Organizations can use a single system to authenticate themselves with numerous entities due to the advantages of a centralized identity management system.
Identity is the key to everything in the digital world. The gateway for gaining access to the systems that the staff, partners use, and clients is digital identity. It is becoming more challenging to determine who has access to what, especially if businesses are unwilling to abandon outdated identity management concepts.
Any business process today might depend on several linked systems, each operating in a different cloud. The business’s reputation depends on ensuring that only those with the necessary access rights can access specific information at each stage.
Decentralized identity, which gives system entities like people, organizations, and things control over their identities and permits trusted interactions, is one of the most promising new approaches.
The strength of this strategy is that it gives users the freedom to share various aspects of their identities with multiple services in the ways they see fit. Organizations can use a single system to authenticate themselves with numerous entities owing to a centralized identity management system.
The benefits of a decentralized approach to identity and authentication
The management of customer data is already incredibly complex for businesses in today’s world. Customers may adopt various “identities” when interacting with a company. The power is returned to the customer if a business has a decentralized identity as a deliberate architectural construct. Still, it does so in a way that makes it simple for organizations to cater services to the various identities a customer chooses to adopt.
Establishing a solid foundation for decentralized identity
Systems for decentralized identity are fundamentally distinct from current methods. Most enterprise-level consideration of next-generation authentication at the moment is given to initiatives. However, these methods place the responsibility for managing authentication on the enterprise. In a truly decentralized identity system, the person is in charge. Additionally, regulators are increasingly supporting this kind of user empowerment.
Businesses today face a real challenge due to concepts like the “right to be forgotten” and “the principle that individuals can demand to know what data companies are holding about them.”
The solution is a decentralized identity system, which only shares information that the user wants to share. If the user changes their mind about sharing information or determines that an organization no longer requires it, they have the power to revoke access.
Standards are a crucial enabler for creating a decentralized identity system. Organizations like the Decentralized Identity Foundation are setting the pace in this area. Its goal is to create the elements of an open, standards-based, decentralized identity ecosystem for individuals, groups, applications, and gadgets. It places a lot of emphasis on the idea of open, decentralized identifiers, which are entirely individual, persistent, and manageable.
Despite the COVID pandemic negatively impacting IT investments worldwide, the New IDC Spending Guide predicts that industries like banking, government, and healthcare will continue to prioritize spending on Blockchain-based identity management solutions. It estimates that over 7% of all Blockchain spending goes toward identity management. There are enough companies convinced of the viability of Blockchain to invest significant money in it. COVID has been a driving force behind early adoptions of Blockchain-based decentralized identity management systems in other places.
Decentralized identity strategies based on Blockchain are currently exciting proofs of concept, but there is still a long way to go before Blockchain becomes a commonplace business technology. Blockchain is not designed for the speed and scale typically associated with enterprise technology.
Even though organizations might not begin implementing a decentralized identity management system immediately, it won’t hurt to start making plans.
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