How Blockchain can Prevent Identity Theft

How Blockchain can Prevent Identity Theft

Identity theft has become a great danger nowadays and it has increased at an enormous amount in the last few years. This is despite all financial institutions and bodies giving alarms and alerts to the consumers who could not avoid this theft. This resulted in organizations asking for information and data from individuals to avert identity theft. This resulted in the loss of control of individuals over their personal individual information. Blockchain technology can remove this menace by creating a future where individuals can hold their privacy without risking identity theft.
So, here has to be a solution, right? We tell you about all possible web identity thefts and also how can you protect yourself from such frauds. Keep reading!

Birth of Identity Theft

How actually identity theft started? It all needs A claim is a statement made by an individual or entity. Claim, proof, and assertion are required for asserting an individual’s identity. In order to establish an identity claim, an individual requires a form of proof like an ID. Further, if an additional validity is required, a third party can assert this claim by cross-referencing their records. This form of data is, however, unstructured. It is further to be noted that proofs are usually given in the form of images or photocopies and can easily be stolen.

Sovereign Identity

Blockchain ensures that an individual retains greater security regarding their individual personal information without losing their privacy and incurring additional expenses and fees. It is to be noted that distributed ledger containing everyone’s identity distributes trust from a single central point towards the whole system. Thus, personal information is kept under individual control.

Avoiding Synthetic Identity Theft

In case of Synthetic identity theft, where individual leverage pieces of fictional and real personal information to fabricate an entirely new identity, is the reason for the new account origination fraud that banks regularly have to deal with. In assuming these false identities, fraudsters can open, use, and reap benefits from savings and checking accounts, loans or credit cards before banks can detect or be alerted of their duplicity. This often leaves legitimate names with credit card debt, defaulted or credit score hits attached to them.

Averting Card Fraud

This is the most common and rampant of fraud since the issuance of present-day cards having CVV number. Now individuals who have stolen a credit card number, expiration date and maybe even a CVV number can utilize the wide web of e-commerce masquerading as that cardholder, doing online transaction at will, no ID checks required.

Prevention of Tax ID Fraud

During tax season, there’s always a looming threat that fraudsters could intercept, file someone else’s taxes, have the return sent to them, deposit it into an account (potentially even a fraudulently opened one) and withdraw the funds before the original taxpayer even sits down to address their annual filing. If the official was able to lean on a blockchain-based digital identity, which would likely include employer and payment details, the identity of the person filing could be verified upfront and yearly tax returns could be made a part of identity attributes backed by the immutable blockchain.
All of us just agree to whatever are the terms and conditions that are required to get that ‘free’ service. In exchange, we are giving away our phone numbers, location, credit card numbers and
what not! We do not like to enter our credit card number over and over again so we save it to check out faster.

Conclusion

It is desired to leverage this platform to emphasize on the blockchain technology. Blockchain-enabled identity management not only gives us the ownership of our data but also keeps it very secure. This makes us a sovereign individual. Blockchain technology makes it extremely difficult for fraudsters to gain data illegally.