Why the future of blockchain is self-sovereign identity – CSIR

In Africa, blockchain levels the playing field with international nations and it’s a gamer changer, so says Carel de Jager, Distributed Ledger Technology Research Group Leader at the Council for Scientific and Industrial Research (CSIR) of South Africa.

As popular emerging technologies go, very few can match the sustained attention and media coverage enjoyed by blockchain. The distributed ledger technology emerged alongside Bitcoin in 2008 when the miasmic entity known as Satoshi Nakamoto outlined the first cryptocurrency in their now-famous whitepaper.

De Jager is intensely passionate about blockchain. We know this because very few people have their faces light up in such a visceral way when talking about decentralised trust and digital ledgers.

In an interview with Hypertext, De Jager told us about the inroads the CSIR is making in terms of its research and development into blockchain for the benefit of South Africans. He said that while the technology is still somewhat immature, more and more practical use cases are coming into fruition.

“We’re getting past the days where we said this technology will do this, or this technology will do that. Especially in finance, we’re seeing some real-world use of blockchain and some maturing use cases,” he told us.

De Jager outlines “two big themes” for distributed ledger technology in Africa, namely finance – all things between lending, borrowing, accounting, and cross-border remittances – and identity.

Self-sovereign identity is one of the use cases of blockchain that De Jager highlights as a big deal for the future, and something that the CSIR is focusing on.

“Identity is fragile, it’s often stolen and abused,” he said. De Jager gives the example of websites like Facebook, where private information from users is required for activating accounts. Apart from social media, any website or digital process that requires your private information also applies, for example registering for university or filling out an online job application.

This information needs somewhere to go, usually in the databases that can be unsafe and moreover you are required to trust these companies with your private information.

In 2021, Facebook saw private data from 533 million people in 106 countries leaked on a hacking forum. At the time, Meta said the leaked information was old, from a previous leak in 2019 and that the data was “scraped from publicly available information on the site.”

In October, Meta shared that certain apps on Android were stealing the private information of users. By placing your private information on a blockchain, this would not be possible, or so De Jager claims.

He explains, “Self-sovereign identity is this new idea to use blockchain to create software protocols that will not require this inputting of personal information from you.”

“You stay the owner of your identity, it is not necessary for a big corporate or any other company to harvest this identity information. You don’t have to trust them with that.”

Blockchain leverages a digital chain of information that exists independently in a virtual space. The ledger is immutable, transparent and auditable and shifts and thus any information placed on the blockchain is secure and trustworthy, he explains.

“The idea behind the protocol is that you create your own identity, called credentials. Your ID number is a credential. Your bachelor’s degree certificate is a credential. When an employer, for example, requests that you give them your degree certificate, that degree certificate [virtually] lives on a device that you own on the blockchain. You keep it and not the university that gave it to you.”

With this device, you can show the credential to your employer through the blockchain. Here they can check the certificate’s validity. The authenticity of the file. They can check if it was issued by the person you claim it to be from.

“It basically changes the trust relationship,” De Jager says. “Currently there is a trust relationship between the employer that requests the degree and the issuer, the university. If these two entities, if they lose trust in each other, then the model breaks down.”

Distributed ledger technology takes this trust relationship and shifts it to be between the employer and the blockchain, which is independent and unchangeable.

“The trust relationship is strengthened quite heavily and it reduces costs quite a bit,” he adds. Indeed, as he explains that maintaining enormous databases of information can be a costly and complex endeavour.

“Take for instance the national identity database operated by the Department of Home Affairs. It’s pretty well maintained in South Africa, however, in the rest of Africa and in some Asian countries these similar databases are poorly maintained, frequently corrupted and prone to frequent breakdowns, leaks, and stolen identities.”

But, “if you have a blockchain system in which you do not rely on that database, once you are issued with an identity, it cannot be stolen. Why? Because you keep it on a device, and if that device is lost there are certain mechanisms which you can use to recover it.”

De Jager explains that this recovery process can still be very difficult, “but it is a problem that is being worked on.” Regardless, you will never lose your identity nor the important credentials on the ledger. It also cannot be stolen from you.

“You keep sovereign ownership of that,” thus the name.

De Jager says that there are several countries worldwide that have launched pilot programmes of blockchain for self-sovereign identity. Including countries in Europe like Switzerland, Estonia and micro-state Malta. The United Arab Emirates also launched a pilot recently, he says.

In Africa, De Jager says that the CSIR is the only company that is really spending time developing the technology. “We are working on SSI protocols and will be rolling out a proof of concept next year.”

De Jager says that right now the CSIR doesn’t currently have any specific end-users in mind, but it is looking for partners in the public sector to serve its mandates, as well as private insurers.

“For an insurer self-sovereign identity can be quite valuable. Insurers are flooded with identity-type fraud.”

De Jager gives an example, “for instance, you are insured with insurer A and you bump your car. Tomorrow you call insurance B to get a quote and they will ask you if you have been in an accident in the last five years.”

“And you can say yes or no and there is no way for them to verify that because the data is with a competitor insurer. That is a big problem faced by insurers that they have to rely on your honesty and trust you.”

He says self-sovereign identity solves the honesty and trust problem, as the insurer will simply have to reach into the blockchain to draw your information. While this may not be the greatest for the man on the street, we reckon insurers will pay big bucks to find authentic and auditable information.

“The CSIR has been in discussion with insurers to work together to a certain extent and adopt a protocol like this because it would dramatically reduce the cost of verification of a potential client and the risk assessment that goes with insurance products,” he adds.

De Jager says that South Africa is right on the precipice in terms of blockchain adoption and how companies that invest now in education and development towards the technology will be able to survive in the future, especially in finance.

Similar to what happened with Kodak and the invention of digital cameras.

“I think we’re at that exact point for distributed ledger technology, especially for finance and law. It’s huge. I see that live in many boardrooms. Some executives ignore the technology and believe it is a fad,” he says.

“But I see others, like some of the big banks, that are serious about adopting it and are working extremely hard behind the scenes to change their business models to account for this. We’re seeing both sides of the coin play out in front of us.”

If blockchain adoption will be a factor for the continued success of the companies in these industries, De Jager says simply, “there is no doubt about it.”

[Image – CC 0 Pixabay]


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