Also read: Verification Procedures Ruin Online Shopping Experience, Blockchain-Based Solution To The Rescue?
Trusting Third Parties With ID Verification Is A Bad Idea
But there is a certain drawback to most of the features and platforms consumers use on a daily basis: they all need some form of verification or registration before they can be used properly. One thing that has become clear is that using just a username and password to access any service is far from sufficient these days.
Two-factor authentication is an additional step in the right direction of providing customer security, but that only protects the login part of the experience. The major problem lies with the services that require users to submit some form of verification to confirm their identity, both in the Bitcoin space and outside of the realm of digital currency platforms.
Consumers are forced to submit documents – such as an ID scan, copy of passport and even a copy of a credit card – to third party services for verification purposes. All of these documents are then stored on centralized servers, where they become a favorable target for hackers and hoodlums. For the end consumer, Identity theft is a serious problem, especially since the Internet became more and more popular.
Luckily for all parties involved, there is a solution around the corner that could solve all of the above problems while still ensuring security for both business and customers alike. Issuing identity verification through blockchain technology allows consumers to verify their identity while there is no centralized storage of identity documents involved.
Blockchain-Issued ID Verification Has Lots of Potential
In terms of using this token, the user would send that token to the service or company they are using and sign off on the transfer with their private key. Doing so would allow the customer to keep the information confidential, rather than relying on a third-party service or platform to store that data. All of the information associated with that token would only be visible for the sender and intended recipient.
To provide an additional layer of security, an oracle or escrow-type service could be implemented, where a computer verifies the customer’s identity by getting access to the ID token. Once the identity has been checked, that token is then sent back to the owner, and the business or platform is notified of a successful user verification procedure.
In a way, blockchain-based verification would bypass the need for centralized services, additional storage capacity and it could even remove the human element from the verification procedure altogether. However, there is still a lot of research to be done on how this solution could be tackled in a secure manner for all parties.
What are your thoughts on using blockchain technology for verification procedures? Let us know in the comments below!
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