Blockchain-Based Identity Verification System for Secure Digital Transactions

Thesis Abstract

The increasing reliance on digital platforms for financial and personal transactions necessitates robust mechanisms to ensure secure and trustworthy identity verification processes, particularly amidst rising cases of identity fraud and data breaches. This study addresses the critical challenge of enhancing security in digital transactions by exploring the application of blockchain technology to develop an innovative identity verification system that ensures data integrity, decentralization, and user control over personal information. The primary aim is to design, implement, and evaluate a blockchain-based identity verification framework that improves security, privacy, and operational efficiency in digital transactions. Specific objectives include assessing the security advantages of blockchain, evaluating user acceptance and usability, and comparing the proposed system’s performance with existing identity verification solutions. A mixed-method research design was employed, combining qualitative and quantitative approaches to provide a comprehensive assessment of the proposed system. The study targeted a population of 500 finance and digital platform users within metropolitan areas, using stratified random sampling to select a sample size of 150 participants for quantitative analysis, complemented by ten in-depth interviews with cybersecurity experts, platform administrators, and end-users to gather qualitative insights. Data collection instruments comprised structured questionnaires, designed based on the Technology Acceptance Model (TAM) and the Unified Theory of Acceptance and Use of Technology (UTAUT), and semi-structured interview guides. To enhance validity and reliability, pre-testing and pilot studies were conducted, with Cronbach’s alpha coefficients exceeding 0.8 for questionnaire scales. Quantitative data were analyzed using descriptive statistics and inferential techniques such as regression analysis to determine the influence of perceived ease of use and security on user acceptance. Comparative analysis between traditional and blockchain-based systems was performed using t-tests and ANOVA, while thematic analysis was applied to qualitatively derived data to identify recurring themes related to user perceptions, trust, and system usability. The study also employs blockchain-specific analytical frameworks to evaluate the integrity, transparency, and decentralization of the proposed solution. Expected findings include that the blockchain-based identity verification system offers superior security features, such as immutable records and controlled access, reducing fraud risks significantly compared to traditional methods. It is anticipated that both users and administrators will demonstrate high acceptance levels based on perceived benefits, including enhanced privacy and operational efficiency. Furthermore, the system is expected to reduce verification processing times and costs, with regression analysis indicating strong positive relationships between perceived security and user acceptance. The research makes a significant contribution to knowledge by providing empirical evidence on blockchain’s effectiveness for identity management in digital environments, developing a scalable framework adaptable to diverse sectors, and extending existing theories such as TAM and UTAUT within the context of blockchain technology adoption. The study also offers a validated prototype that can inform policymakers, platform developers, and cybersecurity practitioners seeking to implement secure digital identity solutions. The main conclusion emphasizes that blockchain technology can fundamentally transform digital identity verification processes by ensuring enhanced security, user autonomy, and operational efficiency. Based on the findings, it is recommended that digital platforms incorporate blockchain-based identity systems, and policymakers develop regulatory frameworks to support their adoption. Future research should explore long-term usability, cybersecurity threats, and the integration of emerging technologies such as biometrics and artificial intelligence to further optimize blockchain identity solutions.