BLOCKCHAIN-BASED DIGITAL IDENTITY VERIFICATION SYSTEM FOR E-COMMERCE

Abstract

A blockchain-based digital Identity verification systems play a crucial role in ensuring secure and trustworthy digital transactions by authenticating users before granting access to services. They prevent fraud, unauthorized access, and identity theft, which are prevalent in online platforms, particularly in e-commerce. Historically, identity verification was based on physical documents such as passports, national IDs, and driver’s licenses, requiring in-person verification. With technological advancements, centralized digital verification systems emerged, utilizing databases managed by governments, financial institutions, and third-party authentication providers. However, centralized models face issues such as data breaches, identity theft, and a lack of user control over personal data. Examples include banking KYC (Know Your Customer) systems, email-based authentication, and social media logins, all of which store user data on vulnerable centralized servers. The need for a more secure, transparent, and user-controlled verification process has led to the adoption of blockchain technology. Growing concerns over data privacy, increasing cyber threats, and the inefficiency of centralized authentication systems drive the development of a blockchain-based identity verification system. Centralized models expose users to identity fraud, unauthorized access, and privacy violations, as they depend on third parties to store and manage sensitive information. The proposed system leverages blockchain’s decentralized nature to store identity data securely, ensuring immutability and transparency. Users maintain full control over their information through cryptographic keys, reducing reliance on intermediaries. Smart contracts facilitate authentication without exposing personal data to external entities, preventing fraud and unauthorized access. Blockchain-based verification enhances security, eliminates single points of failure, and provides a seamless authentication mechanism for e-commerce platforms, strengthening trust between buyers and sellers while reducing operational risks and costs.

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