Blockchain is seen by many experts as a revolutionary technology because for the first time truly secure digital transactions on the net become possible involving blockchain. If people enter into a trade or contractual relationship via blockchain, the associated data and documents are no longer on the central server of an intermediary, but in a distributed database in a worldwide peer-to-peer network. All users are therefore the control body that stands for the integrity of the system. The blockchain is hardly suitable for simple transactions with high quantities, but when it comes to digitizing complex financial and administrative transactions or complying with general documentation requirements. In our earlier article, we have discussed on Decentralized Identity and the sectors which can get benefit from Blockchain.
In our opinion, the Decentralized Identity will first gain a foothold in the business world. Many processes in active business relationships between companies are still designed with time-consuming loops. Several scenarios can be derived around a motor vehicle alone. On the one hand, the vehicle’s digital twin could replace the papers. Thanks to blockchain, a vehicle can only be deposited once as collateral for a leasing contract. Many further steps can be digitized through the process of purchasing to approving a leased company vehicle in the complicated relationship between insurance, bank, lessee, lessor, lessor, driver and manufacturer. In a world of unique digital tokens, signatures, and verified information, processes can then be almost fully automated.
Through the driving licence is a licence to access the vehicle, the DID could find its way into the world of consumers (users). Gone are the days when cars would drive off if the driver did not have a driver’s license. At the same time, the digital auto twin contains all the information on repairs, maintenance and maintenance, and the symbolically thick file would be worth real money on a resale. Finally, the price of a used car is determined by the general condition, the kilometres driven and the maintenance intervals observed. Certificates in the blockchain always carry a timestamp plus the hash of the original object – here the repair invoice of the workshop – and offer greater security during resale.
In summary, the three biggest benefits of Decentralized Identity are:
- Sovereignty: First of all, there is sovereignty over one’s own identity and control over one’s own data. Emancipated users thus move more freely and securely in the digital world.
- Optimization potential for B2B processes: Analogous processes in systems with intermediaries as a control and trust authority are too slow to keep up with Industry 4.0. The demands on public administration, as well as on companies, will continue to grow and reliable identification of partners, data and information is essential.
- Compliance: Blockchain technology can not only store transaction data with a timestamp in a large cash register, but also organize a value transfer with underlying laws.
Another example of a perfect use case is the combination of transaction data with a payment. Utilizing so-called smart contracts, different contractual agreements can be co-automated at the same time and these small programs then gradually fulfil the respective obligations.
Imagine, for example, booking a drive from A city to B city in an autonomous car. The blockchain helps you ensure that the car is a car and you are you. A smart contract acts as a notary, which in the first step withdraws the money from you and pays it out to the car on arrival at the agreed point of arrival – in real-time and transparent and incorruptible to all parties involved in the cash register. This creates the possibility not only to address problems around fraud and process terminations sustainably but with an increased degree of automation and digitally verified information, completely new use cases are created.