Blockchain for Authentication — Benefits, and Challenges

With the increased cases of identity theft and data leaks all around the world, authentication is a major concern. Authentication as to the person accessing the data is actually the one who they claim to be.

We may have faced it or heard of the ugly experience that identity theft causes. Imagine someone using your credit card to make heavy purchases, but it wasn’t you, and it creates a whole mess of convincing the credit card companies about the fraud, asking them to change all your cards and even disputing the charges.

Or someone calls your cell phone provider with your personal information to commit a SIM porting hack in order to access all of your text messages. The access to your personal text messages is the gateway to many online services as we use it for two-factor authentication like one time passwords.

The risk we face while managing our digital identity is if the personal systems are compromised. In the real world, we update our proof of identities every few years. When someone checks a proof of who we are, they immediately forget the details. If anyone wanted to compromise your ID, they will not go from person to person who has seen your proof identity at some point of time rather they have to find you personally and steal the information from your wallet or phone to gather information about you.

So how can we protect ourselves from such threats of insecurity that someone can physically steal our information? The answer is blockchain technology.


The use of blockchain technology is at a very early stage right now, but it is increasing at a rapid pace. The blockchain is useful in many sectors like retail, banking, voting, insurance etc. One such aspect is the use of blockchain as an authentication provider.

What if you can prove that you are the exact same person you are claiming to be with just one digital identity using the blockchain technology? Wouldn’t it be convenient to authenticate yourself with such ease for services at banks, government offices, airports or wherever you need to provide a proof of identity?

Blockchain uses the key-pair for the users to register their identity. The personal information is stored in form of hashes which can be used for several identity-related attributes like name, unique identity number or social security number, finger-print or other biometric information.

After that, the user can request a recognized party to verify the hashes by authenticating that the information provided on the blockchain is true. So now whenever someone requires user’s identity for any kind of authentication or identification mechanism, they can use the hashes of the block pre-verified by the trusted recognized party.


However, the challenge in such a case is that it involves a high level of trust between the parties. Another challenge that authentication of identity by blockchain faces is the involvement of different independent participants to calculate the blockchain to make it trustworthy and decentralized.

In the case of bitcoin, such participation is rewarded by getting paid a small amount of bitcoin for providing the next block in the chain. How this can be implemented in a blockchain which solely performs authentication is yet to be seen.


There will still be the chances that users can their identity but that will only be limited to losing their phone, a secure flash drive or other data carrier holding their private key portion of the registered identity on the blockchain. In such case, a user will not be able to request for a new identity or report the old one as lost/stolen because there is no central entity that controls the identities in the blockchain.

If the above-mentioned challenges can be tackled in the nearest future, blockchain could be the next big thing in the world for authentication. One digital identity for all the services around the world enabled with the highest level of security, power, and support of the blockchain.



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