The Role of Blockchain based Decentralized Identity(SSI/DID) in India’s DPDP – Digital Personal Data Protection Bill

Governments worldwide are increasingly embracing the concept of "digital identity." As custodians of a wealth of personal data, including legal names, dates of birth, and citizenship information, governments possess a unique opportunity to enhance trust in both online and offline services. This can be achieved by issuing digital identity credentials to their citizens and residents, while also setting the framework for businesses and government entities to responsibly utilize these credentials.

In the realm of government-issued digital identity, trust is a multifaceted concept encompassing both technical and societal aspects. Governments cannot operate in isolation when building a resilient, privacy-conscious digital ecosystem. Collaboration with experts in technology and civil society who are well-versed in privacy considerations and technological capabilities is essential. Moreover, governments must actively engage with their citizens and residents to ensure that their needs and expectations regarding privacy implications in an increasingly digitally oriented-world are met. This collaborative approach is fundamental to achieving a successful and trustworthy digital identity landscape.

There are several legislations such as General Data Protection Regulation (GDPR) in EU, Data Processing Agreement (DPA) in the UK, The California Consumer Privacy Act (CCPA), and the Brazilian General Data Protection Law (LGPD). These legislations are changing the landscape of digital identity and the protection of personally identifiable information (PII). Recently India also approved the Digital Data Protection Bill(DPDP) 2023.

Personal data is information that relates to an identified or identifiable individual.  Businesses as well as government entities process personal data for delivery of goods and services.  Processing of personal data allows understanding preferences of individuals, which may be useful for customization, targeted advertising, and developing recommendations.

Government stakeholders are feeling the privacy implications around the digital economy in general, and more recently around government-issued digital credentials in specific. Governments themselves are looking for ways to establish effective privacy legislation while taking into consideration matters of public safety, consumer protection, and data security. Civil society similarly wants to see additional legal and technologically enforceable protections around privacy but with the additional scope to make sure those protections encompass both government and private sector actions.

What is Digital personal Data protection(DPDP) India Bill 2023?

An Act to provide for the processing of digital personal data in a manner that recognises both the right of individuals to protect their personal data and the need to process such personal data for lawful purposes and for matters connected therewith or incidental thereto.

Please check the official website of Meity & PRSIndia for a detailed Digital Personal Data Protection Bill - https://www.meity.gov.in/writereaddata/files/Digital%20Personal%20Data%20Protection%20Act%202023.pdf

https://prsindia.org/billtrack/digital-personal-data-protection-bill-2023

"The enactment of the Personal Data Protection Bill in India adds a new layer of complexity and importance to digital trust. Organizations not only have to uphold trust but also comply with stringent privacy laws, making IDM solutions and Blockchain-Based Verification essential tools for compliance."

What is Decentralised Identity? What is self-sovereign identity?

Decentralized Identity (DID) is a concept and set of technologies that aim to give individuals more control over their digital identities while reducing reliance on centralized identity providers. 

The concept of self-sovereign identity puts the individual in control of their digital identity and through verified credentials, their PII.

Decentralized Identity has the potential to improve security, privacy, and user control in online interactions, reduce identity theft, and simplify identity verification processes. It also aligns with evolving data protection regulations by putting individuals in charge of their personal information. The new operating models will revolve around digital identity management, protection of personally identifiable information, and consumer consent management

Why Blockchain-based Decentralized Identity is an ideal approach for DPDP Bill enablement

Blockchain-based Decentralized Identity, often referred to as Self-Sovereign Identity (SSI) or Decentralized Identifiers (DIDs), can play a significant role in India's Digital Personal Data Protection Bill (DPDP) by addressing several key aspects of data protection, privacy, and security.

• Irreversible Encryption or Hashing : It can be likened to a one-way conversion of original data into an unintelligible form. Even if a service possesses certain personal data, such as payment information, it becomes unidentifiable and cannot be linked back to an individual. In essence, the data is pseudonymized, providing an essential tool in the toolkit, although not foolproof or a standalone solution.

• Fine-grained Access Control: Smart contracts have been explored for capability-based access control in private permissioned blockchain networks – an individual may grant or withdraw consent to specific nodes to access specific temporal fragments of data for a pre-set duration of time.

• Self-sovereign Identity (SSI): A subset of decentralised identity, SSI is deeply focused on privacy-preservation and user-centricity, and allows individuals to present ‘verifiable credentials’ as opposed to granular personal data. As an example, online purchase and delivery of liquor require an individual to prove that they are of legal drinking age.

• Zero-Knowledge Proofs (ZKPs): ZKP is a cryptographic technique that seems counterintuitive to basic blockchain tenets but can be used by two parties (a prover and verifier) to generate consensus on something without exchanging specific data or transactional information. Think about how one can get FedEx to agree to carry a package without opening it to see what is inside. Thus, ZKP maintains the privacy of users’ sensitive information while executing a blockchain transaction even without encryption.

• Enhanced Data Privacy and Control : SSI/DID systems empower individuals with greater control over their personal data. Users can selectively share their data and credentials, ensuring that only necessary information is disclosed. This aligns with the DPDP's objective of giving individuals more control over their personal data, reducing data misuse and unauthorized access.

• Consent Management: SSI/DID enables explicit and granular consent management. Users can approve or deny data access requests, ensuring that their data is used only for the purposes they intend.

• Data Minimization: SSI/DID encourages data minimization by allowing users to provide only the specific information required for a transaction or service. This aligns with the DPDP's principle of collecting and processing the minimum amount of data necessary.

• Security and Immutable Records: Blockchain technology underpinning SSI/DID provides a secure and tamper-resistant ledger for storing identity-related information. This enhances the security of personal data. Immutable records on the blockchain help maintain the integrity of identity data, reducing the risk of data breaches and unauthorized alterations.

• Auditing and Accountability: SSI/DID systems often include audit trails and transparency features, enabling regulatory authorities to monitor data usage and access. This supports accountability, which is a key component of the DPDP's enforcement mechanism.

• Reduced Dependence on Central Authorities: SSI/DID reduces reliance on centralized identity providers and reduces the risk of single points of failure. This aligns with the DPDP's objectives of decentralizing data control and protection.

Check this IOMe by MOI Technology powered Decentralized Identity. https://iome.ai/

Personalized and decentralized identity management for the sovereign individual. IOMe is a user-owned decentralized identity and authentication solution that lets users interoperate between web2 and web3 networks. It extends MOI protocol's identity infrastructure with zero-knowledge technology to provide easy, and secure digital interactions.

MOI ID: MOI ID's decentralized identity specification is based on natural, sustainable human behaviors to facilitate participant-centric digital interactions.

However, the successful integration of SSI/DID into the DPDP would require careful consideration of technical and regulatory challenges, including standards and interoperability, legal recognition of DIDs, and addressing potential scalability issues in blockchain networks. Collaboration between government bodies, technology providers, and the private sector would be essential to ensure a smooth transition to decentralized identity systems in India's data protection landscape.

References

https://www.tcs.com/what-we-do/industries/communications-media-information-services/white-paper/digital-identity-consent-management-solution

https://yourstory.com/2020/10/blockchain-personal-data-protection-bill-technical-compliance

https://openid.net/wordpress-content/uploads/2023/05/Government-issued-Digital-Credentials-and-the-Privacy-Landscape-final.pdf

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