Blockchain’s first revolutionary product: Online ID
We have seen the emergence of blockchain technology in the form of bitcoin, ethereum and other such cryptocurrencies. The potential of this encrypted, decentralized, online ledger system is limitless. If we compare bitcoin with the pre-existing centralized financial system, the middleman is removed entirely from the picture when it comes to conducting transactions. Therefore no need to pay any transaction fees. In addition, once the transactions are in the ledger, they cannot be hacked and are unchangeable. This is, however, only the beginning. Blockchain technology can certainly bring much more significant breakthroughs in the information technology field.
But this system, too, has certain complexities. This system is not as quick as the already existing centralized financial system. Regulations have also proved to be an issue for blockchain technology. Two people in the blockchain system who are conducting transactions between each other are completely anonymous. In the case of money laundering and sending money to the wrong address can prove to be a major issue because you can’t get your money back. We can certainly conclude that the blockchain-based payment system is very easy, except for the regulations and policies.
Weakness in the payment system: anonymity
According to PayPal’s chief executive, Dan Schulman, the weakness of this payment system lies in the fact that the transactions made are anonymous. Most of the cybercrimes are the result of talking or communicating with someone, we don’t know much about. If the encryption of our online identities in the blockchain would have been done then, it can completely overcome the problem of transactions in this decentralized system.
The research to implement an online ID has already started in several places. For example, if we take the UK, the government of the UK has started interacting and communicating with its citizens through online mediums. The Government of the UK is offering taxation services, different types of benefits and other such services through online portals. But it is also facing significant challenges because the citizens don’t possess any online identification. Therefore nearly 50 billion worth of British pounds is getting stolen every year. And the government is looking at blockchain technology for potential solutions.
Australia is also exploring blockchain technology; recently, voters in South Australia identified themselves through blockchain technology while conducting a minor council referendum.
The corporate world is also not holding back when it comes to conducting research on blockchain technology. IBM is right now trying out a blockchain technology-based online ID project named IBM verify credentials aimed for both the public and private use. Microsoft is also developing an online identification system on their well known and already established Azure cloud computing platform. Other companies are not holding back because online ID has the potential to become the next best technological advancement.