Decentralized Reputation

Markus (Maex) Ament
Published in
4 min readApr 13, 2018


We’ve all been there. You want to sign up to a new service online, and you face two options: go through a lengthy form to create a new account. Or, choose to login with Google or Facebook, Twitter or LinkedIn, in only three clicks. Who isn’t tempted to take the latter route?

Convenience beats everything — until it doesn’t.

Have you ever faced a situation where your Google account was locked, or Facebook detected “suspicious activity” and temporarily deactivated your access (all for good and valid reasons, I’m sure). Uncontrollable lock-outs reflect the scary status quo and normality of today’s online identity. We completely trust (and rely on) a handful of very large for-profit entities to manage our identities, and we pay for that convenience with a complete dependency on those players. We need to acknowledge that those companies have no obligation to continue maintaining our identity.

If we look one step further, we realize that our online reputation is completely out of our own hands as well. To be fair, one could argue that some of my social graph (if we count that as part of our reputation) is public, and therefore can be shared with others. That being said, I still don’t have control over or at least transparency on how the graph is constructed and what is a positive or negative marker in the underlying algorithm.

What’s more, if we look at more “professional” services that maintain our reputation, such as Experian and other credit scoring offerings, it becomes very concerning how little we control the data that is collected and stored, and how little influence we have on how our data is shared and used.

The same is true in business identity and reputation management, but to an even greater extent. Enterprises today use a variety of online services to conduct business. They build online identities and, more importantly, a hard-earned reputation within those different services.

On one side of the spectrum are professional B2B networks, where the customer/supplier relationship is maintained, and company reputations are established through client connections and product and service ratings . On the other end, we find the more consumer-facing, ratings-based assessment of businesses via the likes of Yelp, Google, TripAdvisor, and others. For a business owner, favorable ratings on a single site don’t cut it — those need to be replicated across as many reputable ratings-based sites as possible. (Case in point: I recently submitted a positive Google review for a friend of mine who opened a restaurant only to get a follow-up request to submit a review through TripAdvisor as well.)

In all cases, the reputation of a business relies on such mega-corporations — and jeopardy is an assumed and substantiated risk: Breaches and hacks, unethical preferential treatments, selling of data, and more are dangers that we know we potentially face by using those services.

Rather than continue to travel down that precarious road, let’s choose a different route based on the promise of a new, decentralized world through which we have the real chance to fix some of what’s broken. Identity and reputation are core building blocks for transactions in the financial supply chain and the protocols that we are building here at Centrifuge. I would argue they are foundational for any blockchain based protocol.

Our goal is to create a digital identity supported by a reputation that can develop and advance over time, all while ensuring that full ownership of identity remains in the hands of the rightful possessor: the individual or individual business. If you own an identity, you should be able to leverage your reputation however you please, including finding new customers or utilizing the financial productions of your choosing.

As things stand, we’re dependent upon — and restricted by — the identity and reputation services that closed, centralized providers offer. Let’s instead replace that with a future where we’re not beholden to a network that holds our identity and reputation hostage. As an example, if a business owner is in need of funding through a loan or through selling their receivables, they should have the option to choose the financial service provider that is most applicable to their particular situation, and not the preferred partner of the legacy network they’re using to send invoices to business partners.

Self-sovereign reputation is a key concept within the Centrifuge Operating System, and can be expanded and enhanced in a variety of ways. A few examples: having provable relationships with business partners; having historic commercial activity (a business paid or was paid for something); or being able to verify that business was conducted according to sustainability or specific ethical standards. Reputation-building also includes fulfilling financial obligations, such as paying on time, or repaying loans and credit lines.

It’s no secret that in today’s early decentralized reality, piloting identities can be incredibly time-consuming, and is an undertaking that only a few can master. The management of wallets, keys and execution of transactions is cumbersome and, consequently, prone to error .

In order to go mainstream and reach critical adoption among the enterprise community, reputation and identity currently need to be delegated to third parties. The crucial difference compared to data silos in a centralized scenario is that management, control, and data associated with reputation remain in the hand of the owner’s without compromise or fail. In this world, convenience and privacy are finally aligned.