At the recent Blockchain Africa conference in Johannesburg, Investec, in collaboration with BankservAfrica and uPort, demonstrated a digital identity system anchored in the Ethereum blockchain. The initiative was born in the digital identity working group of the SA Financial Blockchain Consortium (SAFBC).
The identity system enabled each conference attendee to create an individual identity by simply downloading an uPort application on his/her mobile device. The attendee could then move between vendor stands and ‘check in’ by scanning a QR code. Each vendor would confirm the attendee’s visit by automatically issuing them an attendance credential and associating it with the specific attendee’s identity profile. As an incentive, the attendee would unlock a reward after completing a certain number of check-ins at different vendors.
Graham Nelson, Investec’s blockchain engineer comments, “Through the Ethereum blockchain, our prototype allows individuals to register a universal, re-usable and encrypted identity. This identity has no restrictions on who or what can integrate with it, so it has many other applications and can be enhanced by any other entities the user has a relationship with.”
This is comparable to a Facebook account, where a user can give other entities approval, with one click of a mouse, to integrate with his/her Facebook login and then access personal information, such as name, friend lists and contact information. Gary de Beer, BankservAfrica’s blockchain engineer explains, “The big differentiator of Investec and BankservAfrica’s prototype is that the user has full ownership of his/her identity and can decide who can access this information. As the data is encrypted, it prevents entities from selling a user’s personal data to other third parties without permission. It makes large scale data hacks a thing of the past.”
As the Ethereum blockchain anchors each individual identity, other individuals or entities can ‘attest’ to specific information to enhance an identity. “For example, once John Doe has an identity, Investec can attest that he has a Private Bank Account, pays his salary into this account, has a home loan, etc. Similarly, the Department of Home Affairs could attest that John Doe has an official identity and passport number,” Nelson explains. There are no limitations – any entity can attest any information.
Chris Becker, Investec’s blockchain specialist, says that the possibilities are endless. “A single identity can be used globally, which means greater simplicity for the user. As he/she is in full control of his/her encrypted profile and who can access this information, no one can share personal information without explicit consent. In future, users might even be paid by entities for access to personal information. Also, there will be no need to send copies of identity documents or other personal details over unsecured internet connections. This improved security will minimise the risk of identity fraud significantly.”
For financial institutions, a blockchain-based identity system could improve efficiency and greatly reduce the friction (eg FICA requirements) and costs of client onboarding. Becker concludes, “If this universal, re-usable identity system went mainstream, it would minimise our clients’ and the South African public’s digital footprints. For us and our colleagues at the SAFBC, any innovation that improves trust and security in the financial system is worth exploring.”