Last week the German arm of Deloitte Consulting announced a deal with decentralized identity (DiD) firm BOTLabs, the developer of the KILT Protocol, a public blockchain for verifiable credentials. Deloitte has integrated KILT’s blockchain technology into its know-your-customer (KYC) and know-your-business (KYB) processes.
The reusable credentials are for various compliance applications, including banking, decentralized finance (DeFi) and age verification, such as for purchasing alcohol.
The concept of using blockchain for digital identity often seems like a contradiction because blockchains are transparent, and identity information is private. As KILT is a self-sovereign identity solution, individuals or businesses store the credentials and personal information in their wallets rather than creating a honeypot of private data stored in a centralized corporate database. Hence there is no private information on the blockchain (see later).
A company like Deloitte can attest that a passport belongs to the person and digitally sign the credential.
“By offering reusable digital credentials anchored on the KILT blockchain, Deloitte is transforming verification processes for individuals and entities,” said Micha Bitterli, Head of Deloitte Managed Services. “Digital credentials that are convenient, cost-effective and secure have the potential to open new digital marketplaces, from e-commerce and DeFi to gaming. Deloitte has the technology knowledge, reach and trust to issue credentials that are globally accepted.”
KILT’s blockchain is used for a limited range of functions, including a digital fingerprint (a hash) of the issued credentials enabling it to be revoked in the future. As a public blockchain – KILT is a Polkadot parachain – it is also used for KILT token transactions such as payment when an attestation company confirms that the person is the passport holder and writes the hash to the blockchain.
Using the blockchain to store payment data risks data leakage as wallets can be traceable, and the payment can be linked to the type of credential logged alongside the hash. So the fact of a type credential issuance could be discovered, but not the contents of the credential.
As the cryptocurrency world comes under the regulatory spotlight, a raft of crypto-focused digital identity solutions are being launched. For example, Mastercard launched Crypto Credentials last month. The Centre consortium founded by stablecoin issuer Circle and Coinbase has the Verite solution, a decentralized identity protocol. It is also supported by Block, ConsenSys, and the foundations or organizations behind Algorand, Hedera, Polygon, Solana and Stellar.