Blockchain for Decentralized Identity — The Public Sector

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3 Jul 2022

Decentralized Identity has an enormous opportunity in the Public sector for governments (see below for global projects underway). According to Liminal, the Total Addressable Market (TAM) for SSI (Self-sovereign Identity) in 2022 is $32.8 B, growing at a 68.9% CAGR to $266.5B by 202711. The public sector will initially dominate the market, but private sector SSI will account for 60% of the market by 2027. A partnership between the public and private sectors will drive this growth. For example, the government and its departments can have a permissioned blockchain accessible to stewards and authorized personnel.

Furthermore, these have the potential to be highly governed and regulated. We start with credentials issued by some controlled government departments in most cases. The credential and its claims get used in various Identity verification business processes across the public and private sectors.

For example, a government agency issues passports and driver’s licenses used for verification in various private sectors to travel or drive a car. In addition, citizens with their verifiable credentials use a central portal to access services provided by the government. It eliminates the entry and verification of various forms. Thus, it is much more efficient with fewer errors. As seen in the examples below, progress in the public sector triggered by Covid-19 is underway in some countries with government help.

Governments can also use it to track legal documents, such as keeping records of deeds for properties, taxes, and welfare payouts to citizens. Blockcerts7 is an open standard for building apps that issue and verify blockchain-based official records. These may include certificates for civic records, academic credentials, professional licenses, and more. It ensures the interoperability of these official records.

Some countries have adopted implementing Digital Identity with government-sponsored projects. Others have taken a hybrid approach with contributions from the private sector. As a result, the public and private sectors are automating the verification of credentials within business processes with greater security and privacy.

Here is an incomplete list of some ongoing efforts:

Note: Some on this list are not yet implementing all SSI principles. Canada and the EU are advanced.

EBSI (European Blockchain Services Infrastructure) is a partnership with the EU Commission and the EU Blockchain Partnership (EBP)8. Its mission is to use blockchain to accelerate cross-border services for the public and private sectors. Starting in 2020, the EBSI has deployed blockchain nodes across the EU to verify credentials for applications. In addition, it has put blockchain technology for public departments to verify identity information, thereby building trust in services. All the 27 EU countries and Norway and Liechtenstein support EBSI. More on EU in an upcoming blog.

The UK Government, after consultation with the Department for Culture and Media (DCMS), unveiled a plan with new legislation to introduce digital identities in physical documents for passports and driver’s licenses. In addition, an Office for Digital Identities and Attributes (ODIA) will provide adequate governance over companies handling digital identities9.

With over a billion people, India worked to digitize and store over 560 different documents, which included government-issued identity cards in a DigiLocker app. At this writing, over 100 million users have adopted it. Some records include a driver’s license, education certificate, and a government ID card. With APIs, DigiLocker saves these documents, which insurers, financial services, etc., accept to complete business processes to provide a service10.
We use government-issued documents linked to a person’s identity during elections. If implemented right, SSI can reduce voter fraud and make the system more efficient and cost-effective.

The implementation of SSI by governments will have a flywheel effect on the private sector (see upcoming blogs for examples). Automation of processes that require credentials will take on a new meaning with numerous possibilities. The creation of the International Association of Trusted Blockchain Applications (NATBA), a multistakeholder organization to promote trust and interoperability globally, has already triggered the phenomenon.

I will cover the Social Impact of SSI in the next post. To reference previous posts refer to this link. Again, I would suggest reading the posts in succession.

References

1. https://diacc.ca/trust-framework/pctf-overview/
2. https://essif-lab.eu/
3. 2022, Digital Transformation Agency; Digital Identity in response to Covid-19; DGX Digital Identity Working Group; Digital Gov Exchange
4. 2022 Feb. 18, Kate Gorien Implementing the Swiss SSI Ecosystem — Two streams Approach
5. ENISA Report, Digital Identity — Leveraging the SSI Concept to Build Trust
6. SSI Meetup Introducing the SSI eIDAS Legal Report — Ignacio Alamillo
7. https://www.blockcerts.org/
8. https://ec.europa.eu
9. UK gov unveils plan for nationwide digital identity scheme, IT Pro; Connor Jones, 11 March 2022
10. DigiLocker, India’s app for issuance and verification of documents, tops 100 million users, Manish Singh, TechCrunch, 18 March 2022
11. The Market Opportunity for Reusable Identity and How to Get There — Liminal Industry Report, February 2022