[Blockchain Digital ID Innovation①] Why Is the World Paying Attention to Blockchain Digital ID?

Mobile driver's license implemented with blockchain-based digital ID technology.

As digital IDs spread for various reasons?from enhancing public convenience to supporting marginalized groups in the ID blind spots and contributing to human society?blockchain digital IDs, which provide self-sovereignty over identity authentication data, are gaining attention.

In fact, there is a growing call in the international community to promote the spread of digital IDs. This is because countless people worldwide live without identification, excluding them from the benefits of social infrastructure. They face restrictions in accessing basic services such as education, healthcare, and finance, as well as in social participation like voting and employment. Moreover, they are vulnerable to crimes such as human trafficking and abuse, which exacerbates poverty and inequality. The United Nations (UN) and the World Bank (WB) estimate that over 1.1 billion people worldwide lack verified identities, and both organizations are actively seeking digital ID expansion as a solution.

Those excluded from welfare benefits due to lack of identification mainly reside in ID blind spots where basic social infrastructure like ID issuance systems is weak, such as in Africa, Southeast Asia, and South America. Paradoxically, many countries in these regions have smartphone penetration rates exceeding 90%. Developing countries, which were slow to establish communication networks, adopted wireless networks quickly instead of laying cables, and skipped the feature phone market, resulting in faster smartphone adoption. This means that developing countries with high smartphone adoption but weak physical ID systems are more open to adopting digital IDs than developed countries with well-established physical ID systems. The need to protect citizens' human rights and the interplay of social and market structures make the introduction of digital IDs urgent.

Among these, demand is rising especially for blockchain digital IDs, which offer excellent security and selective disclosure of personal information. Governments worldwide aim to introduce digital IDs at the national level because they can provide citizens with convenient and secure access to various public administrative services and financial transactions, and further envision innovative services such as online voting and medical record management, improving welfare without excluding marginalized groups.

Such public services handle vast amounts of citizens' identity and personal information, requiring stronger security and data protection, making blockchain digital IDs optimal. In systems centered on a central server, if a specific server is attacked, the service can be paralyzed, and sensitive data can be leaked or lost instantly. In contrast, blockchain’s distributed structure across multiple nodes makes it difficult to paralyze the entire system even if some nodes are attacked. Additionally, blockchain’s unique ‘consensus algorithm,’ which requires agreement from all nodes to create a new block, makes it difficult for anyone to forge or tamper with sensitive citizen information. Countries aiming to use digital IDs as part of their national ID systems are actively considering blockchain digital ID adoption due to these advantages.

For example, the Indonesian government is actively promoting digital ID expansion with the goal of issuing digital IDs to all citizens by 2024 and is collaborating with global companies possessing excellent related technologies. Last year, Indonesia received national digital ID design consulting from RaonSecure, a domestic IT security and authentication platform company. RaonSecure is conducting blockchain digital ID business globally with its blockchain identity and credential authentication platform, ‘OmniOne Digital ID.’ RaonSecure has built the Ministry of the Interior and Safety’s mobile ID issuance system using its blockchain identity and credential authentication platform, where mobile driver’s licenses, mobile government employee IDs, and mobile national veterans registration cards are actively issued.

Besides Indonesia, many countries including the Philippines, Costa Rica, Malaysia, Paraguay, and Uzbekistan are reportedly considering using blockchain digital IDs in their national ID systems. Additionally, Brazil announced plans last September to start issuing blockchain digital ID-based IDs beginning with Rio de Janeiro, Goi?s, and Paran?.

Following this global trend, the blockchain digital ID market is expected to grow rapidly. Market research firm Grand View Research forecasts that from 2022 to 2030, this market will grow at an average annual rate of 88.2%, reaching a scale of $102 billion.

An industry insider said, “Blockchain digital ID-based IDs are technologically superior to other digital IDs due to their excellent security and the option for users to selectively provide identity information, attracting intense international attention. With the combined technological capabilities of countries aiming to improve their citizens’ welfare, international organizations like the WB and UN, domestic companies, and global tech firms, the blockchain digital ID era will fully commence, revolutionizing the quality of life for countless people suffering in ID blind spots and humanity worldwide.”