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The Radical Plan For A Global Identity System For A World With Shifting Borders

Some 1.5 billion people lack a legal identity. The blockchain technology that underpins bitcoin could be the answer.

The Radical Plan For A Global Identity System For A World With Shifting Borders

When refugees and migrants leave their homes behind, they may give up their possessions and livelihoods and often something else: their legal identity. They cross borders without proper documentation or their passports are lost or stolen along the way. German police said recently that 80% of Syrian refugees in that country didn't have the right paperwork.

The lack of official IDs has compounding effects. Refugees can be shut out from social services or denied access to financial funds sitting in their home nations. Host governments have to issue new documents, which is expensive, takes time, and is open to fraud. And, for refugees, stuck in ad hoc accommodation, no identity means, in effect, that they are not only homeless, but, in a sense, anonymous.

This isn't only a refugee problem. An estimated 1.5 billion people worldwide lack a legal identity—an issue the United Nations is pushing to address in its global development agenda. As part of the new Sustainable Development Goals agreed to by more than 150 world leaders last year, one aim is to "provide legal identity to all, including birth registration, by 2030."

How might that happen? The United Nations already runs existing ID registers, like a biometric system for refugees in Senegal, and an iris-scanning system for Syrian refugees in Jordan. But John Edge, cofounder of the global initiative ID2020 initiative—a collaboration between UN agencies, NGOs, technology companies, and banks—says these are frequently disconnected from one another, making tracking people across borders difficult.

One of the most intriguing and radical ideas is a new kind of identity system based on blockchain technology, which could bring together disparate programs to create a new universal identity database.

Blockchains—which first helped account and authenticate bitcoin cryptocurrency—are decentralized ledgers that track transactions of digital assets, whether it's currency, stock and bonds, or identity details. The network is made up of a chain of computers, each of which have a copy of the ledger and can see if changes have occurred. Blockchains are thought to be secure because all computers must verify and approve each transaction as it takes place; a hacker couldn't get to every single computer. On the identity blockchain, individuals would store their data in a sort of locker or escrow account, allowing people to access it on a need-to-know basis.

This has several advantages over the ways we traditionally think about identity. Most importantly, blockchain ID systems can reverse the normal way identity is established. Typically, identity is conferred by a national government, which certifies who we are and records this in a database. With blockchain technology, individuals create and store their own identity on networks of computers that no one person or entity controls, establishing a "self-sovereign identity." In other words, refugees would no longer be dependent on home governments for their identity rights. People could reclaim their ID in whatever country they're in without having to contact, say, the Assad regime in Syria. It could even allow for pseudonym IDs to protect activists living in repressive regimes or other vulnerable people.

Patrick Spens, a blockchain consultant with the accounting and consulting firm PwC in London, describes the conceptual leap as "reversing the internet." Today, he says, technology companies require users to sign their opaque terms and conditions and give up their data. "If you have a digital identity," says Spens, "in theory you could ask Apple to sign your terms and conditions because, as in individuals, we would be in charge of our identity."

A decentralized identity system could also have enormous economic value, which, says Spens, explains why 120 companies attended the ID2020 summit earlier this year at the United Nations in New York City. It would allow people without bank accounts to join the mainstream banking system, giving technology and financial companies access to a whole new raft of customers. Arguably, the drive to set up mobile banking in the developing world has preceded the more fundamental goal of establishing identity (and partly explains why mobile banking hasn't always taken off).

ID2020's aim is now to facilitate technology development, while leaving it open enough so countries can choose the parameters of local systems. Dakota Gruener, ID2020's executive director, believes refugees could be a useful test audience before expanding new ID infrastructure more widely. "They don't have a state system to turn to, and you're not trying to build off existing systems. There's an opportunity to have an impact on refugees, while also using what you learn to help people globally," she says.

Blockchain identity systems for refugees do already exist. BitNation, a virtual nation founded on the blockchain, set up an emergency digital ID system for Syrian refugees last year. Founder Susanne Tarkowski Tempelhof says "a few hundred" refugees have registered so far (which isn't many, but provides a proof-of-concept).

Toward A Universal Identity System?

The exact details of how a new global identity system would work are still to be worked out. But Gruener imagines it would evolve into a database overseen by an international, nonaligned organization like the UN. It would be flexible enough to encompass every country's existing rules and structures, but accessible to individuals with their own smartphones. Spens imagines that multiple commercial "custodians" would play different roles, and indeed there are several startups already offering blockchain-based identity services, including ShoCard and Blockstack.

Still, there are significant barriers to establishing a universal ID system. A global "identity protocol" would be needed, like HTTP is to the web or SMTP is to email. Without a large global institution like the UN or International Monetary Fund taking charge of this, startups are going to remain startups, says Spens. At the same time, national governments would have to agree to give up some control over ID-making, passing power to the network and to individuals. This is hard to foresee happening.

But Edge says technology itself shouldn't be a barrier: The building blocks are in place, and recipients wouldn't need to understand blockchain, any more than they need a degree in pharmacology to get a vaccine. (In many developing countries, vaccination rates now outstrip birth registration rates.)

What is clear is that the current system of nation-based IDs isn't serving a large number of people and, even when people are identified, their records are open to abuse by officials. Bringing in the private sector to build a blockchain network for identity could solve two problems at once: delivering IDs to more people and changing the current power balance between issuers and individuals. The next refugee crisis would therefore be more manageable. People stranded a long way from home could quickly prove who they are, rather than relying on officials somewhere to back up their claims.

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