Electronic IDs or national ID cards are issued by various countries around the world at present. These cards are secure and possess many security features that thwart duplication or tampering attempts. However, with the advent of blockchain technology, several improvements can be made to this process.
Digital identity is not only limited to just government-issued ID cards; it is a concept that applies to online social networks and forums too. There can be multiple identities used for different purposes. A blockchain-based online digital identity allows control over personal information sharing. Users can see who used their data and for what purpose and can control access to it. This is not possible with the current infrastructures which are centrally controlled. The key benefit is that a single identity issued by the government can be used easily and in a transparent manner for multiple services via a single government blockchain. In this case, the blockchain serves as a platform where a government is providing various services such as pensions, taxation, or benefits and a single ID is being used for accessing all these services. Blockchain, in this case, provides a permanent record of every change and transaction made by a digital ID, thus ensuring integrity and transparency of the system. Also, citizens can notarize birth certificates, marriages, deeds, and many other documents on the blockchain tied with their digital ID as a proof of existence.
Currently, there are successful implementations of identity schemes in various countries that work well, and there is an argument that perhaps blockchain is not required in identity management systems. Although there are several benefits such as privacy and control over the usage of identity information due to the current immaturity of blockchain technology, perhaps it is not ready for use in real-world identity systems. However, research is being carried out by various governments to explore the usage of blockchain for identity management.
Moreover, laws such as the right to be forgotten can be quite difficult to incorporate into blockchain due to its immutable nature.