Securing Digital Services in Bangladesh: A Decentralized Identity Verification Framework Using Blockchain and Cryptography

Abstract

In today's digital environment, secure and trustworthy identity management is critical as centralized systems remain vulnerable to data breaches, identity theft, and unauthorized access.This paper presents a blockchain-based decentralized identity verification framework that enhances data security, privacy, and user control by eliminating reliance on centralized authorities.The proposed system integrates smart contracts, decentralized identifiers (DIDs), and cryptographic security to enable tamper-resistant and transparent identity verification.Sensitive user documents are encrypted using AES-256-GCM and stored off-chain on IPFS, while only cryptographic hashes and verification records are recorded on the blockchain to preserve privacy and data integrity.Key management is strengthened through HKDF-based derivation, and users can selectively disclose identity attributes using privacy-preserving techniques.Experimental analysis indicates that the system significantly reduces identity fraud, improves verification accuracy, and enhances auditability and scalability.The solution is well-suited for applications in finance, healthcare, e-governance, and secure third-party authentication platforms.