Next Possible Use Case for IOTA: Blockchain Technology Paves the Way for Verified Citizen Identities in China

• China’s Blockchain Service Network (BSN) has launched its RealDID system.
• With IOTA’s Tangle technology, the protocol can effectively power the RealDID System.

China’s Blockchain-based Service Network (BSN) has announced the development of RealDID, a real-name decentralized identity system, utilizing blockchain technology to verify the identities of its 1.4 billion citizens. This system mirrors the next possible use case for IOTA.

RealDID Implementation and Concerns

As highlighted in a recent report, BSN, run by China’s National Information Center in collaboration with major tech players such as China Mobile and China UnionPay, unveiled RealDID as the world’s first national-level decentralized identity system.

This system allows users to register and log in to websites anonymously using Decentralized Identifiers (DIDs) and private keys. The objective is to ensure that personal information remains disconnected from business data and transactions, addressing concerns related to data privacy.

The RealDID initiative is a response to China’s Ministry of Public Security’s push for enhanced credibility and public supervision. Notably, China’s top social media platforms, including WeChat, Sina Weibo, Douyin, Kuaishou, Bilibili, and Xiaohongshu, mandate content creators with substantial followings to publicly display their real names or those of their financial backers.

Ultimately, RealDID aims to provide a more secure and private alternative for users, aligning with global trends in digital identity management.

The country’s blockchain innovations are stirring waves in the global scene. CoinDesk reported on a bipartisan U.S. bill aimed at banning federal government officials from using China-made blockchains and transacting with certain companies, citing potential national security risks and data protection concerns. The geopolitical implications of China’s adoption of blockchain technology for citizen identities are evident, with concerns about data access and privacy becoming central to the discourse.

However, the geopolitical situation surrounding China’s blockchain technology is fast expanding. This is demonstrated through the recent removal of China’s Institute of Forensic Science from a trade sanctions list by the U.S., reflecting the subtle dynamics between the two nations.

Meanwhile, China’s efforts to establish a digital yuan and a similar Central Bank Digital Currency (CBDC) are gaining momentum, challenging the dominance of the US dollar in global transactions.

The IOTA Foundation’s Contribution

IOTA distinguishes itself from traditional blockchains through its Tangle technology. Unlike conventional blockchains that rely on a sequential chain of blocks, IOTA’s Tangle operates as a Directed Acyclic Graph (DAG). This structure allows for faster transaction confirmations and scalability, making it an ideal candidate for China’s RealDID.

IOTA, recently introduced Identity 1.0, a decentralized identifier mechanism that empowers users with full ownership and control of their digital identities. Tested extensively on the Shimmer staging ground, this upgrade revolutionizes the generation, updating, and conflict resolution of DIDs, incorporating Alias Outputs for interaction with other Layer 1 network hosting tokens.

Additionally, IOTA’s Stardust protocol upgrade, seamlessly integrated into the wider IOTA network, introduces a potent tokenization framework. Users can now create distinctive tokens directly on the Layer 1 tangle, expanding IOTA’s capabilities beyond mere tokenization to advance the digital space.

IOTA’s recent expansion into the Middle East, Africa, and Asia, marked by the establishment of a foundation in Abu Dhabi, demonstrates a deeper commitment to fostering a compliant and multifaceted blockchain ecosystem globally.