Blockchain-Based Decentralized Identity Verification and Management System

Abstract: Digital identity has become a fundamental component of modern digital services, including banking, healthcare, education, government services, e-commerce, and online authentication. Traditional identity management systems generally depend on centralized authorities or identity providers for storing, managing, and verifying users' personal information. Although these systems provide convenient authentication and centralized control, they introduce important limitations such as single points of failure, privacy concerns, data breaches, limited user control, and poor portability of identity information. Blockchain technology provides an alternative approach through decentralized identity management systems (DIMS) and self-sovereign identity (SSI). In these systems, users can control their digital identities and selectively share verified credentials without depending entirely on a centralized authority. Blockchain provides decentralization, immutability, cryptographic security, transparency, and smart-contract-based automation, making it suitable for secure identity verification and credential management. This paper presents a comprehensive review of blockchain-based decentralized identity verification and management systems. It examines centralized, federated, self-sovereign, attribute-based, and Know Your Customer (KYC) approaches and compares their control models, advantages, and limitations. Existing commercial solutions such as uPort, Sovrin, ShoCard, and Connect.me are also examined. The study further analyzes major security threats, including private-key compromise, Sybil attacks, eclipse attacks, blockchain reorganizations, off-chain data tampering, oracle manipulation, social engineering, metadata leakage, and regulatory compliance issues.

Keywords: Blockchain, Decentralized Identity, Self-Sovereign Identity, Digital Identity Management,Verifiable Credentials, Zero-Knowledge Proofs.