tracking and managing digital identities irrefutable, and secure, by using digital signatures based on public-key cryptography; instead vulnerable password-based systems.

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Most importantly, this digital identification could collect all the small bits of a user’s identity online, such as Social Security information, medical records, social media credentials, and uses a single key that is stored on the Blockchain ledger. This enables users to keep their information private simply by sharing a public key generated on the ledger that can verify their identity. For pure identification reasons, a self-sovereign identification could quickly replace the documents people use daily, such as driver’s licenses, passports, Social Security cards, medical insurance cards, and so on with a single key that can be matched against an immutable ledger. Because of these reasons, Blockchain-based digital identity is also known as Smart Identity.

Smart cities require smart identity to power how the cities operate. It is imperative that we start building these smart identifiers now, with smart use-cases in mind. We can no longer create static, hard-coded architectures for our Identity and Access Management (IAM) infrastructure. 21st-century digital identity must be able to interact across smart infrastructures and manage the use of our data to ensure that "smart" does not also mean loss of privacy.

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