Blockchain

Rhode Island Eyes Blockchain-Based Identity Management Project

Rhode Island’s secretary of commerce wants to take a streamlined approach to resident and business identity management and hopes a centralized data lake and distributed ledger technology could pave the way.

Secretary Elizabeth Tanner told GovTech that she hopes to move away from current practices that see constituents separately provide and update their personal and business details at each different agency with which they need to interact. She hopes instead to let constituents enter their details in just one spot, and later use digital wallet apps to access their information.

Tanner envisions that a centralized data lake and distributed ledger could underpin the approach. The ideas is that a distributed ledger would securely store the data and enable a digital identity wallet, while the centralized data lake would spare agencies from holding their own separate records of a person or business’ identification details.


The state tested the distributed ledger piece in a pilot earlier this year, where the technology was used to handle certified public accountant (CPA) credentials. Now, Rhode Island looks to expand the idea further, starting by bringing distributed ledger and a centralized data lake to bear on streamlining the business registration process. It will soon release a request for proposals.

THE PILOT

Rhode Island probed the feasibility of distributed ledger-supported identity management in a pilot project that ended in June. In this trial, the state used a distributed ledger network to immutably store records of who had obtained CPA licenses.The professionals could then access their certifications on their phones, by using a digital wallet app. The app would run a check against that distributed ledger network, to confirm that a block containing the CPA’s certification existed. This approach let CPAs quickly show their certification statuses, without also having to display other identifying details.

The project, in part, aimed to make it easier for CPAs who work across state lines to prove their professional standings when handling matters like filing tax returns in other states, Tanner said.

“The pilot was focused around just proving that it could work,” Tanner said. “That proved we could retrieve a digital credential through the governmental system.”

Tanner’s department now wants to build on that idea and see if distributed ledger technology and a centralized data lake could smooth business registration processes. The aim is to streamline how business owners submit information during business registration as well as let business owners use a digital wallet to access their business license information.

“We want to expand it to being able to create a business identity associated with your personal identity and be able to perform the function of organizing your business,” Tanner said.

Rhode Island will be launching a request for proposals on that project in “coming weeks” and is open to suggestions for how to improve or change the project from what is currently envisioned, Tanner said. The state General Assembly will be looking to the outcomes of that project when considering whether to finance such services in coming years.

THE DATA LAKE SIMPLIFIED

In many states, people registering a business must provide details to the Secretary of State’s Office, the Division of Taxation and the Department of Labor and Training. But Tanner hopes to streamline this by launching a single government website where individuals could enter their basic identification details, like their names, addresses and business names. Those details would flow into a central data lake that all relevant government departments could view.

Under this plan, constituents would also use the site to submit additional, more sensitive details, which would be transmitted to specific departments rather than the data lake. For example, the Department of Labor and Training needs a business’ employee counts, while the Secretary of State needs to know its registered agent and the Division of Taxation needs the business owner’s social security number. Those agencies would separately hold and secure that information.

The new processes could reduce steps for constituents, as well as reduce confusion for government staff. When each agency has its own records on constituents, state employees may spend considerable time determining whether records with similar names refer to two different individuals or entities, or to the same person using a nickname or abbreviation.

“If my formal name of my restaurant is the ABC Restaurant, sometimes I’m called ABC’s, sometimes I’m called the ABC Restaurant,” Tanner said. “So, being able to have one identification method for a name and a business is a huge problem solver in government.”

HOW THE DIGITAL LEDGER SECURES

The second piece of the plan calls for distributed ledger technology.

“Distributed ledger is just a piece of the project,” Tanner said. “We very much use it from a souped-up Excel spreadsheet standpoint.”

Distributed ledger technology — or blockchain — stores data in chunks known as “blocks.” When a block’s storage is maxed out, the block is closed, time-stamped and attached to the last closed block in the chain, per Investopedia. The chain and time-stamping create a timeline of how a record has been updated. The blocks also cannot be reopened, thus making the information stored in them unalterable.

That immutability appeals to Rhode Island, and plans call for storing the data lake’s information in blocks. Of course, individuals’ personal circumstances aren’t unchanging, and updates to residents’ information — such as loss of a license or change in the listed name or gender — would be entered as new blocks on the chain.

Tanner also aims to use open-source technology, “so that other governments can copy what we do,” and hopes the effort can reduce fraud enough to persuade the Assembly that this approach merits continued funding.

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