The last 13 years have seen blockchain technology evolve into numerous use cases — finance, data, logistics and security, among others. However, the idea of using blockchain’s immutable capabilities to ID humans got new life when Changpeng “CZ” Zhao visited the island country of Palau to kick off its digital residency program. 

The blockchain identity management market is estimated to grow by $3.58 billion in the span of five years from 2021 to 2025. Key factors include the rising demand for digitalization and privacy-respecting identity solutions. As a result, a myriad of solutions breached the market serving this need in the form of nonfungible tokens (NFT), distributed ledger technology (DLT) and barebone blockchain technology.

Considering the plethora of use cases that blockchain can serve on a day-to-day basis, numerous government organizations began experimenting with the technology — weighing heavily on central bank digital currencies (CBDC) and verifiable and immutable user identity.

Problems with traditional IDs

Correctly identifying — or ID-ing — an individual has always been paramount to governments to ensure targeted delivery of services and allowances, among other requirements, which holds true to this day. However, ongoing advancements in technology empowered the general public with tools to create IDs visually identical to the original. Given blockchain’s capability to store immutable records, authorities see the technology as a fighting chance against fraud related to ID theft and fakes. 

With traditional paper-based IDs comes the…


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