Deep dive: identity theft and how blockchain can help

28 June, 2018

Identity theft can impact anyone at any time, and victims aren’t guaranteed easy recovery. It’s the type of crime that can ruin personal and professional relationships, devastate your income, and even get you arrested or jailed through no fault of your own. If you’ve ever been a victim of identity theft or just want to stay informed about how best to protect yourself, we’ve got you covered.

Defining identity theft

The American judicial system defines identity theft as a crime in which a person deliberately takes and uses someone else’s personal information in a way that typically involves financial gain through fraudulent means. There are a variety of ways to commit identity theft as well, including fraudulent tax refunds, stealing other people’s mail in order to change their mailing addresses, and even money laundering.

It’s often very difficult to determine identity fraud as well. Consider the case of missing air force officer William Howard Hughes, Jr. Hughes was employed by NATO to work on classified planning and communication surveillance during the Cold War before suddenly vanishing 35 years ago. Hughes began work in the 1980s as a consultant for the University of California under a fake identity. He was loved by peers and coworkers as a charismatic leader, an intellectual, and an all-around kind human being. But eventually, The Air Force Office of Special Investigations discovered his location and charged him with desertion.

Most identity fraud cases aren’t as seemingly victimless as Hughes’s, sometimes costing individuals hundreds of thousands of dollars, and government institutions millions. To help accomplish this type of theft, the information tied to one’s address, bank accounts, medical history, computer passwords, and social security becomes heavily desired by identity-stealing specialists.

How to spot if you’re a victim

Determining whether you’re a victim of identity fraud can be tricky, but the FTC has some warning signs for you to watch out for:

  • Money missing from your bank account without notification.
  • Debt collectors calling you about debts you don’t actually have.
  • Declined or bounced checks. If businesses keep rejecting your checks while you have money in the bank, your checkbook might be compromised.
  • Odd charges on your debit or credit history.
  • Utility bills for things you haven’t used.
  • Slow or stopped mail. If you’re not receiving your mail and the post office doesn’t know why, this could be a sign that your mailing address has been compromised.
  • Your medical insurance provider says you’ve used up all your insurance when you haven’t. This could also take the form of your insurance claiming you have a pre-existing condition when you were never evaluated for one.

If you notice any of these things happening, it’s best to investigate and find out exactly why. You could be a victim of fraud and not know it yet—and an early response is far better than later.

Blockchain technology: response and challenges

Many people think blockchain technology improves the security and transparency of services at financial institutions, and leave it at that. It certainly does do this, but the technology is about so much more. Major industries including healthcare, transportation, delivery services, and government institutions are improved by the extra security and efficiency of blockchain applications.

Considering the millions of recently hacked identities from the Equifax data breach, It’s hard to say we have much control over our identities in 2018. A quick google search will turn up many people’s home addresses, birthdays, phone numbers, email addresses, and even property value. Some states, like Massachusetts, even maintain a public list of resident incomes that are searchable by name. While the convenience is attractive, you shouldn’t have to sacrifice your privacy when using tools that help remember your passwords and financial information on the web.

According to Business Tech, this is easier said than done. One of the biggest obstacles emerging blockchain technologies face is throughput. At best, blockchain technology can currently produce about 1,000 transactions a second, which doesn’t come close to covering the 40,000 credit card transactions happening every second.

But the early days of blockchain development saw as little as seven transactions per second, so there is good evidence to support that the technology scales well and improves rapidly. Considering how recently blockchain research and development started, the rapid speed of its improvement and application seems as stunning as it is promising.

Emerging blockchain technologies can give much greater security against identity theft by using Decentralized Identifiers (DiDs). DiDs are essentially a private URL stored on a blockchain ledger. Each private URL would be linked to separate areas of a person’s identity, like your driver’s license, passport, and social security number. Since the blockchain involves immutable records, all those hours spent organizing your important private information—like all the different requirements and logins for different services—could be significantly reduced or eliminated altogether, while your data is stored more securely on the blockchain than anywhere else.

Our solution

At Veritoken, we are tackling the problem of identity theft head-on. Our blockchain-based platform lets individuals choose when their information is publicly accessible or invisible. Users are compensated for their verified information and for their time with tokens on the platform, creating a win-win for both sides of the equation.

The team behind Veritoken is already testing improvements in verifying the authenticity of government licenses, like passports and state IDs, with the blockchain protocol. From online dating sites to your carefully crafted resume, the Veritoken platform improves personal information verification and security for individuals, businesses, and public institutions alike.

While blockchain research still has hurdles to overcome, such as consistent scalability and reaching even faster processing times, the security and privacy offered by storing information on a blockchain ledger is unparalleled. In the not-too-distant future, everyone will have a digital version of themselves that is both accurate and as private as the owner chooses. WIth intensive testing, it’s reasonable to think that blockchain technology is poised to set the standard for information privacy and data ownership worldwide.

 

 

 

 

 

Image via Pixabay.



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