Blockchain and Decentralized Identity – Digital Identity 2.0

Blockchain - Reactive Space

Identity is an important part of our life. In this digital era, as more identities get online, there is a growing focus on secure identity management systems. Now that blockchain is disrupting several industries, it’s time we use this revolutionary tech to provide unified, tamper proof and interoperable decentralized identity solutions. Blockchain and digital identity are a great deal. All over the world, a huge number of organizations are exploring promising technology like blockchain to help address identity issues and treat us with a secure digital identity system. Keep reading to know more about “Blockchain and Decentralized Identity”.


After a detailed research and survey, Reactive Space has gathered the wonders of blockchain in digital identity, we are sure this info will shock you!


Issues in Current Identity Management Systems:


No Proof of Identity

The World Bank’s 2018 ID for development report published that approximately 1.1 billion people are unable to prove their identity. Despite existing actions, underdeveloped nations struggle the most in delivering efficient identity management systems due to several reasons such as inaccessibility, paperwork processes, and complicated identification. Without proof of existence, an individual cannot have access to basic needs, a job, education, and employment.


Data Theft

Our sensitive identity information is currently being stored on Government databases backed by single points of failure. Traditional Identity management systems are highly vulnerable to hackers and identity thieves. According to research, personally identifiable information is comprised 97% of all data beaches. In spite of, regulatory legislation and business efforts to grow cybersecurity, 2.8 billion consumer data records were exposed by cyber-attackers. Another study from Juniper Research revealed that cybercriminals will steal an estimated 33 billion records by 2023.


 Identity Fraud

User Identity network is extremely fragmented and vulnerable. Users tend to share their data online on various social accounts. These platforms don’t have a secure management system to manage our information. Moreover, the unsafe connection between digital and real identities makes it incredibly appealing for cybercriminals to create fake ids. Fake identities lay the groundwork for lost revenue and increased fraud rate.


Identity Verification

Username and password method to log in is flawed; business needs to seriously start considering blockchain based identity management systems. 7 out of 10 people don’t trust passwords to protect their identity. According to a Google report, 3.3 billion credentials were stolen due to third party breaches and 12 million were stolen through phishing. In simple words, the system is damaged.


Reactive Space expertise in digital identity technologies have led to us to develop innovative blockchain solutions, tailored to business needs. Check them out here.


Use Cases of Blockchain in Digital Identity – How can Blockchain help?


Blockchain can power the framework of identity management systems. It provides a secure infrastructure and a robust framework for enterprise blockchain solutions.

Listed below are four use cases of blockchain in digital identity.


Self- Sovereign Identity

Self- sovereign identity is an idea where people have full control over their data. They can store their information on their own devices privately. They can decide who, when, and how their information is shared without the interference of any central authority. These identities can be created without depending upon nations, states, and organizations.


For instance, if someone owns a self- sovereign identity he/she has power over who accesses their information. They can manage and prove their identity themselves.

The most suitable technology to implement Self-Sovereign Identity is blockchain as it ensures no third party is involved.


Data Monetization

Blockchain-based models and systems pave the way towards data monetization.

Data Monetization indicates the usage of personal data for quantifiable economic benefits. According to IDC report, 175 zettabytes of data will be generated each day worldwide by 2025. By 2020, there will be 40x more bytes of data than there are stars in the observable universe.


These estimations show that personal data will continue to increase in value. Presently, the digital data we create is non-transparent and complicated. Acknowledgment is crucial in the ownership processes and SSI makes it possible to assign online data to DID. Users also have the advantage to protect their data from organizations and corporations.


Organizations can monetize the value of their data to boost revenue. Blockchain is a major ingredient in data monetization due to its advanced benefits and decentralized features.




Banking industry encounters several issues related to identities such as fake identifications, repeated KYC protocols, and fraud.

If the banking sector adopts a decentralized digital identity, then most of its issues will get solved. For instance, if you want to open a bank account, you can allow the bank to view your decentralized identity for verification.

Blockchain in Banking



Online shopping demands proper identification to prevent scams. Despite anti-fraud mechanisms in eCommerce, this industry deals with several fraud issues. This occurs due to the lack of a proper decentralized system when a user checks out from an online store. A blockchain-based digital identity platform can guarantee the proper verification needed for protecting this sector.




Our world is experiencing an immense digital transformation. Hence, it is obvious that we need improved methods to manage digital identities. These ways should be rich in security and privacy because of our identity matters. Blockchain can strongly help us in this regard as it offers full ownership over your identity.  


We don’t need a crystal ball to predict the huge number of blockchain-powered digital identity solutions in the future.


If you wish to transform your digital identity through a streamlined blockchain solution, feel free to discuss your idea with the Reactive Space team and together, we can take your business to the next level.

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