Nov 11, 2014 · 4 min read

Putting ID Cards on to “The Blockchain” is Not Smart

“Redundant innovations”. This is a term that describes when a whole industry or methods of operating are made obsolete, but men persist in a desire to superimpose old thinking onto new methods.

Here is one example. Many roads where cars travel today have stop lights on them. There are millions of them, controlling the flow of traffic all over the globe.

In a world where all the cars are driver-less there is no need for traffic lights on any road, anywhere. Traffic lights are made redundant by driver-less cars.

An inventor who cannot accept the idea of roads with cars but no traffic lights, or perhaps, the traffic light supply industry, will not sit quietly and accept the innovation and implications of driver-less cars. The former is threatened by the new, the latter is threatened with going out of business.

What both these people will do, and this is entirely predictable, is try and move the traffic light from the road, to the car. This means that the traffic light manufacturer can pivot and stay in business, and the “innovator” can sell his traffic light replacing design.

The traffic light replacement design would cause all cars stopped by computer at an intersection, to flash a legally required set of bright coloured lights showing that they have been automagically stopped for pedestrians. These lights, being a legal requirement, would guarantee patent royalties and manufacturer contracts for decades.

They will claim that they are doing this not for profit, but for safety, for “the good of society: the public good”. Anyone challenging them will be smeared with the charge of being against the welfare of children crossing the street.

Of course, in a properly functioning economy, all the traffic lights would be removed because they are now redundant and an unnecessary expense. But we do not live in that world. Yet.

Now on to Bitcoin.

There are men who want to move the process of managing identity to “the Blockchain”. This is exactly analogous to the driver-less car scenario outlined above.

Bitcoin guarantees payments absolutely. There is no longer any need to take someone’s ID Card to verify that the payer “is who she says she is”. If she has Bitcoin in her wallet, then the Blockchain says its hers and she has the right to transfer it to any other address without restriction.

ID Cards are a hack solution to the problem of identifying spenders to help combat payer fraud. If payer fraud is made impossible, as in our fortunate case Bitcoin does, there is no longer a need to “combat payer fraud” because it no longer exists.

Bitcoin fuses into one secure service, both identity and money. That means there is no need for a secondary channel to verify that a spender is the owner of an account; they are the owner, defacto with Bitcoin.

Building ID Card models into Bitcoin doesn't make any sense if it is to be used to make sure the payer is who they say they are. This requirement now completely redundant. Of course, you can use the Bitcoin Network to keep a distributed timestamped spreadsheet of any sort of data, but identifying people by name, date of birth, age and address is something that is not at all needed.

In a free market, no one would think of using the Bitcoin Network for the purposes of “securing identity” in money transactions. The very phrase, and idea, is a nasty excrescence of the State, and not something entrepreneurs are interested in at all.

In a free market, on-line businesses would jump at the chance of dropping the government and industry mandated database tables that contain people’s personal information for the purpose of fraud detection and prevention. Its a profitless nightmare and administrative burden.

Of course, customer data is valuable. Who is buying what, when and where is data gold. What I am discussing here is the collection of personally identifiable data to make sure the payer has the right to use an account to pay.

ID Cards are a legacy tool of the 20th Century, designed to control and abuse men. Now that we have the Bitcoin Network, ID Cards can be eliminated without any risk on both consumer and retailer ends, reducing costs on both, increasing convenience, commerce and ethics globally whilst protecting consumers from identity theft.

Dim Sum for 6, William Fevre Chablis Bougros Cote Bouguerots Grand Cru 2015, blood orange slices↴


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