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EU Blockchain Observatory: Digital Identity Is ‘Fundamental Building Block’ For Blockchain’s Potential




A recent study from the European Union blockchain initiative investigates the importance of digital identity and provides recommendations for Europe.

Published earlier this month by the European Union Blockchain Observatory and Forum, an initiative spearheaded by the European Commission, a thematic report titled "Blockchain for Government and Public Services" discusses blockchain's role within European governments. Although there are various government-focused use cases for blockchain, such as patient health records and educational certifications, as the report notes, there are a few prerequisites governments must meet to help make blockchain's potential a reality.

A key requirement, the report's authors maintain, is digital identity. They go so far to say, "[I]t is considered the essential prerequisite for most use cases." The authors continue:

"To be able to truly benefit from the potential of blockchain technology for the provision of services, governments will need to develop digital identity systems that can be used in blockchain-based platforms."

They further argue that the existing paradigm of digital identity is flawed. The internet has no identity system baked in, resulting in identities that are assigned to people by service providers, such as social media, e-commerce, and new sites. Thus, individuals have significantly less control over their digital identities, and their data can become exposed (like through hacks or breaches).

The report's authors acknowledge Europe's General Data Protection Regulation, which is a policy that aims to protect personal data, but they go on to mention the possibility of blockchain fixing the digital identity problem at a more fundamental level. The authors refer to this fix as self-sovereign identity solutions.

Essentially, self-sovereign identity means that individuals maintain their own verified identity information. Within a self-sovereign blockchain framework, the government could, for example, issue digitally signed certificates that attest to the veracity of somebody's personal information, such as their name, address, and birthdate. With blockchain's ostensibly incorruptible and immutable nature, such a self-sovereign model would be able to resist tampering and forgeries that can occur with physical identification documents.

Of course, the report concedes that "getting self-sovereign identity to work on a government level will be a challenge on many fronts." The "most pressing" issue, the authors note, is defining identity standards. Organizations like the Decentralized Identity Foundation, though, are working to develop such a framework.

The report concludes with a few recommendations for Europe to encourage the implementation of blockchain use cases throughout government services. The authors have four key suggestions: setting up an appropriate infrastructure; developing tailored policies and regulations; educating the public, entrepreneurs, and government employees; and having the EU take a leading position on important blockchain projects.

The EU Blockchain Observatory and Forum has published three thematic reports about the state of blockchain in Europe. The first was "Blockchain Innovation in Europe," and the second was "Blockchain and the GDPR." Through its research, the observatory aims to, according to its website, "accelerate blockchain innovation and the development of the blockchain ecosystem within the EU."

Dani Putney

Dani is a full-time writer for ETHNews. He received his bachelor's degree in English writing from the University of Nevada, Reno, where he also studied journalism and queer theory. In his free time, he writes poetry, plays the piano, and fangirls over fictional characters. He lives with his partner, three dogs, and two cats in the middle of nowhere, Nevada.

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