Digital Identity is the key to the Blockchain Economy

Digital Identity is the key to the Blockchain Economy

This is Part 1/chapter 12 in The Blockchain Economy serialised book. For the index please go here.

On Thursday I gave a talk about Digital Cooperatives at an event near Geneva in France that was organised by ARK IO (a French crypto platform that we had earlier covered here. I was impressed by the developer enthusiasm for the platform and plan to research it more).

This event focussed on two big trends that I have covered in earlier chapters/posts:

The event came after the news that France was making some serious moves to become a major jurisdictional venue for cryptocurrency investors (see news here). I thought this was the story, but really France is one more jurisdiction positioning in this space that seems to have a new entrant daily. The surprise takeaway from the event for me was how Digital Identity is the key to the Blockchain Economy. This chapter/post focusses on:

The Identity Middleware in the Blockchain platform stack

The Digital Identity Edge Cases that may drive change

Investor Identity replaces the broker rolodex in the ICO market

Our Identity is more important than our financial assets yet we give it all away

Digital Identity on Blockchain is driven by three concepts

1. Your Digital Identity is an asset that you control through a private key. You control Digital Identity on Blockchain just like you control cryptocurrencies on Blockchain.

2. Nobody can change that data. Not you, not your government, not some corporation. Data can be appended, but never deleted or changed. Think of this like a private key to your bitcoin that allows you to view your crypto stash but not to magically make the stash bigger. Your biggest asset is safely under your control, but you cannot simply write your own history of yourself.

3. Granular control. You can reveal one part to one company and only that one part. The only person who sees the whole picture is you. For example, only you can see your health records, friends, financial records, political opinions and all the intelligence you gather by combining those data sets.

The Identity Middleware in the Blockchain platform stack

All the above may sound good enough in theory, but how does it work in practice? The short answer today is — badly. This is like using email in 1992 — going to the post office or fax machine was easier.

The good news is that there are a lot of very smart people working on the problem and the prize is big and there is no scientific breakthrough needed. So we can be confident that this problem will be solved even if we don’t yet know by which company and in what timeframe.

The general outline of the solution is becoming clear and was visible at the Ark ecosystem conference. The solution will come (as it usually does in software) through a 3 level stack:

The reason that this is hard to see is that the Middle and Bottom are still being rolled out and no Top of stack UX services have made it super easy for consumers. The Crossing the Chasm model assumes is that these consumer UX services will first appear in edge cases, niches that most big vendors ignore (more on that in the next section).

I arrived at the event as an Ark person was presenting the Middleware part that they call Persona. This was clever in two ways:

The closest I have seen to this is what Consensys is doing with UPort on the Ethereum Blockchain.

For years, anybody who talked about privacy was dismissed as a “privacy nut” and the refrain was that if you wanted privacy you must be doing something illegal. Three recent events indicate some change happening:

However, to drive behavioural change, individuals must make Privacy an A List priority. Most people, even once they agree that privacy is important, don’t take action by doing something like using TOR or DuckDuckGo. To date, a lot of the people who did make it an A List priority were assumed to be doing it for terrible things such as terrorism or pedophelia.

Posted on 7wData.be.