Solving the Challenges of Digital Identity With Hyperledger Indy

Curtis Smith
Curtis Smith
7 Min Read

On the web, individuals and businesses have no control over their digital identities used for availing online services. Instead, centralized service providers control the information flow, including their business sensitive and personally identifiable data (PII). Often, online service providers exchange such data that is saved in repositories without their consent. It not only compromises the privacy and data integrity of users but also increases the risk of hacks. To overcome privacy and identity challenges, it is essential for IT-enabled organizations to include a security layer that provides sufficient data encryption.

Self-Sovereign Digital Identity Solutions

Digital Identity

One such solution for ensuring data privacy and identity protection is self-sovereign identity. It is a technology that puts individuals in control of their digital data on the web. Self-sovereign identity is an interconnected and interoperable solution of encrypted digital identities that exchange information in a peer-to-peer system.

In a draft, the United States Department of Homeland Security published the required aspects of the ecosystem of self-sovereign identities. Following are the essential aspects that form the foundation of an ideal decentralized identity solution.

  • Self-sovereign trusted digital identities
  • The contextual and selective reveal of information
  • Limited access and involvement of intermediaries to individuals’ identifiable information
  • No linking of individual information with other systems without consent
  • A two-way trust system, providing support for users to manage information of service providers

Self-sovereign identity solutions with Hyperledger Indy

Hyperledger Indy

Hyperledger Indy is one of the most appropriate blockchain technology frameworks for developing a global decentralized identity system. It provides tools and component for the efficient development of a solution that enables real-time reconciliation and authentication in different industries. It also enables individuals to create encrypted digital identities to replace multiple usernames and passwords.

Why Hyperledger Indy?

  • Provides tools, libraries, and reusable components for developing distributed, decentralized identities
  • Enables secure, scalable and robust platform development for efficient self-sovereign identity management systems
  • Facilitates interoperability of identity solutions across various applications, administrations

Self-sovereignty: With distributed ownership, enables only the owner to change or delete their identity.

Privacy: Each identity owner in the network operates without any breadcrumbs and intermediaries.

Verifiable claims: Uses zero-knowledge proof to enable specific disclosure of data required to exchange information securely for any particular context.


Real-World Overview of the Standard Framework

An Indy-based identity solution enables identity stakeholders to accumulate their digital credentials with trust and personal control. It also facilitates them to prove their identity to anyone or anything in a secure, frictionless and peer-to-peer manner.

With self-sovereignty, individual identity owners can access, control and use their credentials required for verification.

The network comprises of latest technology standards for identity management like decentralized identifiers (DIDs). DID enables stakeholders to issue, control, manage and share credentials privately using a security standard, ZKP (Zero-Knowledge Proofs).


Identity Management Based Use Cases for Indy

Banks –  loan applications

Indy provides various transformative identity solutions to the banking system. It enables loan applicants to share only the information required by banks in a way that builds trust and confidence.

Loan applicants can apply to 50 other lenders in less than no time without exposing their any sensitive information. Instead of disclosing PII (personally identifiable information), they can generate zero-knowledge proofs. It includes age-proof, income tax details, valid government ID number, and credit score information.

On the other hand, lenders can also comply with regulations through an immutable audit trail.

Financial Servcies Post-trade processing

Indy-based solutions streamline four necessary steps of post-trading, like validation, clearing, settlement, and reporting.

Data of all stakeholder and all actions reside on the blockchain, which also enables need-to-know basis access.

Moreover, for reporting outstanding risk, it uses unlinkable verifiable identity claims on the shared ledger without undermining privacy.

Healthcare—physicians credentialing

Indy’s custom solution enables the implementation of W3 standard for claims verification and support for exchange of selected credentials. For instance, a physician seeking proof of his graduation can ask the medical school to put digital credentials on the blockchain solution developed with Indy. The hospital can access the blockchain and verify the physician’s credentials without contacting the medical school directly. Also, the physician can share only the required credentials by the hospital and nothing more.


IT—portable identities management

Indy also offers interoperability features with traditional enterprise systems like 2FA, IDPs, OAuth, LDAP, etc. These features include industrial-strength cryptography, rich metadata about identities, and sophisticated access control and policy. It makes the identity on Indy interoperable, and users can take it wherever a system accepts the distributed ledger. Then, there’s no need to create separate identity files for different systems. Instead, these systems can access users pre-existing identity on the blockchain.

Effectively, It puts users in control of access to data- and not the places that accept their identity.

Improving Digital Identity and Access Management with Oodles

At Oodles, we have successfully developed several digital identity solutions that require decentralization with our blockchain app development services. Our clients who operate in different industry domains use these solutions to fulfill their specific identity management requirements. The opportunity to work closely with them has made our blockchain development team skilled at using Indy to enable sovereign digital identity management.

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