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Blockchain eliminating synthetic identities

On the web that’s today surfed by over half the world’s population (4 billion to be precise), there are sites selling people’s data, including their names, social security numbers and credit card details. These websites are also ‘empowering’ other criminals with the art of stealing. Globally, governments and established institutional firms have been struggling to conquer this with awareness as well as advanced technological features.

However, their efforts have not come to fruition. Recent research concluded that in 2017, 50% of the tech support users were victims of identity theft in the USA alone. Despite such shocking numbers, awareness against identity theft continues to be sluggish as according to another report, 57% of internet users in the USA believed that social media platforms approve business pages before letting them go public. This creates a false blanket of trust around these businesses, and people end up sharing their personal details.

Fraudsters can use real data or fictitious information or a combination of both to create synthetic identities, which form a significant part of cybercrime. These are then used for crimes hugely varying in the degree of danger for the victim, community or world as a whole. Synthetic identities get used for stealing money or assets, creating fake accounts or credit cards and sometimes even passports. The most dangerous implications of such malicious activities include money laundering and terrorism financing.

It’s unfortunate when a person is unable to pay rent for the month because a hacker stole and spent all the hard-earned savings. However, it’s incredibly disastrous when such money gets used for terrorism, or the individual’s identity supports money laundering on a global scale.

Saying that it’s the need of the hour is just an understatement for this growing problem. A study conducted by United Nations Office on Drugs and Crime (UNODC) to evaluate the magnitude of illicit funds estimated that 3.6% of the global GDP (USD 1.6 trillion) was getting laundered in 2009. This is back when hackers and technologies were less advanced.

However, the unmatched technology progress has also enabled revolutions in the field of security and privacy. One such solution is offered by the blockchain technology, as it can breathe life into an almost barren identity landscape.

Blockchain can power decentralised identities and directories that can be stored on a tamper-proof ledger. It can empower all organisations to save KYC (know-your-customer) data on immutable blocks, and eliminate a single point of failure or breach.

When all the customer data, along with a timestamp and hash gets stored on a block, it’s almost impossible to hack into such a system. Blockchain also has the capability to reduce costs and increase efficiencies of these solutions. Blockchain can eliminate identity fraud and make data storage online impregnable.

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