Decomposing identity for practical use
What is identity and why do we need it? How can we reliably implement identity in a decentralized global network?
Components of Identity
For practical purposes identity can be broken down into two components: Reputation and Accountability. The difference between the two is temporal: reputation is useful before committing to a transaction, accountability is useful after.
Reputation
Before a transaction occurs an identity is useful insofar as it allows us to decide whether or not to interact with it. Reputation systems work fairly well when: a) all of the participant’s expectations are fairly similar and b) the identities will participate in repeated interactions (e.g., each restaurant has enough ratings to generate a reasonable average score). Considering that our current decentralized systems are both global (invalidating the first condition) and pseudonymous (complicating the second condition), it will be very challenging to implement a robust, decentralized reputation system.
Accountability
The accountability of an identity is the degree to which you can enforce an agreement in the event that you’re unhappy with the result of the transaction. Accountability has three levels, in ascending order of severity:
- Reputational: reputational accountability is the power to damage the reputation of the other party. Many ‘web 2.0’ companies have built products around crowdsourcing reputation systems (e.g., Yelp).
- Financial: financial accountability is a stronger guarantee than reputational accountability. Financial accountability can be established in a proactive manner using techniques such as escrow, or it can be established after the transaction, e.g., filing a tort claim.
- Violent: The strongest guarantee of accountability is violence. Violence is typically monopolized by the local government (so its application and reliability varies considerably by polity) but if someone’s conduct is sufficiently egregious the local government will send guys with guns to track them down and put them in a cage (or worse). Though this sounds crude it may be a necessary evil; all modern governments still use the threat of violence to enforce their most important laws.
Reconstituting identity in a decentralized system
Decentralized systems are becoming recognized as a new way to organize and induce cooperation. But they also will force a re-organization of our trust and identity systems.
Reputation & Reputational Accountability
Decentralized systems have several attributes that make credible reputation systems very difficult. I’ve previously discussed these challenges but to recap:
- the scoring algorithms are public, and thus more easily gameable
- Sybil attacks
- cultural and language barriers
Violent Accountability
Violent accountability can be easily invoked only in transactions where both parties are within a single jurisdiction. In a global network this remedy is (perhaps thankfully) difficult to implement, but we’ll still need to secure ourselves against serious crimes — fraud, theft, and robbery will still exist in a decentralized world.
Financial Accountability
As many others have discussed, financial accountability offers a distinct advantage over the other two forms: it’s socially scalable across cultures — everyone loves money and math works out the same in any language. Until humans begin to consolidate our cultures and/or our governance, financial accountability will likely be the best option.
Social, Local, Pseudonymous, Decentralized Identity
Our current identity systems can’t handle the opportunities afforded by instant, global communication. Though it’s difficult to imagine today, this creates a type of social under-development trap — we can’t achieve a higher equilibrium until our identity systems improve.
Authors note: If this sounds interesting to you then please comment or reach out! If this sounds totally stupid to you then please comment or reach out! : )
Thanks to @nicholalexander and Ben Hoekstra for feedback.
