Recently, blockchain technology (“blockchain”) has been hailed as a potential solution to a variety of challenges in everything from finance to identity. While blockchain holds promise, there is still a long way to go in terms of developing broadly practical applications for the technology, especially in creating enterprise-grade, independently verifiable identity credentials.

Why the Blockchain?

In its simplest terms, blockchain is a data structure that makes it possible to create a decentralized digital ledger of transactions that is housed in a distributed network. Participants in the network collaborate to verify transactions by running cryptographic algorithms. Once the transactions are recorded on the ledger, they are very difficult to change or remove. There are variations of blockchain that all work a little differently, but the general process and mechanism remain the same.

What is the potential blockchain application for identity credentials?

Right now, your credentials, such as passports, driver’s licenses, and college degrees, rely upon a centralized authority to verify the authenticity of the data contained in the identity credential (“credential”). For example, when you apply for a driver’s license, you need multiple forms of other identification to verify that you are who you say you are. This includes government-issued birth certificates and social security numbers. The authority and trust of the government agency and their best practices, like “6-point verification” for issuing a driver’s license, is what makes those types of credentials trustworthy.

Conversely, blockchain distributes the verification process across a network, assigning a digital signature to each transaction — or in this case, to each credential without the ability to verify who issued it and to whom it was issued, due to the native format of a blockchain entry. The blockchain network then works together to verify that credential, and because the process is encrypted, it protects against fraud or counterfeiting. This effectively decentralizes the authority needed to verify credentials.

The Challenges with Blockchain

There are some potentially compelling applications of blockchain in credentialing, but presently, there are a number of critical issues in the technology that need to be addressed before it would be widely used for credentialing. One of the challenges is that while blockchain has different strengths and weaknesses, the benefits of this technology are often intricately linked to a specific use case, and unfortunately, it is not yet clear which cases are best suited for blockchains and which blockchains can be adapted to which use cases.

Another blockchain challenge is the technological savviness required of its users. Blockchains utilize public and private keys to verify transactions. In some cases, this would require users to create and manage their own keys, which may be beyond the sophistication of an average user.

That is not to say that because of these challenges, blockchain won’t be potentially useful — we are currently evaluating blockchain as a possible supplement to our current offering, TrueCred™, to enable disparate organizations to coordinate the transportation and validation of digital credentials in a more efficient and cost-effective manner. It is important to note these challenges through an open approach to developing better digital credentials.

TrueCred™: An Open and Adaptable Approach

Industry leaders, institutions, and employers need a way to ensure the high-stakes credentials they issue and review are authentic and trustworthy. And while blockchain may appear to be the complete solution, it does not address every challenge associated with issuing and verifying digital credentials, nor is there any standard body overseeing its development.

TrueCred™takes an open, adaptable approach to digital credentialing. We are advocates for, and a collaborator with, the World Wide Web Consortium ( Verifiable Claims Task Force as well as the Credential Transparency Initiative (CTI). The W3C Task Force is an international community working toward developing web standards, including regulation concerning digital credentials and the exchange of personally identifiable information contained within each digital credential. To achieve the end goal of developing and instituting a secure, standards-based technological infrastructure to support all stakeholders (credential issuers, holders, and consuming verifiers and decision-makers), we have assembled a team of advisers, technology partners, and business leaders in academics, credentials, encryption, and enterprise computing to create and institute digital credential trust.

We are designing protective curation services to best meet the long-term needs of the open badge ecosystem — independent verification, security, and portability — through creating secure, interoperable credentials while allowing the credential holder to incorporate new achievements throughout the course of their academic and professional careers. These are all necessary components for meaningful and trustworthy digital credentialing. Many companies claim to have open badges and low-stakes digital credentials, but our technology takes digital credentials beyond the badge by delivering dependable, tamper-proof credentials while giving the credential holder complete autonomy over the ability to share their credentials and co-exist along with badges.

Blockchain does have great potential to provide solutions for digital credentials, but the credentialing industry requires an open and adaptable approach to best meet the long-term needs of the open badge ecosystem — independent verification, security, and portability.