What you need to know about Libra to protect your Digital Identity
Beyond Facebook’s plans to issue centralized cryptocurrencies, they also aim to create more control with a new standard for digital identities. In this series, we show you what cryptocurrency-promoters need to know in order to protect their digital me.
Libra is more than just digital money.
Bitcoin passed the 13,000$ mark last week, and with that, many analysts saw their expectations fulfilled that the Facebook-coin Libra is going to have a positive impact on the crypto market. Their hypothesis was that the hype about Libra is going to help our society in building up a deeper understanding of cryptocurrencies and also point out the differences between Libra and truly decentralized cryptocurrencies.
But those who dig deeper are going to realize that Libra has a completely different approach to any other cryptocurrency and the skepticism towards their centralized solution becomes reasonable.
Centralized digital identities and the transparency of its users are an important part of Facebook’s success.
Therefore, the social media giant is now trying to expand this success by taking central control of digital cash. Thus, it is important to understand the plan behind Libra.
The Libra white paper contains a lot of hidden information and messages. The paper is divided into a technical part and a business summary. It gives a detailed insight into the plan and the creation of Libra and Facebook’s control. Those digital identities are fundamental to its new regulated currency. The reason is simple: in order to become a legitimate means of transaction, it’s essential that every user becomes identifiable. Hence, it becomes clear that Libra will become a means to use digital identities to further expand and cement its leadership role on the internet.
Whoever wants to escape such central control has to learn about self-sovereign identities (SSI). This is exactly what we try to show in this article.
Libra gives us the unique chance to enlighten people about true, decentral and anonymous cryptocurrencies — but digital currency is just one side of the story.
The other side is that digital identities need to be free and independent. Unfortunately, this is the forgotten and ignored side. This could make the dystopian scenario probable that Facebook will succeed to hide the fact that whoever uses its pseudo-decentral currency is also revealing its digital identity — both centrally controlled by Facebook.
In addition, Facebook could expand its knowledge by collecting information about their purchasing habits and cash flow. The connection of prior disconnected information was good for us, but could now create a more extensive profile and ensure Facebook’s headstart as Big Brother, as George Orwell’s vision showed.
Our digital identities are not ours.
Life on Facebook is funny and comfortable because besides its services, news, and all our friends in one network, Facebook offers one irresistible feature: it’s simple to manage one’s own digital identity when login to other websites. Rather than managing a bunch of passwords it’s simple to use the Login with Facebook-button that every big online-service offers from Airbnb to Spotify.
In the early days of the Web 2.0, it was an annoyance, but also a big missed opportunity in the internet protocols: it missed the chance to integrate safe, digital money and the opportunity to identify to websites or for online trade.
So far, people had to remember or manage all passwords by themselves. Then, Facebook offered Facebook connect, a Single-sign-on service, which saved time and created security against phishing attacks. This simple, but effective service allowed Facebook to reach 8,4 million websites and deeper insights into who we are and what we want.
In lay terms, Facebook provides its users with passports for the services of the internet. But under the condition that every journey is controlled, documented and can be revoked at any given time.
(Take a moment and ask yourself how often you have used Facebook’s login button out of convenience).
Leaving Facebook is painful and (currently) full of disadvantages…
The awareness for this central control is rising: with every newly acquired startup, the fusion of messaging-apps or an updated paragraph in the terms and conditions, it creates further mistrust about Facebook. Scandalous practices at Facebook, unveiled during the Cambridge Analytica case, do their part to illustrate users the threat of central digital identities.
Some users can arrange themselves with this status-quo and don’t feel any need to change their online behavior, but for some it is a matter of economic pressure and survival.
Despite the benefits of large platforms, monopolists dictate the market conditions and fees which cut into the thin margins of shops and service providers. It’s difficult to leave a big platform without an alternative that offers a similar service or network. Therefore an unavoidable dependency on big platforms is accepted because to be found on the internet decides between profit or bust.
In lay terms, it’s comparable to give up the citizenship and passport to get freedom, but also lose access to public service, right to vote and residence — if there are no alternatives.
…it becomes possible with decentralized tools.
A quick solution (but too short-sighted) would be to replace the Facebook Single-Sign-on with another more trusted service provider, such as the government. But the whole problem remains if the process involves a central entity. As long as one actor has custody of the whole history of you, your reputation, your contacts, and the authentication of your own identity — you need to trust this actor unconditionally. In the emergency case, this would have extensive implications for your whole life.
Cyperphunks are fighting against the exploitation of such control over our lives. One of the initial goals of Cyperphunks, such as Satoshi Nakamoto, is to protect individual freedom by keeping digital identities anonymous. Hence are self-sovereign identities (SSI), next to digital cash, the most important realization of their A Cyperphunk’s Manifesto:
“When my identity is revealed by the underlying mechanism of the transaction, I have no privacy. I cannot here selectively reveal myself; I must always reveal myself.“
Similar to how Bitcoin reminded us of how cash works and makes us more independent, SSI are also changing our perception of ownership and control over identities. The concept of decentral and portable identities makes it obsolete to need trusted providers in order to manage identity, reputation, data, and privacy.
SSI is similar to a passport with unlimited travel opportunities and travelers can migrate to any state.
An example: such platform-independent SSI allow Uber drivers to bring their identities to another app that offers better conditions, free price creation or the foundation of worker unions. Once users take control and are free to choose which platforms fit their needs the best, a new competition will be kicked-off on who provides the best conditions for users and not for the best way to profit from their data. The result will be a user-focused business model that does not consider the user as a good or product.
Your data is your business
Self-sovereign identities would be the end of Facebook’s data monopoly. Instead of being forced to hand over your data to Facebook’s ecosystem like today, Facebook would be forced to change its business model, with which it earns a billion € every month currently.
Instead, users are free to decide who can access, utilize, and profit from their data. This could lead to the case that Facebook pays us if it wants to use our data.
Self-sovereign identities are already in use in leading countries and cities, many start-ups are working towards this holy grail and attracting funding. Among them is Blockchain HELIX with their SSI-solution called
helix id. The app provides safe identity wallets with maximum security, the most minimal effort and full access to digital and analog ecosystems.
While we’re preparing the last touches of helix id before its launch, you can check the latest updates and information to this game changing technology on helixid.io.
Join our mission in creating a trusted digital identity ecosystem!
“Revealed: 50 million Facebook profiles harvested for Cambridge Analytica in major data breach”
I have acquired a deep understanding for digital authority management during my last 15-year-long career in IT security. I’m an initiator of the Blockchain Frankfurt MeetUp and also one of the founding members of the Germany Blockchain Association.