- What is blockchain and how does it work?
- The problem of identity theft in blockchain-based businesses.
- How blockchain can help companies tackle the problem of identity theft.
Blockchain’s growing popularity can be attributed to its promise of safe currency operations and elimination of identity theft.
Blockchain has an astronomical spending estimated at $20 billion annually, with the banking industry alone contributing about $522 billion. So why is everyone talking about it? Blockchain is preferred by both users and businesses because it allows user data to be stored securely.
Visualize the scale of identity theft on a global scale. Unfortunately, victims of identity theft often don’t realize it until they experience serious consequences. If an online store doesn’t take identity theft seriously, it risks losing customers and damaging its image. Blockchain gives individuals more control over their data and a more secure way to avoid identity theft.
Blockchain: what is it?
Blockchain is a network of technologies designed to securely collect user data and distribute it over the internet in chunks. A block is a network of data centers that use cryptography to conduct secure public transactions. Each transaction in the chain should be recorded on a distributed ledger.
Blockchain-based business problem: identity theft
Customers aren’t the only ones who suffer from identity theft. Internet companies are at risk as well. Cybercriminals use a variety of tactics to achieve their goals, including hacking, account takeover, and credit card theft. Below are some examples of the most typical forms of identity theft.
fake ID scam
Synthetic identity theft occurs when multiple victims’ identities are used to create a single fraudulent persona. It is common practice to combine real stolen user records with fake information to complete the operation. Criminals create new identities to engage in other fraudulent schemes. For example, cybercriminals can create fake profiles to appear affiliated with legitimate companies and use these accounts to launder money.
online shopping scam
Scammers are preying on people who shop on digital platforms, putting online purchases at risk. These online her marketplaces are populated by people of questionable origin, trying to mislead customers into providing their credit card data. With attractive offers and phishing emails, spoofed online shops can trick unsuspecting customers into providing personal information.
Identity theft in the healthcare industry
Insurance companies and hospitals must beware of cunning scammers who steal people’s medical information.
If a patient’s medical identity is stolen, the perpetrator may gain access to sensitive medical information for profit. This type of fraud often goes undetected due to the lack of fool-proof systems in place for patient registration and insurance payments.
Theft of social security numbers
Another way to commit identity theft is with a stolen Social Security Number (SSN).
A 9-digit SSN is a form of identification usually given to people at birth. Online fraud such as medical and child identity theft wouldn’t be possible without them. often do.
Avoid identity theft with blockchain
There are several ways blockchain technology can improve the security of user data and prevent unauthorized identities from being accepted into the system. Here are some examples of these:
Providing safe and sound financial transaction methods
Blockchain is commonly viewed as a potential cybersecurity solution when it comes to fighting identity theft. There are cases. A blockchain distributed ledger is an electronic database that stores transaction data. Data stored on the blockchain is protected using cryptographic technology to ensure data privacy for all users.
Safeguards must be put in place to prevent theft or system breach of any kind from occurring and they become active the moment they are discovered. You can deal with it with peace of mind knowing that it has been done.
Use an identity verification tool such as bitcoin loophole Alternatively, Chainanalysis, a blockchain distributed ledger technology (DLP), may verify a customer’s identity across various channels.
easy wall against fraud
Attackers can easily compromise centralized networks and go undetected for long periods of time. Identity verification systems are highly vulnerable to single points of failure, allowing criminals to gain access to sensitive information such as credit card numbers, social security numbers, and other personal information, which could result in hundreds of It can lead to millions of dollars in losses.
With blockchain, the situation is quite different as identity thieves have to physically travel from one place to another, which takes a lot of time and energy.
Blockchain uses public key cryptography (PKI) to build a decentralized digital network made up of individual blocks of data. A PKI is very important as it prevents widespread data breaches and protects personal identities.
Individual data title
Synthetic identities are used by cybercriminals to impersonate legitimate businesses and gain access to sensitive information such as credit card and bank account details. Banks lose millions of dollars each year due to identity theft, and the number is increasing.
Bad credit, huge credit card debt, flagging from financial authorities are all possible outcomes.
To get around this problem, blockchain technology provides public keys that can be used to initiate secure transactions between two parties. For example, when personal information such as birthdays is recorded on a distributed ledger, users are given control over their data. This provides extra protection for all your digital chats.
last but not least
Protection against identity theft is important for businesses of all kinds. Know Your Customer (KYC) and Anti-Money Laundering (AML) rules can be easily implemented via client ID verification, which also helps reduce cybercrime costs.
Businesses in the blockchain industry can add new users quickly and easily with our identity verification service. Identity verification service providers in the blockchain industry can use it to speed up the onboarding process for new customers.
By offering AI-powered IDV solutions, blockchain companies can meet global KYC and AML standards and ensure customer loyalty.