Tokenisation solution for reliable digital identity management, By Inyene Ibanga

The global recourse to digital identity tokens is borne out of the need to solve the problems associated with traditional identity systems – inaccessibility, insecurity, the high risk of attack, and ease of breach. Blockchain identity tokens enable more secure identity management systems by eradicating current identity issues…

The growing digital transformation has caused an enormous rise in digital transactions across several industries worldwide.

Today, there is an escalation of security threats, sophisticated hacking, authentication/identity theft, and identity-related operations.

This is largely a result of the rapid transition from the traditional to the digital ways of conducting economic and social activities.

Many individuals, governments, and private organisations have fallen victim to these fraudulent schemes by cybercriminals who steal and abuse the digital identity of internet users.

Digital identity is the information used by a person to identify themselves and gain access to a computer, network, or digital platform.

It contains social security numbers, vaccination codes, biometrics, and other personal information, as available proof of a person’s identity.

It is usually regulated by government identity schemes for corporate registration, and access to financial and social services in banking, government benefits, health, education, and transportation.

But with the increasing incidence of data breaches and privacy invasion, internet users are searching for a reliable method of protecting their online identities.

Consequently, various tech companies have begun looking towards the deployment of blockchain identity tokens as a viable solution to these problems.

The global recourse to digital identity tokens is borne out of the need to solve the problems associated with traditional identity systems – inaccessibility, insecurity, the high risk of attack, and ease of breach. Blockchain identity tokens enable more secure identity management systems by eradicating current identity issues, as indicated above.

Fake identities are used to perpetrate counterfeit interactions, fraud, inflated numbers, loss of revenue, and disinformation.

In its explainer, NIMC said NIN tokenisation helps to protect an individual’s data privacy through the use of an encrypted, coded representation (“disguised”) version of the NIN, instead of the actual NIN, in day-to-day transactions.

Ironically, in our digitally-driven world, many countries are yet to adapt and integrate digital identity into their systems and processes.

However, the Thales Group reports that there is a worldwide increase in the number of national identity programmes launched or initiated that include biometrics, in the form of fingerprints and facial recognition to confirm data sets.

Australia, the United Kingdom, Germany, Canada, Denmark, and Estonia are among the growing list of countries using digital technology throughout their national identity lifecycles.

New national digital ID projects are coming on in many other countries, including Algeria, Belgium, Cameroon, Nigeria, Ukraine, Poland, Zambia, Jamaica, and Sri Lanka, just to mention a few.

Meanwhile, the World Bank, through its Identification for Development (ID4D) initiative, is helping countries realise the transformational potential of digital ID and civil registration ecosystems.

The target of the ID4D initiative is to provide everyone on the planet with a legal digital identity by 2030.

Already, it has committed more than $1.5 billion to finance the implementation of digital ID geared to accelerating inclusive growth, achieving a broad spectrum of development outcomes, and enabling all people to access sufficient quality services and exercise their rights.

A recent report by global research and consulting firm, Frost and Sullivan, predicts that tokenised digital identity will redefine security and identity recognition by 2030.

The firm stated that “progressive advancements in blockchain technology, artificial intelligence, and biometric systems have led to the creation of unique and sophisticated digital identity global solutions.”

Similarly, a Juniper Research report has analyses that “civic identity apps, where government-issued identities are held in an app, will account for almost 90 percent of digital identity apps installed globally in 2025.

Adoption of Virtual NIN Tokens

Recently, the Federal Government introduced digital tokens to replace the National Identity Number slip issued to enrollees by the National Identity Management Commission (NIMC), to ensure the privacy of users’ personal information by reducing incidences of illegal retrieval, usage, transfer, and storage of NIN.

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…governments and the organised private sector must consistently and proactively determine to successfully implement a sustainable digital ID scheme to enable everyone to have painless access to online services… 

The Minister of Communications and Digital Economy, Isa Pantami, while listing some of the benefits of the digital tokens, said it will ensure that no third party can carry out any verification without the knowledge of NIMC.

Another unique feature of the digital NIN token is that a token generated for one company cannot be used by another company because it is merchant-specific and expires 72 hours after it is generated.

In its explainer, NIMC said NIN tokenisation helps to protect an individual’s data privacy through the use of an encrypted, coded representation (“disguised”) version of the NIN, instead of the actual NIN, in day-to-day transactions.

It added that user IDs, QR codes, and verification log details on the NIMC Mobile ID App are all types of NIN tokenisation in that they all hide the NIN of the user.

According to the commission, this Virtual NIN is a tokenised version of the person’s actual NIN, which another party verifying the number cannot retain and use in a way that puts the individual’s data privacy at risk.

Apart from ensuring the democratised access to essential services that are prevalent online, digital identity can help to enable equal access to basic administrative resources.

In addition, the potential of digital identity to enhance growth and a more inclusive economy should not be overlooked.

As such, the need for Nigeria’s leading IT regulatory organisation, the National Information Technology Development Agency (NITDA) to support NIMC to achieve a strong identity verification system is crucial.

Also, governments and the organised private sector must consistently and proactively determine to successfully implement a sustainable digital ID scheme to enable everyone to have painless access to online services.

Without doubt, the successful implementation of the national digital ID in Nigeria would help more citizens to acquire secure and simple access to online services.

Inyene Ibanga writes from Wuye District, Abuja; email: inyeneibanga@yahoo.com.