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Today’s digital world is not fueled by oil or gas, it is fueled by data. Data has become an important commodity in advancing many different digital sectors, but the management and protection of data is one area that is still lacking. Personal information breaches and hacks plague the arena and have done untold damage to reputation, leading to lost revenue and huge added costs for companies dealing in data. But, this has led to an opening for blockchain for digital identity.

Consumers have come to realize their identities online, and their digital data deserves to be protected and managed better. GDPR in Europe and social media personal information breaches have outlined why it is becoming increasingly important for companies to have rigorous consumer identity management. The consequences, which range from fines and litigation, can go as far as irreparable brand damage and loss of consumer confidence.

It is a nuanced and different approach across different sectors, dealing with different types of data, but for the telecommunications arena, blockchain technology has started to emerge as a perfect tool to protect data and secure customers’ digital identity.

Communication service providers (CSPs) are especially at risk as the notion of removing them from the equation is gaining momentum. Between smartphone manufacturers and Operating System Providers, there is a drive to reconnect the consumer with digital identity solutions and disintermediate the communications service provider companies.

But, blockchain use cases in Telecom offers a perfect solution, and a way to seize the closing gap in the market. For data security, blockchain operates off a decentralised model to disseminate the information away from one centralized point that would be vulnerable to attack. It is also a technology based inherently on cryptography, and as such is immutable and unhackable at its core.

There are already many different blockchain-powered identity-as-a-service solutions in the market leveraging the robustness of the technology and its ability to secure, protect and maintain data. These solutions not only offer more control to the companies but also provide a more affordable solution and a new revenue stream. Being able to offer digital identity solutions allows the CSPs to generate new revenue from their partners and the market at large.

The difficulties of data

Since the digital revolution began and we entered into Web 2.0, data became the oil of the internet. However, it was the internet companies that realised this first before the customers, and as such, it was more of an exploitation of data than structured ‘drilling.’ This has led to mounting difficulties in data management as the requirements and regulations put in place to protect personal digital identities have come after several high-profile breaches.

Facebook and Cambridge Analytica, with their data scandal, opened the world’s eyes to the mismanagement of consumers personal data. This scandal also emerged at a time when there was an awakening to the need for data protection and the emergence of new regulations and rules, such as the GDPR.

Of course, the need for data protection on this level cannot be discounted, but it has also come with huge costs, both financially and operationally, for companies that deal in consumer data and identity — such as telecoms.

This new era that has placed due importance on the protection of data has however failed to hit its mark, and it is still crying out for a solution that has the ability to offer robust security at a low cost. However, blockchain technology is starting to fill that niche with its inherent cryptography and decentralised operations.

Being decentralised is one of the most effective ways to counter planned hacks and attacks. The storing of data in one centralised spot becomes a beacon for nefarious actors. Hackers can target information stores and hijack the data causing breaches and in some cases hold it for ransom.

Blockchain technology disseminates information across a decentralised network while also securing it across said network with its innate cryptographic nature. Additionally, blockchain operates with consensus mechanisms which ensure that the data is valid and guaranteed.

Many CSPs have noted these pillars of blockchain technology and have begun working towards blockchain-powered identity-as-a-service solutions. This provides these companies with better oversight, better control and security of their customer data, but also with a new revenue stream.

Data is a precious commodity, and the amount that CSP companies have at their disposal through the growth and dominance of smart phones allows the CSP to become a focal point of identity and authentication through the blockchain.

CSPs are not only able to deliver blockchain-based identity-as-a-service to consumers, but they are better positioned to safely and securely provide identity verification and information to legitimate agencies such as hospitals and governments.

How it works

Blockchain-powered identity-as-a-service solutions work primarily on the basis of decentralised identifiers, identity management, and embedded encryption. This hands the power of a consumer’s digital identity back to them while simultaneously making it easier, and less invasive for the CSP to manage.

In terms of a digital identity blockchain use case, the decentralized identifier (DID) is key. This is a pseudo-anonymous identifier for a consumer that is secured by a private key, and having this private key gives the user the power to own or control their digital identity. This DID is associated with a series of attestations that, in the case of a CSP, would allow the consumer to grant them access to only necessary data.

These DIDs are secured in cryptography through the issuance of a private key, only known to the owner. Meanwhile, public keys can be handed out to the CSP to complete an authentication pairing, where the public key verifies that a holder of the paired private key sent the message. This is then followed by encryption, where only the paired private key holder can decrypt the message encrypted with the public key.

Although seemingly complicated, the entire process can operate in a user-friendly manner that need not cross the consumers path when using any blockchain jargon or complicated processes. In fact, it is more likened to having a Bank PIN code (the private key) and a bank account number (the public key).

Having this DID leads onto the concept of self-sovereign identity (SSI) where the storing of data is done by the consumer rather than by a centralised company that can be vulnerable. Furthermore, this can create opportunities for CSPs to offer identity-as-a-service to benefit the protection of consumer data, but also benefit the CSP.

Less time and resources are needed to manage the data, and furthermore, there is little to no time or effort needed when it comes to potential data breaches. Identity-as-a-service leads to increased profitability for the companies while SSI is a fundamental change in the governance of data which empowers consumers.

These concepts empowered through blockchain also work seamlessly alongside regulations that have recently been put in place. Article 20 EU GDPR grants users the right to data portability, which means they have the right to have their personal data transmitted directly from one controller to another.

With DIDs and verifiable credentials — ensured through consensus mechanisms and the underlying functionalities of a specific blockchain platform — it becomes possible to seamlessly move identities that were tied to one system to another without any issues. This DID data porting also allows for reusable credentials all the while maintaining Know Your Customer (KYC) requirements; especially useful in customer onboarding.

Beneficial solutions

The concept of creating a DID for a CSP’s customer, and handing them control of their data in terms of SSI, comes with many benefits for users and companies alike. It begins with the burden of data responsibility being removed from the company, removing also the high costs, inherent risks, and potential damage to reputation in the case of a breach.

More so, CSPs can benefit from streamlined attestation where the data provided is verified as true and does not require any identity verification as a service. KYC compliance is also attested, and can be ported, adding peace of mind for the Telecom company.

In operating a network of clients, the CSP also has a solution that allows for the control of data across the ecosystem which only puts forward data that has been allowed by the user through the SSI, and is not private or personal and unnecessarily shared.

Nowadays CSPs are not simply data providers, but instead have a range of networks and business streams; where loyalty and other customer benefits can be shared and reused across the wide CSP partner network. A DID identity solution doesn’t just benefit CSPs in utilizing reusable credentials for their internal operations but opens doors to more streamlined and profitable relationships with business partners. Imagine the opportunities of reusable credentials when utilized by both the CSP and their network partners.

In order to achieve this sleek solution, there is a need for a powerful and scalable blockchain platform that has the ability to permission users and organisations easily. Blockchain technology is very broad and applicable, and so, the solutions built upon these platforms need to be specifically tailored.

Protokol’s enterprise solution

For Telecommunications, size, scale, and streamlining of the blockchain platform is vitally important. It is with this in mind that Protokol’s enterprise-grade technology is well suited as a blockchain-powered identity-as-a-service provider.

Utilizing the powerful ARK blockchain platform, Protokol delivers pluggable and customizable identity-as-a-service solutions for CSPs to help better manage customer data, and unlock new opportunities for revenue generation.

We understand the needs of Telecoms, and have identified how our solutions can bolster companies faced with the difficult path of data protection in this arena; especially in relation to customer data being used by both CSPs and their partner network. To learn more, please visit our ‘Blockchain in Telecom’ page.

To discover how an identity-as-a-service solution could help your organization cut costs, add revenue, and streamline operations, take a look at Protokol’s digital advisory and blockchain services, or book a free video consultation with our blockchain experts using the form below.

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