The common misconceptions of blockchain-backed digital ID

Focus on some common digital ID misconceptions. Understand what a digital ID is and what it isn’t, businesses are in the race to not be left behind.

Switching to digital IDs is inevitable to enhance identity management in the digital transformation landscape. Enterprises are actively encouraging customers to use more online verification services and available applications (for example, online banking).

However, the concepts surrounding digital ID are still ambiguous. To truly bring Digital ID to life, identifying and addressing the ambiguities and concerns surrounding digital id needs to be done as soon as possible.

Below, akaChain gives some common digital ID misconceptions that misrepresent its meaning and affect its implementation process.

  • A digital identity requires highly personal information for identification

To track consumer identity, many organizations make the mistake of putting confidential personal details like full names or social security numbers in their system. This mistake is dangerous due to the prevalence of data breaches.

The digital id blockchain only stores encrypted information instead of raw information. This encryption layer acts as a barrier that protects user information from intentional or unintentional mistakes. No one knows what is inside of that cover layer to take advantage of that information.

  • Digital ID is expensive

If you are only using a physical document, a digital id will be indeed more expensive than buying new packs of paper in the present. But you need to consider the whole paper document process to be able to compare the costs and value of physical vs digital.

Digitizing your data of all documents and contracts means, no more

  • printing several copies of your contract

In reality, digital id may be expensive at first because you’re transforming your business to digital but deliver a return on investment as soon as you’re optimizing your processes: a digital ID on the blockchain can be completed, saved, and stored within a matter of minutes.

  • ID on their devices are their digital IDs

Many people think that IDs on their devices equate to their digital identity. Even though this idea doesn’t seem right and logically inappropriate, it is still one of the most common digital ID misconceptions.

People tend to switch and upgrade their devices quite frequently, and more than one person can use them, so it’s a mistake to suppose that an individual’s identity is equal to their device’s ID.

Also, fraudsters and hackers can mask computer IDs and install automatic malware that can guide specific behavior from the device of the user.

A digital ID is identification information that represents a person to access many services, such as financial, health care, education services. Reliable organizations issue it from both the public and private sectors.

Most importantly, digital ID on the blockchain has a high-security level. It can be manipulated and unchangeable.

  • Regulators and verifiers can access and save all associated personal information

With a digital ID, a citizen has far more control over their personal information than traditional identification. In each verification process, the person verifying the ID only sees the data that refers to the transaction. For example, in the case of issuing a driving license, the verifier will only know the customer’s picture and the answer of whether they’re over 18 (or 16 in some countries) to own a driving license legally.

The verifiers will not have the right to access the driver’s personal information, such as the home address. On a more technical level, a digital ID only calls up the encrypted information needed to do the transaction.

  • Personal information is more vulnerable in digital form

People should notice that a physical ID is merely a reflection of data generated along with an individual’s activities, not the endpoint of data flow.

Then think about how insecure the date of birth, address, facial resemblance and other personal information is when a wallet or plastic driver’s license is dropped and lost somewhere.

Although there’s a risk that people can lose their phones, there are many layers of protection between a citizen’s digital ID and someone else. Multi-factor authentication is necessary to unlock your phone, including PINs, fingerprints, or even a Face ID.

Furthermore, blockchain can provide an encrypted credential that has an isolated locking mechanism requiring another authentication phase. All the encrypted data can be deleted and restored remotely if anyone has access to the computer. These same guarantees are not possible to recover any physical ID once it has fallen into the wrong hands.


Digital ID on blockchain, if understood precisely, uses encryption and mathematical algorithms to secure the data of people, organizations, and accounts. It focuses on the privacy and transparency of data. So there are barriers, but we’re going in a very favorable direction.

Digital identity is not something in the future — its introduction and effects are now becoming common. All businesses and organizations must understand what digital ID is and to put in place better ways to handle the data they carry soon before it is too late.

It’s not just about fighting fraud; it’s about asserting who we are in this culture. Our activities are becoming more online, so it’s essential to solve digital ID misconceptions and change how we make it possible for people to say who they are.

To update more information on digital ID implementation and more blockchain solutions, follow us or leave your quick contact information, and we will reach you as soon as possible.

About akaChain

akaChain is backed by FPT Software, a globally leading technology, and IT services provider. It is an end-to-end, permissioned, multi-chain network based on the Hyperledger Fabric. Since Establishment in September 2018, akaChain’s product has assisted many enterprises, from SMEs to Fortune 500 firms, to transform with distributed ledger technology. The company provides a broad range of permissioned blockchain-based products and services in multiple sectors, including retail, supply chain, banking and finance, insurance, shopping mall management, etc. to transform with its distributed ledger technology. For more information, please visit

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