An embodiment herein provides a processor implemented method for blockchain-based authentication of a user using a user device, that includes (i) obtaining an identify information associated with an identity document of the user; (ii) storing the identity information, and a set of credentials, with a blockchain to link the identity information with the set of credentials for the user; (iii) obtaining a cryptographic challenge from a relying party device when a record that includes a user identity information of the user and the set of credentials associated with the user identity information for the user device is found to be stored with the blockchain; and (iv) transmitting a response to the cryptographic challenge to the relying party device. The relying party device checks whether the response matches with a predetermined correct response or not. The relying party device authenticates the user only if the response matches with the predetermined correct response.