Using Decentralized Digital IDs and Blockchain to Help Identify Millions in Africa – Interview with Bitcoin News

With a population of over 1.3 billion, Africa accounts for over 16% of the world’s population. However, the continent is still falling short when it comes to providing its residents with legitimate or government-issued identification. As some studies have shown, up to 400 million Africans do not have the appropriate identification documents.

Lack of required documents leads to problems

Unfortunately, the lack of a national identification document prevents many from accessing financial services, attending national referendums, or even traveling across national borders. To reduce the number of people in this situation, an African technology start-up, Flexfintx, created a virtual solution to the challenge – digital IDs.

To understand how digital IDs can potentially overcome the lack of identification challenge, Bitcoin.com News interviewed Victor Mapunga, the CEO and co-founder of Flexfintx, via email.

Bitcoin.com News (BCN): First of all, can you briefly tell us what motivated you to start this business?

Victor Mapunga (VM): When I returned to Zimbabwe in 2018 I tried opening a bank account with a local bank and was surprised that I couldn’t just show them proof of residence, a document required to open an account that most people do most do not have and which is difficult to prove.

I went from bank to bank collecting registration forms, and they all required hard-to-prove documentation. I spent the next few months doing research and asking people in banking halls how long it would take them to open a bank account. For some it was months as they lived in the country and had to commute back and forth when documents were missing.

I also learned later that over 400 million people in Africa are facing this challenge and are excluded from the wider financial ecosystem. This is how Flexfintx was born.

BCN: Why do you think digital identities are the panacea to this global challenge of using or lacking identification documents?

VM: Manual reviews are expensive and time consuming, while performing KYC is considered too complex and risky for users in emerging markets like Africa. As a result, financial institutions, crypto and fintech companies are leaving this market segment.

Digital IDs like the one we developed – Flex ID – are completely decentralized in contrast to conventional ones, whereby only the user has full control over his data. This decentralized approach makes it easier for multiple institutions to review information without having to develop multiple integrations with different service providers. The use of this ID drastically reduces the verification effort to negligible sums.

BCN: What other advantages do digital identities offer?

VM: A digital identity wallet like Flex ID is able to store multiple credentials from e-KYC credentials, health records, prescriptions and academic credentials with a single application that is interoperable and completely autonomous. This means that one user can perform multiple reviews at different organizations without having to submit extensive documentation.

Blockchain-based IDs compared to traditional systems

BCN: Can you explain how blockchain technology is tied into the digital identity solution you are offering?

VM: We have a Layer 2 network built on top of the Algorand blockchain called the Flex Network (FN). Each issuing agency and verifier organization must either run or use a SaaS API to interact with an FN node. The node acts as a trusted way to create, update and retrieve information about digital identifiers (DIDs) from the blockchain. This allows verifiable credentials to be independently issued and verified against the public keys associated with the issuer and owner DIDs.

The core technology that enables us to build a self-sovereign identity is the DIDs, and these are essentially a data format that assigns unique identifiers to a set of public keys. A decentralized key management system (DKMS) on the blockchain enables us to run a global, shared, immutable ledger of DIDs and associated public keys to enable independent cryptographic verification of digital signatures.

BCN: The concept of digital identities is not very new and there are already players in this field. What makes your start-up different from the competition?

VM: The naive solution is digital identity, but history has shown that central data stores are high quality hacking targets and, if leaked, can affect millions of users. Flex ID is a self-sovereign digital identity, which means that the digital identity is fully owned and controlled by the user / item being referred to. Flex ID enables users to securely exchange their credentials and gain access to services without third party intervention. Analogous to a real wallet, it contains credentials such as driver’s licenses, ID cards, country certificates, etc.

Issuing digital credentials is safer, cheaper, and lightning faster than physical ones, which are prone to counterfeiting. Physical credentials are expensive to issue and manage, and take weeks if not months.

Digital credentials verification is more trustworthy, cheaper, and faster than physical credentials because it allows verifiers to bring more customers on board and expand their service offerings with less risk because digital credentials cannot be forged.

Possession of digital credentials enables owners to access services digitally and remotely without having to go to personal offices that are only present in large urban centers. They are also self-sufficient and recoverable so that users cannot accidentally lose or corrupt their credentials.

WEF recognition

BCN: Your company, Flexfintx, was recently recognized by the World Economic Forum as one of seven African tech start-ups “shaking up the global tech ecosystem”. What does this mean for what you want to achieve?

VM: We are very honored to be selected as Tech Pioneer in this year’s cohort by the World Economic Forum. We are particularly proud to be the first Zimbabwean company ever to be on the list and the only one to represent southern Africa. We see it as a vote of confidence in the region’s ability and efforts to develop global problem-solving solutions and a thriving startup ecosystem.

As part of Tech Pioneers, we would like to contribute to the goals of the forum, involve other global stakeholders in the blockchain space and use the platform to share our experience of developing solutions in the emerging world.

BCN: Who do you think is the ideal candidate for this solution you are offering?

VM: Financial organizations, crypto exchanges, insurance and healthcare companies. Virtually any startup looking to access the broader African marketplace will have access to Africa’s Identity API through Flex ID.

Do you agree that technological solutions such as digital IDs can help reduce the number of people without IDs? Let us know what you think in the comments section below.

Photo credits: Shutterstock, Pixabay, Wiki Commons

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