Issue 5: Identity Problems
DCG Connect — Week of June 26, 2017
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Blockchain Misunderstood: Identity on the Blockchain
The ID2020 Summit took place last week at the UN. ID2020 is an organization dedicated to “Accelerating technology to ensure that every person on the planet can access a unique digital identity as part of their basic human rights.” The World Bank says ~1.1 billion people have no official identity, i.e. government documents that attest to their existence. This makes it difficult for them to move about and interact with the world, because they can’t verify who they say they are.
Companies have been looking at blockchain technology/DLT as one way to enable self-sovereign identity for populations who don’t have access to a central authority (a functioning government) that typically provides and manages this proof of existence. One idea is to create an official identity for them digitally with biometrics, and use blockchain technology/DLT for storage and retrieval.
The UN isn’t convinced of this idea yet (the UN also has its own existing solution). A couple of issues come to mind, namely security and governance. To paraphrase from someone on the Identity Panel at Consensus 2017, if someone steals your password you can reset it — that won’t work with your fingerprints (at least not yet…). And how capable or willing are people to be the sole managers of their proof of existence? In some cases, an intermediary might be a desired feature. We’re very excited about consumer identity solutions broadly (Civic, Shocard, and Blockstack Labs for example), but recognize the many human/security/process problems that are barriers to adoption.
Company Spotlight: SETL
Congratulations to SETL on winning the award for the “Hottest Blockchain Startup” at the Europas awards in London earlier this month. SETL’s product is a multi-asset, multi-currency institutional payment and settlements infrastructure for lowering the cost of post-trade settlement. Founder and CEO, Peter Randall, was previously the CEO and founder of equity exchange Chi-X Europe (now a part of BATS). SETL represents a popular theme for blockchain technology in the financial sector, which is finding ways to modernize the post-trade process. If mutual funds, PE funds, banks, etc could directly transfer assets, the basic theory is that post-trade processes should be much simpler and therefore cheaper. If you’re interested in hearing more about SETL’s thesis and a brief history of trade/financial market technology as well, check out this interview with Peter.
Partnerships & Projects
Comcast, Disney, NBC, Cox, and others to launch blockchain ad platform in 2018 | Mediaset Italia, Channel 4, and TF1 group are also involved. The platform will enable “marketers and networks to match their own customer data anonymously in order to determine which network program may have the best result for a certain product ad.”
IBM announces partnership with Colombian logistics company, AOS, to automate supply chain tracking | They want to digitize and automate the process of tracking trucks and their goods to reduce errors and improve transparency for participants in a supply chain. Most of this data entry work is still done manually at distribution points along the supply chain route. The system uses IoT technology + RFID tags to upload data (load, weight, est. time of arrival, exchanges, stops, transactions) onto a blockchain. This system is currently running as a prototype on the IBM Cloud.
Colu* launches a local currency for East London, the “Local Pound, East London” | “The company offers peer-to-peer and peer-to-merchant app-based payment platforms facilitating digital financial transactions at local businesses, creating a closed-loop economy that bolsters both the economic well-being and social fabric of the community.”
AIG and Standard Chartered completed an insurance pilot project and they liked it | IBM built the solution, a multinational smart contract based B2B insurance policy, on top of the Hyperledger Fabric framework. The pilot “converted a multinational, controlled master policy written in the UK, and three local policies in the US, Singapore and Kenya, into a smart contract that provides a shared view of policy data and documentation in real-time.”
Japan-based FIs tested a DLT prototype with R3 to streamline derivatives transactions and they also liked it| When we read about using a blockchain or DLT to “streamline processes” it’s not always clear what that really means, so its nice to get some specifics here. We encourage you to read the press release. It says they used to coordinate some transaction processes via email, but with the magic of a distributed ledger that’s no longer necessary. Fewer emails. Hooray for R3.
Accenture and Microsoft launched a prototype for a digital identity program | “The prototype is designed to empower individuals with direct consent over who has access to their personal information, and when to release and share data.” The system runs on Microsoft Azure and uses biometrics for verification.
*DCG is happy to note that Colu is a portfolio company.
Regulation & Policy
The National Bank of Cambodia to launch testing phase of its blockchain project by 4Q17 | The NBC signed a partnership agreement with Japan based Soramitsu in April and are focusing on using the technology to lower inter-bank lending costs. “The commercial implementation of blockchain technology has proven in the end to be a cost savings investment,” says a consultant.
Ukraine government to trial a blockchain-based land registry system in October | “According to local media reports, the scheme will introduce blockchain to the Eastern European country’s State Land Cadastre and digitize auctions for leases of state land.”
Further Reading
The blockchain paradox // “Unlikely to be legalised but difficult to ban” // Bitcoin miners unite! // South Korea auctioning 216 bitcoins // The bitcoin “B” symbol now available in Unicode // Quantum blockchain security // Bitcoin pyramid schemes target Buddhist temple
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