Securing Online Transactions: The Role Of Blockchain-Based Decentralized Identity Management

Abstract

Blockchain technology presents a novel method of securing digital transactions and reclaiming user security and authority in digital identity management. This research investigates the potential of decentralized, blockchain-powered identity management systems in helping mitigate the challenges of centralized systems. By utilizing various research methodologies comprising a comprehensive literature review, expert-based qualitative inquiry via interviews, and a quantitative questionnaire analyzing online users, this study provides several critical insights into the rationale, benefits, and dominance of blockchain identity management systems. While the research underscores the astonishing rate of adoption in certain sectors, such as e-commerce and financial services at 75% and 65% of samples respectively, it also reveals encouraging user perceptions with over 80% of the sample either considering or strongly viewing them as secure. Moreover, the research also demonstrates the operational efficiency of blockchain-based identity management systems in reducing online fraud, with more than 70% of respondents reporting fraud reduction levels of 30% or more. However, the research also underscores severe barriers, particularly the lack of understanding at 30%, regulatory ambiguity at 25%, and complex technological realities such as integration at 20% and scalability at 10%. User-friendly solutions, interoperability, and inclusive collaboration are imperatives to overcoming these hurdles. The logistic regression further reveals that perceived security, user operability, experience, and regulatory clearance are the most influential predictors in determining adoption readiness. This study research contributes to the small but increasing research on blockchain identity technology by underscoring specific barriers or facilitators and making paths for future research. More research should investigate a specific design and implementation approach, long-term impacts, and particularly effective means of addressing existing challenges to realize universal acceptance.