The blockchain identity management company ShoCard Inc. announced Tuesday that it has raised $4 million in funding to roll out an enterprise version of its technology called ShoBadge.

The California-based distributed-ledger company started its foray into using blockchain technology for identity management in the consumer sector with its launch in 2015. Using its technology, customers could store usernames, identity cards and other credentials on a distributed ledger system accessible via mobile devices, which allows them to forgo carrying extra cards or papers.

Now the company seeks to bring that technology to the enterprise by allowing businesses to digitize employee credentials with ShoBadge. The new product eliminates the need for usernames and passwords for network and physical authorization. Instead, it uses a blockchain-based digital authentication process.

Blockchains, or cryptographic distributed ledgers, can be used to store transactional information in an encrypted, tamperproof format that can be relied upon as a trustworthy source. In the case of ShoCard and ShoBadge, a blockchain is used to share information in a way that it can remain private to outside viewers but can still be independently verified as authentic. Information exchanged using the blockchain is protected by private key cryptography, making it safe from compromise, so it’s potentially an ideal solution for enterprise security.

This funding round raises ShoCard’s total investment capital to $5.5 million. The investment round was led by existing investors, Morado and AME Cloud Ventures, with new participation from Storm Ventures, Danhua Capital, Correlation Ventures, Recruit Strategic Partners and Robert Tinker, founder and former chief executive of MobileIron.

“Eliminating usernames and passwords at the enterprise level will close the security gap in organizations’ cyber defenses,” said Armin Ebrahimi, founder and chief executive officer of ShoCard. “Large databases filled with this sensitive information will no longer be necessary, and weak passwords, easily exploited by hackers, will no longer exist.”

Ebrahimi said ShowBadge would build on ShoCard’s already tested verification and enrollment tools that use mobile devices along with blockchain technology to open up the next generation of identity management.

With ShoBadge, enterprise security officers can more readily issue, update, revoke and track user roles, authorization, permissions and other types of access through a consolidated approach to secure identity management. To do this, ShoBadge seeks to create a practice of identification approach that allows identity management to be controlled by individual users, but verification and authorization continue to remain the purview of management and security staff. Identity information is encrypted on user devices, but when an employees choose to share that information with their employers, a blockchain acts as an inedible ledger to verify that information and ultimately grant access to authorized employees.

With this method, no personally identifying information is stored on the blockchain, only verification tokens, and the information exchanged is extremely difficult to compromise. This makes employees safer in that their private, personal identity information cannot be stolen by attackers en masse, as they can with a standard database, and employers can still be certain of the veracity of authorization stored in the blockchain.

For security developers, ShoBadge’s core potential is that it can be expanded to integrate with the entire enterprise ecosystem. The company said its system can be used to eliminate the need for vulnerable third-party identity networks. It can be used to consolidate employee identity management as well as management for partners, sales channels, contractors and customers.

The ShoBadge system can also be used as a complementary tool with already installed single sign-on systems and seamlessly integrate into existing solutions, such as Okta and Azure Active Directory, for easy product deployment and minimal disruption to employees and infrastructure.

Interested parties can register for a demonstration of ShowBadge on the company’s website.

Image: ShoCard