Government assistance can be essential to individual wellbeing and economic stability. This was clear during the COVID-19 pandemic, when governments issued trillions of dollars in economic relief.
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Applying for benefits can be arduous, not least because agencies need to validate applicant identity and personal identifiable information (PII). That often involves complex forms that demand applicants gather documentation and require case workers to spend weeks verifying data. The process is slow, costly, and frustrating.
It’s also ripe for fraud. As one example, the Justice Department recently charged 48 suspects in Minnesota with fraudulently receiving $240 million in pandemic aid.
The good news is that an innovative technology promises to transform identity validation is capturing the attention of government and other sectors. Self-sovereign identity (SSI) leverages distributed ledgers to verify identity and PII – quickly, conveniently, and securely.
Individual validation
Any time a resident applies for a government benefit, license, or permit, they must prove who they are and provide PII such as date of birth, place of residence, income, bank account information, and so on. The agency manually verifies the data and stores it in a government database.
Whenever the resident wants to apply for services from another agency, the process repeats. Every transaction involves redundant steps and is an opportunity for fraud. Meanwhile, PII in government databases is at risk for cybertheft.
SSI – sometimes referred to as decentralized identity – uses a different strategy. Rather than rely on centralized databases, PII is validated via a distributed ledger or blockchain. Data is never stored by the government agency, yet they can still be sure they are transacting with the right person. This approach makes the data fundamentally secure and makes identity theft virtually impossible. Once the data is initially validated, it can be trusted by every agency, every time.
SSI also puts residents in control. They decide which data to release to which agencies and can revoke access at any time. They don’t need to worry about data privacy or whom the data might be shared with. Finally, they don’t have to endure a lengthy process of gathering data and waiting for approvals.
Conceptually, SSI functions the same way in any scenario. But three use cases demonstrate its promise.
Simplifying applications
For programs that benefit families, applications can run 20 pages and take weeks to process. An example is the Supplemental Nutrition Assistance Program (SNAP). Applicants must provide details on the entire household, including dates of birth, incomes, assets such as bank accounts, and expenses such as utilities.
Many people who receive SNAP benefits are also eligible for Medicaid, Temporary Assistance for Needy Families (TANF), and the Children’s Health Insurance Program (CHIP). Without SSI, residents must manually submit the same information to each program, and each program must manually verify the information before storing it in a database.
Furthermore, benefits applications like SNAP aren’t one-off processes. Say a mother with two children suddenly finds herself a single parent with no employment. She might qualify for SNAP until she gets a job. Then she might have another child and qualify again. Without SSI, each time she re-applies, her data needs to be re-verified and re-stored.
With SSI, applicants submit their household data for verification only once. When that information is verified, each datapoint is stored in the resident’s digital wallet as a credential. When they need to share that information with another agency, it’s validated via the public ledger in minutes.
With SSI, once a credential is in the digital wallet, all programs can trust it. The process is faster and easier for both the applicant and the benefits administrator.
Preventing fraud
Government-backed loans for college, certificate, and vocational programs help residents achieve financial wellbeing and contribute to society, but they’re also opportunities for fraud. For instance, California community colleges received 65,000 fraudulent loan applications in 2021.
What’s more, institutions collect, verify, and store vast amounts of student data. When a specific department needs student data for its own needs, it often repeats the process. Meanwhile, all that data makes colleges targets for cybertheft.
SSI solves these issues. Once their identity is verified via the distributed ledger, students can release data to any institution or department. Schools can trust the data, and they no longer need to store it in their own databases. Plus, identify theft and loan fraud become virtually impossible.
The student’s digital wallet can expand over time with relevant data such as course credits, grade point averages, and degrees. Once the data is verified, it remains trustworthy – even if, say, the school that issued a degree no longer exists.
Medical marijuana access
More than 30 U.S. states and territories have legalized cannabis products for medical use. To access medical marijuana, patients typically require a medical marijuana card.
The process normally starts with a doctor’s prescription. The patient then applies to the state for a card. Once the card is issued, the patient presents it at a dispensary to purchase a cannabis product. In cases where the patient isn’t mobile, a caregiver is authorized to make the purchase.
SSI streamlines and provides assurance throughout this process. The state can trust any patient identity or PII already verified via the distributed ledger. The doctor’s credentials can be validated in the same way. Prescriptions and authorized caregivers can be stored as patient credentials.
The dispensary needn’t worry about being held liable for accepting a fake medical marijuana card. In fact, once patient data is validated in the distributed ledger, no party in the supply chain needs to independently verify it.
For residents, SSI provides control over PII and eases worries about confidentiality. For governments, it streamlines data verification and strengthens cybersecurity, saving significant time and cost. For both, it can build trust and enable easier access to services that benefit individuals and communities. Ultimately, SSI promises to transform how people and organizations manage sensitive data across a multitude of use cases.
About the essayist: Piyush Bhatnagar, Vice President of Security Products and Platforms at GCOM Software. A graduate of Cornell University, Bhtnagar received his MBA in General Management and Strategy from Cornell’s Johnson Graduate School of Management. In addition he holds Masters Degree in Science (Computer Science) from Allahabad University as well as a Bachelor’s Degree in Science from University of Delhi.
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