What’s Your Age? Say It Without Revealing The Birthdate
By using zero-knowledge proof, or ZKP, that works within a blockchain framework, individuals can prove eligibility, domicile, or compliance without exposing sensitive information like PAN or Aadhaar card details, minimising the risk of data misuse.
It’s common for con artists in India to illegally use the credentials of other people to commit financial fraud.
On December 25, the Ambernath (Maharashtra) police registered a case against a woman and her associates for cheating several job seekers by misusing their personal documents and carrying out financial transactions worth nearly ₹35 crore in their names.
Just a week before that, on December 19, cops in Gurgaon arrested a bank employee who helped open accounts using the Aadhaar and PAN cards of different people without their consent. The accounts were later used by a cyber fraud gang.
In both cases, the documents and credentials of unsuspecting individuals were fraudulently used. And these are just two of the hundreds of similar cases reported every year in the country.
The reason this keeps happening is that there’s no dearth of valid identity-proof documents floating around in the system. All because to prove even a small thing about us, we share important documents without any reservation.
For example, a copy of the PAN card to prove your date of birth, a copy of the Aadhaar card for address proof, and pages of documents to prove compliance.
Over time, this practice of excess sharing has been normalised, though the one sharing is aware that it carries some serious risks.
OTP-based identity authentication through Aadhaar has, no doubt, helped us to some extent, but the scope of that convenience is limited.
So, what’s the solution?
Proving Age Without Birthdate
Whether it is an insurance policy, a financial product, or a digital service, there is a common request: share your date of birth. Often, that detail is presented along with other identity information and gets stored somewhere.
But if you look closely, you’d know that the system is really not interested in the date of your birth. It only wants to check whether you meet certain conditions or not or whether you are above or below a certain age threshold.
There is a way to convey that information to the service provider without offering any personal details. It’s called zero-knowledge proof (ZKP), a cryptographic tool that works with blockchain technology.
The idea is to prove that something is true without revealing how and why it is true. The verifier gets a system-triggered green light, and the person proving it gets to keep the specific details to himself.
With ZKPs, a person can prove that they meet the required age threshold without revealing a date, says blockchain and AI expert Nikhil Varma of Algorand.
In a recent LinkedIn post, Varma wrote: “The core idea of a zero-knowledge proof is proof without disclosure. It's a way to verify information without revealing the information itself.”
A system like this already exists for EU citizens, residents and businesses, and it’s called EU Digital Identity Wallet.
The wallet allows them to prove who they are, and safely store, share and sign important digital documents. They can access services without exposing full personal records.
A similar identity-management system works in Switzerland as well, which enables citizens to wield government-issued credentials in mobile applications, offering the autonomy to select the data they disclose when accessing services.
In India, a system like this is extremely important because age-based eligibility is everywhere.
Using ZKPs instead of data makes things a little more secure. Service providers no longer need to collect more than they require, and individuals do not need to overshare.
Taxes Without Invoices
Now, let’s look at tax compliance. Businesses are required to prove that they have filed returns correctly and paid what they owe. To do that, they are required to share detailed transaction data and information that goes far beyond the question being asked.
It’s like answering a Yes-or-No question with a detailed write-up running into 500 words.
ZKPs allow a business to answer that question in a specific manner. That way a company can prove that its tax calculations are impeccable and the returns are consistent and timely without giving out details of individual invoices or commercial relationships.
In a system as large as India’s tax framework, any reductions in data sharing can have a big impact because it reduces the risk that someone might misuse that data in any way.
Final Words
What connects these examples is not technology, but a different approach to the way critical information is shared and trust is established.
For years, verification has meant disclosure, but ZKPs that work on blockchain are capable of breaking that pattern.
Oversharing has its own risks, and it puts individuals and businesses at risk, and it creates liabilities for institutions that collect the data. But this blockchain-based system shows there is a way to work around it.
You prove what needs to be proven. Nothing more.
This series is brought to you in partnership with Algorand.
