Blockchain holds potential to finally modernize US identity systems

Earlier this year, more than 145 million people had their Social Security numbers (SSNs) stolen when hackers took advantage of Equifax’s insecure network design. Because of this breach, nearly half the U.S. population is now at risk for permanent identity theft.

Since the hack, the Trump administration has suggested ending SSNs as the leading identifier for American citizens and permanent residents. And Congress has demanded answers from Equifax, as well as called for a technology-first approach for national IDs.

Abandoning SSNs and adopting digital forms of identification is long overdue. SSNs were first launched 82 years ago as part of New Deal program. Franklin Roosevelt was president, Amelia Earhart was flying solo from Hawaii to California, and the first canned beer was sold in Richmond, Virginia. There was no internet, no personal computer, no color TVs.

{mosads}Having your SSN compromised is a nightmare. Identities are stolen, credit is ruined, and money is often permanently lost. Since SSN’s are assigned at birth and changing the number is next to impossible, victims have limited options for restitution or recourse.

And if the federal government approaches this threat like other non-defense related technology innovation (see, for example, a decade and $3B wasted to digitize our immigration forms or the ObamaCare website debacle), we’re in big trouble.

It’s time for a different approach. The U.S. government should do the following:

• Use blockchain: Let’s start by using blockchain, a perfect technology for securing data with cryptography. Users would have more control over their private data by providing minimum information for identification. This is done by assigning users both public and private keys. For example, a user can prove their identity to banks using their private key without sharing it. Both private and public key are always used together to perform actions by the user, but the public key is never shared externally.

  The private could link to a Social Security card, and the government would distribute benefits via blockchain. Even if someone’s public key were compromised or leaked, criminals would be unable to access data without the private key.

• Bring in the experts: The Trump administration and Congress should sponsor a competition, allowing various American technology teams to build blockchain-based identity solutions. The president would appoint a panel of eminent technologists to judge the competition, and the winning team would be selected as the provider of national identity for American citizens.

• Create a National Identity Foundation: The winning team could incorporate into a non-profit foundation (e.g., the National Identity Foundation) and use an ICO to fund technology developments. Congress could mandate that a portion of the tokens issued be awarded to the treasurer, as part of the agreement to making the winning product the source of national identity.

To secure the needed resources needed to manage the technology and not rely on government support, the National Identity Foundation could also charge users for credit reports less than a penny per report to pay for the maintenance of the identity.

Whether it’s criminals stealing money from senior citizens or terrorists producing fake IDs to facilitate travel, identity threat is one of the greatest cyber-security challenges of our time. Everyone is at risk, and we must produce an aggressive, technology-focused solution that protects American citizens.