Blockchain and the Digital Nomad
What’s your crypto address?
It was an innocuous question, one that you’ve probably heard and responded to dozens of times before — someone from the other side of the globe needed to transfer funds to you for services rendered. Having struggled to be properly documented by draconian and obtuse systems, blockchain has been a game-changing revelation for freelancers plying their trades across international borders. Able to send, receive, and transact without needing any middleman to approve the transaction or prove identity, freelancers are rapidly embracing this peer-to-peer and decentralized medium of value exchange.
So, why the hesitation now?
To understand this hesitation is to understand the nature of blockchain technology. Blockchain is a distributed and decentralized, peer-to-peer ledger system. It stores and records all user transactions on the network. Data stored on the blockchain is immutable, meaning it cannot be erased or altered in any form. Identity is a cryptographic code that can be generated in less than 5 seconds consisting of a public key or address for its owner to receive cryptocurrencies and a private key for interacting with the cryptocurrency in the public address.
A public address or key is exactly what it means — a publicly available point of contact and interaction, or in other words, this is what you give to anybody that wants to send cryptocurrency to you. Public keys are uniquely linked to the private key that generated it and can only be generated by that private key linked to it. Private keys are unique for every event and user that generated them, no two same keys exist. This invariably means your public key is your identity since you created the private key that generated the public key.
And the problem with this is?
Since blockchains are public ledger and data is immutable, anybody can look up your transaction history and see every single transaction you’ve ever made — who they came from and where they went to. Furthermore, they can piggyback on the addresses that you’ve interacted with or have interacted with you to see their activities. Giving anybody your address was not only showing not only enables them to see your net worth, it also enables them to figure out who you worked with and when.
“What’s your crypto address?”
Of course, you could create another account — it takes 5 seconds to generate a new private key. But as a freelancer with a revolving door of clients, keeping track of all these addresses and securely storing each private key was one rabbit hole most never come out of.
“Your address, please?”
Maybe you could opt for an anonymous cryptocurrency that not only hides the amount transacted, but also the parties involved. The only problem was how to explain this on the tax return form without trying to not come off as pulling a fast one over a system that remains highly sceptical about this technology.
Hi, My Name Is…
Privacy and accountability are often at odds with each other in the blockchain space. Some blockchains will shield all activities from all eyes, making them fully anonymous at the cost of making the ecosystem extremely vulnerable to illegal activities. While full anonymity is desirable, the inability to audit transactions makes these types of blockchain impractical for businesses and any organization or entity seeking to comply with regulations. However, allowing your competitor to track all your transactions and accounts is just handing one’s imminent demise on a platter of gold.
Balancing the need for privacy while providing accountability for local regulations will go a long way in furthering the adoption of blockchain technology and cryptocurrency utility. This means that transactions are processed without exposing the identity of the sender or receiver. On the other hand, where a suspicious transaction or set of transactions have been detected, the real-world identity of the user can be revealed to authorized authorities through on-chain identity providers.
Having these providers not only residing on-chain but also baked into cryptographical identities eliminates the centralization and scalability issues most jury-rigged addons tend to fall afoul of.
Concordium offers such balance, providing transactional privacy for users while creating mechanisms for accountability through identity providers and anonymity revokers. All user’s accounts are associated with a real-world identity. Identities are linked to an identity object stored by an identity provider and connected to a set of anonymity revokers
Identity providers provide off-chain identification of users, securely storing user data and issuing identity certificates. Information about identity providers such as their name, location, and public key will be easily accessible through an on-chain registry.
Anonymity revokers come into play when there is a valid, legal process involved. They are critical to decrypting the real-world identity of any suspect account. However, this process can only be initiated after a qualified authority validly serves an official order.
Concordium provides a flexible identity layer with a constant finger on the pulse of financial regulations, enabling businesses and users to adapt on-the-fly through tailor-made solutions for all their compliance needs.
In 2020, digital nomads are to choose between a wide range of cryptocurrencies. They shall be very interested to use a Crypto Payment Method backed by a solid blockchain architecture to pay and be paid when this choice will be triggered by both usability and compliance. The main pillars of the Concordium Approach.
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