Towards self-sovereign identity using blockchain technology (2016)

With more than three billion internet users, each with multiple digital
identities, the management of these identities is very important.
Surveys show that people often use the identity management systems
they don't want to use. They don't have full control over their infor
mation, have no way to know what is shared with other parties and are
dependent on trusted parties when logging in to websites.
Blockchain technology is used as basis for a secure and transparent
distributed ledger for the Bitcoin cryptocurrency. Its decentralized, pub
lic and immutable properties solve the double spending problem and allow
every participant of the network to read the transaction history, help in
the validation process and pay and receive Bitcoin.
Cryptographically complex math ensures that everyone can do trans
actions with everyone without the need for a trusted third party. Next
to financial transactions, this also holds for other claims. Entities can
put claims on a decentralized ledger by digitally signing it, which allows
any other entity to verify that these claims are made by that specific entity.
This allows authorities like governments to make claims about indi
viduals, which can be combined with other claims to create a very strong
claim about someone. Because both the claimant and the claimee can
be verified, this allows entities like mortgage lenders to outsource their
Customer Due Diligence (CDD) processes.
In this research we will explore the possibility of self-sovereign identity,
where you are in control of your digital identity.
We started with a desk research on currently available identity man
agement solutions. We concluded that in most systems, the end-user is
not able to store their own data. Currently only one decentralized system
is available, but has not gained wide adoption yet.
A case study has been performed on a solution which allows the ex
change of KYC attributes, resulting from thorough Customer Due Dili
gence (CDD) as is often performed when opening a bank account. These
attributes can be used by other entities, like insurance companies and
mortgage lenders to make their on-boarding process easier for customers,
since they don't need to supply copies of the same documentation all over
again. Also, the companies themselves could outsource their Customer 
Due Diligence (CDD) this way to lower costs and make fewer errors. Al
though the idea is very interesting, the studied solution did not meet the
expectations. At the time the company behind the solution was very small
and the process to improve very complex. The solution was also propri
etary, creating dependence on the vendor, which heightens the adoption
barrier.
Because of the lessons learned from the case study, the results of the
literature research and the desk research, we designed an architecture for
a Decentralized Identity Management System (DIMS) using the concept
of claim-based identity and blockchain technology. To lower adoption barriers and create a self-sustaining ecosystem, it
will be developed on a public blockchain and source code will be made
open-source. The solution will be privacy-friendly by using privacy-enhancing
techniques and storing only claims about one's identity. We also provide a
solution to allow retrieval of more sensitive data, and made it as modular
as possible to make integration within existing IT architecture easier.
The Decentralized Identity Management System (DIMS) can be use
ful in a wide range of use cases, like proving your age when buying liquor
at the supermarket or applying for a health insurance where you get a
student discount if you can show your are enrolled at a university.
This shows that our work resulted in a solid foundation for self-sovereign
identity using blockchain technology.