Business is leveraging blockchain to modernize verification workflow | Opinion

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Identity verification is a fundamental part of everyday activities. People need it in banks, workspaces, educational institutions, and healthcare facilities. However, the traditional identity verification system is broken due to error-prone mechanisms, long delays, data silos, and non-compliance risks.

Traditional identity verification is plagued by errors, delays, and disjointed data systems, leading to rising identity theft and poor user experiences with repetitive Know Your Customer (KYC) checks. According to the U.S. Federal Trade Commission, there were over 1.1 million reports of identity theft in 2024, resulting in fraud amounting to $12.5 billion.

The situation becomes even more dire with technologies like AI-generated deepfakes, which have made it easier to create fake IDs that bypass verification systems. For example, AI-driven tools like OnlyFake created realistic fake documents for as little as $15, causing havoc within financial systems and crypto exchanges. Victims of identity theft often experience severe emotional and financial consequences, with up to 25% contemplating suicide and 70% repeatedly targeted by cyber criminals.

By leveraging decentralized technology, blockchain-based systems offer a revolutionary way to address these issues. Blockchain lets users encrypt data off-chain, store verification hashes on-chain, and maintain complete control over their personal credentials. This approach ensures compliance, reduces user friction, and prevents data breaches.

For businesses, blockchain solutions provide affordable, automated, and auditable processes, enabling seamless verifications while protecting against deepfakes and fraudulent activities. By eliminating repetitive KYC checks, businesses can improve the customer experience and streamline operations.

From startups to enterprises, blockchain has demonstrated its democratic potential, allowing organizations to customize daily operations based on their needs.

Small businesses can utilize blockchain-based solutions to achieve enterprise-grade capabilities at a fraction of the cost, automating repetitive tasks and focusing on key operational priorities. Mid-sized companies benefit from scalable systems that grow with expanding teams and infrastructure, while large enterprises leverage custom APIs, multi-party audit trails, and real-time reports for advanced compliance.

The legacy verification system disproportionately affects the 2.6 billion underprivileged population who lack access to the internet or modern identity services. Without these systems, their ability to prove ‘who they are’ is severely limited.

Blockchain-based solutions empower individuals by offering digitized, encrypted identity systems that can be shared securely with relevant authorities. By minimizing intermediaries and data theft risks, these systems bolster security and privacy, paving the way for a more inclusive global ecosystem.

The adoption of blockchain is reshaping how businesses approach compliance and user experience. Unlike traditional systems, blockchain allows users to maintain sovereign ownership of their data, share verified credentials seamlessly, and reduce operational bottlenecks during onboarding. This innovation also aligns with regulatory obligations, creating harmony between businesses and compliance frameworks.

As AI-driven scams and identity theft continue to grow, blockchain provides a robust solution for verifying credentials across employment, education, and healthcare, reducing the risks associated with repetitive manual verifications.

The U.S. inventor and philosopher R. Buckminster Fuller once said, “Humanity is acquiring all the right technology for all the wrong reasons.” At a time when deepfakes and identity theft loom large, blockchain offers a beacon of hope for both users and organizations. By enabling secure, efficient, and democratic identity verification, blockchain demonstrates how technology can be harnessed for all the right reasons.

Notable leaders like Zain Zaidi, CEO of TransCrypts, continue to advance the field. Backed by firms like Mark Cuban, Pantera Capital, and Lightspeed Faction, Zaidi’s company partners with 450+ enterprise clients to authenticate digital records and combat AI-generated fakes, ensuring a future of trustworthy digital identity systems.