If Your Identity Isn’t on the Blockchain, Do You Even Exist?
What companies such as Civic are trying to do, why it’s important, and the challenges they face.
How great would it be if you could use a single app to verify your identity when buying a plane ticket online, checking in at the airport, going through security, and checking in at your hotel? You wouldn’t have to worry about a passport or other documents and it would make a life a breeze! This is how (the fictional character) Janice uses the Secure Identity app in Civic’s product description video.
Civic is one of the many companies that have developed an identity platform using blockchain technology. While personal information is one of the most practical and valuable uses of this new technology, can services, such as those provided by Civic, do what they say they can and do it well?
What Is Civic?
By January 2016, Civic had already secured $2.75 million in funding and launched their own ‘token sale’ in June of 2017. In the interest of fairness, and likely a strategic marketing technique, they chose to structure it in such a way to allow smaller investors be involved.
At the time of the token sale, the Secure Identity Platform (SIP) was already created and described by Civic as “a bit like a digital wallet that bridges your physical and cyber credentials”. Though there is more information on how it works on their page, there are two key benefits worth pointing out.
- First, the information is only stored locally on your device, giving you more control of your information and allowing you to act as the gatekeeper.
- Second, the information only needs to be verified once, reducing the time and effort necessary for following regulatory requirements, such as Know Your Customer regulations (KYCs).
The Marketplace (described as the ‘Ecosystem’ in the Civic white paper) was developed to incentivise parties for “contributing to the ecosystem” through the use of smart contracts. Validators are rewarded Civic tokens for validating information and users for providing information to be validated. It is however in its first beta and will not be publicly available until Q3 of 2018.
Civic also offers an Identity Theft Protection product which, while not entirely novel, does offer a variety of useful tools and services that complement the SIP.
This Is Important Now More Than Ever
Regardless of cause, data breaches affect billions of people and will likely have a more significant impact than we can predict at this time. Here is a great visual of the world’s biggest data breaches, these were the worst hacks of 2017 and, most recently, 150 million people were affected by the MyFitnessPal hack in February.
Companies can now collect more data than ever and store it for much longer, meaning they often collect data just because they can and end up creating a treasure trove for malicious actors. Most websites ask people for some combination of name, email, birthdate, gender, and location which usually is not important for the service or product they provide.
This isn’t immediately a cause for concern unless you consider that “87 percent of the United States population is uniquely identified by date of birth, five-digit zip code, and gender” and the Social Security Number of those under the age of 30 can be accurately predicted for most people. This information is incredibly valuable to fraudsters who last year stole $16.8 billion in the US alone.
Services such as Civic’s SIP can help people combat this and become informed participants, making clear exactly what data is going to be used and allowing users more chances to say no. As user data is only stored and visible on the person’s device, companies have less access to the data and are unable to sell it to data brokers who, as an industry, make hundreds of billions of dollars.
Companies can also spend less on security as they do not hold that information, do not need to see it, or spend the resources to verify it. It also makes it easier for businesses to comply with increasing obligations such as those introduced in the General Data Protection Regulation (GDPR).
This is important for financial services as it saves resources for users as well as businesses.
According to a global survey with over a thousand respondents by Thomson Reuters, the average onboarding time of new employees is now 26 days. The average annual cost to businesses is $48 million, with banks in particular spending on average $70 million per year. Businesses with a turnover in excess of $10 billion are spending $124 million in onboarding costs alone.
These costs predominantly come from inefficiency in verifying documents, which could be greatly reduced by using platforms such as Civic that can share either already verified information or the fact that it exists.
“An officially-recognized form of ID is the key enabler — critical not only for exercising a wide range of rights but also for accessing healthcare, education, finance, and other essential services.” – Vyjayanti T. Desai, The World Bank
Independent identity services could also help the over one billion people who can’t officially prove their identity which is becoming increasingly necessary. Just as mobile banking helped 194,000 Kenyans out of poverty, identity services have life-changing potential for countless people.
There are, however, millions of people who do not own smartphones. While Civic would not be able to help them, partnerships such as ID2020 Alliance are working to find technological solutions which include other ways to use the blockchain.
Civic In Practice: Still a Long Way To Go
Currently, Civic has 15 ‘Login & Signup Users’ and 43 ‘Partners’. Most of these are businesses that are currently in the process of, or have already had, an ICO and used Civic as an authenticator in some capacity. Due to this, most of the businesses that I tried did not actually have a way to use Civic in any meaningful capacity just now— either the product or service wasn’t ready yet (10KCrypto), Civic hasn’t yet been implemented (Allyus says “coming soon” and Slotclash “in testing”), or there seems to be no use of Civic outside of the ICO ecosystem (InvestFeed).
There were projects such as FIC Network’s crowdsale that seemed to work perfectly and required no information outside of Civic. WikiHow allowed me to create a profile only using Civic, akin to Google and Facebook logins, while others such as CoinPoker required an email, nickname, and password before offering Civic as a KYC procedure. As information is only added to your Civic ID when a business asks for it and the automated process wasn’t working, I had to wait until my passport was manually verified to take part in any ICOs, which took a few days.
These seemed to be exception however, and not the rule. Almost every website asked me directly for my email and most asked for me to provide other information, and this cannot be the desired outcome.
This is part of the problem with products and services such as Civic — they’re simply too new. We won’t know how useful or practical these projects are until they’re used for more than a handful of ICOs and websites.
These partnerships are also mainly with other new ‘disruptive businesses’ rather than the more established businesses that Civic wants to work with such as booking sites, hotels, and airport security services. While these might come in time, Civic needs to build these partnerships soon to stay relevant in an industry that is already becoming crowded.
- Everynym has a similar focus on self-sovereign ID and has even partnered with the Illinois Blockchain Initiative for a pilot program which begins with birth registration data.
- uPort has launched a pilot program in Zug, Switzerland to register user’s IDs on the blockchain, though the user does need to go to a city administrator with the official documents physically, which then allows them to “unlock access to government eServices like online voting and proof of residency”.
- SelfKey is also very similar to Civic, as is THEKEY, which is a big player in China and which has recently announced incredibly important partnerships such as with the China Social Insurance Association.
- SecureKey has backing from six of the biggest banks in Canada as well as various levels of government and has no received “a grant from a research centre funded by the U.S. Department of Homeland Security to help build a digital identity network”.
These are only some of the businesses in this space and there are many others that focus on giving you control of your data that don’t rely or use the blockchain in any way like Hub of All Things, CitizenMe, and People.io.
The number and quality of businesses doing similar things matters. Users don’t want to have to rely on multiple different identity platforms or use one that isn’t an industry leader. For this reason, each of these projects needs to carve out a space for itself and be the best — whether it’s to provide international identification or for simple login services — and be good at it. For Civic that might be ICOs and KYC for disruptive businesses, but that’s far from its lofty aspirations.
How Far Can Identity Platforms Go?
From a macro level, it is interesting to consider if online-only identification services could work. Governments have currently monopolised power over creating ‘official’ identification documents, thereby exercising control over their citizens and residents. One example of a technological solution which hasn’t done well so far is India’s national biometric ID card system called Aadhaar which has had issues with actual use, worries of surveillance, and data leaks.
While government control over identity can be argued as a good or bad thing, it is unlikely that governments will give full control to private organisations or other countries without something in return. The EU is currently implementing eID schemes “which help public administrations and private Service Providers to extend the use of their online services to citizens from other European countries”, mainly online public services such as for tax. This cooperative effort however is enforced through regulation which isn’t possible on a global scale, and unless there is a truly global identity system it is unclear how something like the eID scheme could extend worldwide.
A more complex and important issue is what could happen if we do give people more control of their data. As we’ve seen from social media, people already share a lot of personal information online without fully understanding the implications. For example, inadvertently posting your address could invite thieves into your home, and posting seemingly innocuous pictures of your children could significantly infringe upon their privacy.
Not only do we need to develop our technology to better protect our data effectively, but we also need better education around personal information and privacy. There are a variety of great resources for keeping kids safe — from information for parents such as from NSPCC, games like Carnegie Cyber Academy, and even videos with popular characters like Phineas and Ferb — but there are few engaging and informative resources for adults. Without these tools, people will keep making the same mistakes until it’s too late and education is a simple and important first step.
Summary
Companies such as Civic are helping people to become more informed participants and have better control of their data. This means individuals and businesses can spend less time and money authenticating necessary information. Businesses also benefit by having less control over the data and therefore less of security and compliance risk.
Particularly in the identity sector, where mutual recognition is required, partnerships are crucial to define whether a company will be successful and how far it will go. Civic seems to be behind similar businesses in its goal of bridging your physical and cyber credentials in the real world, though there is still time for the platform to grow and flourish.
Helping those who already have official documents pass through airport control or participating in an ICO isn’t the only use for identity platforms. Blockchain-based services like Civic can help solve problems such as providing verifiable identity to the over one billion people who need it and to help streamline online government services, similar to what we are starting to see in Europe. Technology, however, isn’t the only solution — or even a perfect one — and without proper education we’ll keep making the same mistakes.
Decentralised Identity — Your Thoughts?
Would you be interested in using something like Civic for your identity? What would you consider when choosing which to use? Is there something you’d like to see in this space? Let us know in the comments below!
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