How This Startup’s Blockchain Technology Applications in Estonia Verifies Online Identities
Nicholas Otieno Sep 28, 2019 06:50
There are so many problems in the world. I’m sure you can name them. But here is another one: online identity fraud, which is rampant these days. It’s common, threatening everyone doing business online, especially businesses involving their activities in banking/financial services, online payment services, real estate, insurance, travel, and online market industries. Now, let's take a look at how this Estonian startup utilizes blockchain technology to help protect businesses and their clients from online identity fraud.
The greatest barrier for migrating several services online is the ability to verify users’ identities and secure data of that service. Today, online verification relies on a password or the application of dual-factor authentication.
But the challenges of these techniques are that passwords are highly insecure while dual-factor authentication relies on sending code over SMS or a third-party service.
Thus, blockchain emerges as a solution to this problem. Today, blockchain is utilized to handle the ledger for a 10 billion-dollar currency. The same cryptographic principles are being used for authentication.
You may have thought about how identity verification on online platforms such as Uber, Airbnb, and many others work.
Veriff is an Estonian-based startup that was established after realizing that businesses don’t have a handle on online identity checks. Now, Veriff assists businesses of all kinds in verifying the person behind the account.
Recently, BVG (Berlin public transport firm) partnered with Veriff. It’s a huge, lucrative deal that the transportation firm will use Veriff to conduct verification of the identities of its customers in its transport app. The app will cover the while of the public transportation system in Berlin, including ride-hailing, bikes, scooters, and car-sharing, including traditional taxis.
Due to the nature of this recent business partnership, let’s see how this startup’s blockchain technology applications in Estonia functions to do business.
Mission-Based on The Company’s Mandate
It’s easy for someone to pretend to be somebody else online. If successful organizations are vulnerable to this fraud, smaller businesses are at higher risk. This early experience implanted the seed, which influenced the establishment of Veriff. The company was founded because of the need to identify fraud and verify real people.
Business Development Agenda
The firm has popped up on the international radar and grown immensely because it was formed on a foundation of offering real solutions to businesses. It was established in 2015 with 18 employees.
Now the firm has over 300 workers and serves over 190 nations as the gold standard for online identity verification. The organization assists in verifying people’s identities in many industries across the world.
Through business development goals, Veriff looks forward to working with businesses under banking/financial services, online payment services, real estate, insurance, travel, and online market industries. These are major industries that require verification of customers’ identities.
Harnessing the Blockchain’s Potential
As part of its blockchain technology applications in Estonia, Veriff started to exploit the potential of the blockchain and create various services using the technology. The core of blockchain verification is a blockchain ID. Such ID is a block of data on the chain which can be both authenticated by any third party and can indicate necessary information like date of birth.
Elliptic Curve Digital Signature Algorithm (ECDSA) is the secret to such verification. When an ID is added to the blockchain, by default an identification providing service links a public key and therefore transfers the private key’s ownership to the user.
This allows the user (only the user) to sign a signature that can be verified against the public key stored within the blockchain. Such a user’s identification serves as a decentralized source of authentication. It is a single-sign-portal that any app can gain access to while any single entity not owning it.
A protected app will only have to require an ID and a digital signature from a user requesting access. Then, the app can verify that the signature is valid and verifies the ID of the users who they say they are.
Solution for Businesses
If you engage your activities in any business operation, then you’re aware that the key to success is to keep eyes in the numbers. However, it’s not adequate to have positive cash flow; the funds also should be clean. In other words, the funds must be accountable and legitimate, up to an audit’s scrutiny.
In today’s fast-moving and dangerous world, dirty money could put you into a major problem. No business wants to have a bad reputation or incur hefty fines because of associating with money laundering, terrorism, and fraud. A key to prevent these troubles is knowing your customers. This implies having an efficient system to verify the identities of your clients or customers.
Cross-border transactions have become a norm, and this means there is a great need for verification of identities. Veriff came into the market to provide amicable solutions to these problems.
This technology is becoming more important as currently, US businesses lose an estimate of $32 billion to fraud. Such great losses occur because of the terrible insecurity of our identification systems.
This explains the reason businesses are looking for Veriff’s decentralized system to secure their identities and data. As the service provider based its blockchain technology applications in Estonia, Veriff uses blockchain technology to provide multi-factor authentication to businesses. This serves to add an extra layer of security to online applications.
Blockchain provides tools to crypto users to have their own bank. The technology has categories of identity verification needed to unlock services and products. As businesses develop more sophisticated products to fulfill this mission, verification of identity becomes important to serving users with the perfect experience.
The company slowly introduces businesses to the benefits of the blockchain. The entire process is easily automated since it only requires a user to create an ID and download an app that handles the essential authentication handshakes.
Final Thought
The company’s blockchain technology applications in Estonia use the ID of the blockchain as a viable solution to help businesses solve the task of verifying users who they say they are. With the technology, the company enables businesses to run their own apps to enable their users to add data to the chain as proof of transaction, without giving away the transaction’s original data.
Either party can verify a document against this entry and demonstrate that it’s valid, thus enabling reliable and fast audits of data.
Several businesses already have partnered with Veriff or with other service providers to securely verify data while not disclosing the original data. Veriff provides solutions that can mitigate risks by assisting in detecting fraud while complying with know your customer and anti-money laundering regulations.
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