Identity without the Blockchain? Skepticism Grows for Once-Hot Use Case

A rising tide of skeptics is arguing that identity might not be the blockchain use case it's often cracked up to be.

For much of 2016 and 2017, the general consensus has been that by distributing a ledger that can validate identifying information, users themselves can determine who accesses their data and what others can see. In theory, those users would own their own identities, as opposed to Facebook, Google, the government, or any number of organizations, all of whom want to keep a record of – and profit from – that data.

But that doesn't mean those seeking solutions are sold on the technology.

To look deeper into question of how to improve the way the world's citizens prove who they are, non-profit ID2020 launched the ID2020 Alliance earlier this week, with founding members including Microsoft and Accenture.

Backed by a $1m donation from Accenture and a $275m donation from the Rockefeller Center, the alliance is seeking new ways to improve identity, regardless of the technology ultimately employed.

And it's entirely possible that blockchain itself may not be that solution, or that there maybe no permanent solution at all, according to ID2020 executive director Dakota Gruener.

In conversation with CoinDesk, though, Gruener elaborated on the importance of ensuring that "there's a seat at the table for folks who have a blockchain perspective".

She said:

"There is a world where there is no technology that can do what we need to do, or it doesn't exist yet. But we still think that bringing everyone together around this communal table is the only way we're going to find something that could work."

Future members in the "formal" effort to move identities away from centralized authorities are expected to include both for-profit and non-profit organizations. The alliance is being modeled after global organisation Gavi, a public-private initiative that provides vaccinations to children.

"The opportunities to improve the lives of billions of people don't come around every day," said Gruener. "And this is a real opportunity to do something tremendously impactful with technology that's in our hands."

Business shift

With billions of dollars at stake in the possible transition from centralized identities to decentralized alternatives, the space the alliance will navigate is in all likelihood going to be complicated.

Even so, ID2020 board director Oliver Bussmann thinks the group has the advantage that decentralization will be a "fundamental design principle" of all digital identities going forward, regardless of the money being made in the current system.

"We see in general a change in business model moving in a decentralized direction," he told CoinDesk.

The hope is that companies' potential business losses from proving identities in the developed world can be offset by giving more of the 1.5 billion people currently without legal identities access to the economy.

"It's not that we want these companies selling identity – that's very much not what we're advocating for," said Gruener, who added:

"But if they can then bring a billion new customers in the fold they can build services and what not on top of it and that’s a win for their business."