The Solution to Preventing Identity Theft in an Increasingly Digital World
Having control of your identity is no longer a pipe dream. Here's how you can prevent your identity from being stolen.
By Jeff Jani •
Opinions expressed by Entrepreneur contributors are their own.
Identity has become a highly complex concept in recent years. Our society has moved from the primitive idea that your identity is your physical body to including vital components that track you across time and space: your SSN, birth certificate, passport and driver's license. In addition, as technology has progressed, we've been able to tie in your digital footprint, online presence, work history and credit information; all of these items collated together create a unique identity that only belongs to you. But even though all these pieces belong to you, you are currently not in control of your identity.
Instead, we're in a transitional period. People know that too much of their identity is unsecured across the vast reaches of the internet, but getting control of that data is a daunting task. That doesn't mean we shouldn't try, in any case. Until recently, people have relied on a physical safe in their homes to protect their most sensitive personal data, but that's not practical in a digital world. A solution is quickly emerging, though: The digital identity wallet, which gives each person unprecedented control over every bit of digital data tied to their identity. This tech will put you back in the driver's seat of your identity.
Related: Protecting Your Identity. It's Your Birthright.
Why people don't always own their identity
To understand where we're headed, we must first know where we are. Each of us has dozens, if not hundreds, of places online where we've shared bits and pieces of our digital identity. To create a simple social media account, you often have to input at least a phone number, email and birthdate. Applying for a home loan or proving your identity for government benefits requires more sensitive data. By itself, each of these pieces isn't your identity, but when taken in the aggregate, each leaves us open to significant risks — just ask the millions who are victims of identity theft each year.
The fact is that too much of our data is under the control of entities other than ourselves. There's no single place to store all your data. Instead, you have a separate login for each of your online accounts, and once you've given a company access to your data, you can't take it back (often with disastrous results). Out of convenience, we make our passwords easy to remember, reuse them across sites and store credit card information in our accounts. It's understandable, but thieves have no hesitations about stealing our data.
Related: Blockchain, NFTs and the New Standard for Identity and Security
Is there a solution?
Thankfully, companies and government agencies are working to correct this fatal flaw in current practices. The solution is a decentralized identity wallet that stores all your information using blockchain technology. When these wallets are protected by powerful encryption, the result is a very secure way to store and manage personal data. Instead of inputting your data on a website, you open your identity wallet app on your phone and authorize them to retrieve only the required pieces for the transaction. You can then revisit permissions at any point and withdraw that permission whenever you see fit. As quantum computing and encryption become more mainstream, the result will be an unbreakable "safe" for your digital identity — and only you will have the key.
The future is here
The technology exists now to make this identity management possible. Decentralized blockchain technology can render your information secure and unalterable, and biometrics means only you can access your data. The digital format is straightforward and convenient to send to whoever needs it for your day-to-day business. Still, blockchain technology means companies or governments aren't necessarily storing your data — they're only accessing it. Even the company that made the app won't have access to your information unless you grant it. Digital identity wallets also make your data recoverable: You can revoke access from any third party whenever you need it. With your biometrics, you don't have to remember yet another password to access your own data.
Related: How to Identity Proof in an Increasingly Virtualized World
We've reached a point where identity theft can be prevented. Many enterprising companies are hard at work making digital identity wallets an accessible and practical application for mainstream use. It's time to take back control. You can once again be in control of your identity without having to go off the grid. And we can do it in a way that is almost totally secure.
