Blockchain and identity theft problem – how to address it

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  • Blockchain, what is it and how does it work?
  • Identity theft problem for blockchain-based businesses.
  • How blockchain helps businesses deal with the issue of identity theft.

blockchainThe growing popularity of KYC can be attributed to its promise of secure monetary operations and elimination of identity theft.

There will be astronomical annual spending on blockchain, estimated at $20 billion, with the banking industry alone contributing about $522 billion. Then why is everyone talking about it? Blockchain is preferred by both users and businesses because of its ability to securely store user data.

Imagine the magnitude of identity theft on a worldwide scale. Unfortunately, victims of identity theft often don’t find out until they face serious consequences. If online stores don’t take identity theft seriously, they risk losing customers and damaging their reputation. 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 in chunks over the Internet. A blockchain is a network of data centers that conduct secure public transactions using encryption. Every transaction in a chain must be recorded in a distributed ledger.

One Problem for Blockchain-Based Businesses: Identity Theft

Customers aren’t the only victims of identity theft; Internet companies are also at risk. To achieve their goals, cyber criminals employ a variety of tactics, such as hacking, account takeovers, and credit card theft. Shown below are examples of some of the most typical forms of identity theft.

fake id scam

Synthetic identity theft occurs when the personal information of multiple victims is used to create a fraudulent persona. In order to complete the operation, it is common for fake information to be combined with the actual user records that were stolen. Criminals create new identities to engage in other fraud schemes. For example, cyber criminals may create fake profiles to appear affiliated with legitimate companies and use these accounts to launder money.

online shopping fraud

Thieves prey on shoppers who shop on digital platforms, making online shopping dangerous. People of questionable sources populate these online marketplaces, hoping to trick customers into giving up their credit card data. With the use of tempting offers and phishing emails, fake online shops can trick customers into giving up their personal information.

Identity theft in the healthcare industry

Insurance companies and hospitals should be on the lookout for clever scammers who steal people’s medical identities.

The theft of patient medical identifying information can give criminals access to sensitive medical information that can be sold for profit. Because there is no robust identity verification system in place when registering patients or making insurance payments, this type of scam often goes undetected.

theft of social security numbers

Another way to commit identity theft is by using a stolen Social Security Number (SSN).

The nine-digit SSN is a form of identification usually assigned to people at birth. Online scams like medical and child identity theft would be impossible without them. Cyber ​​criminals often use Social Security numbers to obtain the suspect’s accounting transactions and file fraudulent tax returns.

Avoiding Identity Theft With Blockchain

There are a few ways in which blockchain technology improves security for user data and prevents fraudulent identities from being accepted into the system. Following are examples of some of these:

Providing a safe and sound method of financial transactions

When it comes to fighting identity theft, blockchain is generally seen as a potential cyber security solution. By providing a high level of security, it can help prevent personal information from falling into the wrong hands. The distributed ledger of blockchain is an electronic database that stores transactional data. Data saved on the blockchain is secured by employing encryption techniques to ensure the privacy of all users’ data.

We must have security measures in place to prevent any type of theft or breach in the system and they get activated the moment they are detected. As a result, customers of online services can behave with confidence knowing that their personal information is being protected.

ID verification tools like bitcoin loophole Or on chain analysis, Distributed Ledger Technology (DLP) in blockchain can validate the identity of customers across different channels.

Snackable Wall Against Cheating

An attacker can easily compromise a centralized network and remain undetected for long periods of time. Identity verification systems are very sensitive to a single point of failure, which could result in millions of dollars in losses by giving criminals access to sensitive information such as credit card numbers, social security numbers and other personal details.

The situation is quite different with blockchain as identity thieves have to physically move from one place to another, which takes a lot of time and energy.

Blockchain uses public key cryptography (PKI) to create a decentralized, digital network that consists of separate blocks of data. PKIs are important because they prevent widespread data breaches and protect individuals’ personal information.

Title for personal data

Synthetic identities are used by cyber criminals to impersonate legitimate businesses and gain access to sensitive information such as credit card and bank account details. Banks lose vast amounts of money due to identity theft every year, and the number of cases is on the rise.

Bad credit, massive credit card debt and flags from the financial authorities are all possible outcomes.

To overcome this problem, blockchain technology provides public keys that can be used to initiate a secure transaction between two parties. Users gain control over their data, for example, personal details such as their birthdays are recorded in a distributed ledger. It provides an added security for all your digital chats.

last but not least

Identity theft protection is important for businesses of all stripes. Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations can be easily enforced through customer identity verification, which also helps in reducing the cost of cybercrime.

ID verification services can be used by companies in the blockchain industry to quickly and easily add new users. Identity verification service providers in the blockchain industry can use it to speed up the onboarding process for new customers.

Blockchain companies can meet global KYC and AML norms and secure the loyalty of their customers by providing AI powered IDV solutions.

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