Blockchain Brad Interviews Ingo Rübe: Essential Credentials for Web 3.0
(Part 1 of 2)
“KILT Protocol: Essential Credentials for Web 3.0 | Trust Enabler | Universal Blockchain Protocol”
February 2021
Part 1 of Brad Laurie’s wide-ranging conversation with Ingo Rübe covers the below topics; a PDF of the interview is here.
- Credentials
- Identity
- Use Cases for Verifiable Credentials
- Sovereignty
- Trust & Truth
- Anonymity
- Social KYC
- Open Source
- A Universal Protocol
- Decentralized Identity Foundation
- Ingo’s Background
- KILT Use Cases
- Why Polkadot?
- XCMP and Polkadot Relay Chain
- Ecosystem Collaboration
Brad [00:00:06] Hello, it’s Brad Laurie, I’m Blockchain Brad. And today I’m honoured to speak with the founder and CEO of KILT Protocol. His name is Ingo and he’s here to explain everything that we possibly don’t know yet about KILT and what they’re actually building and have been building for some time. So Ingo, thank you very much for being here as the lead of this very challenging endeavour.
Ingo [00:00:27] Hello. Thanks for having me.
Brad [00:00:28] You’re very welcome. Now, in transparency, it’s important that all of you know this is entirely free. And obviously I know KILT. This is about making sure that there really is key information from the source. And that’s from Ingo himself. No better than the CEO and founder of any team anywhere in the world right now in blockchain.
So let’s talk about something that isn’t really talked about a lot Ingo, and that is credentials. Honestly, it’s a very complicated topic. A lot of people really haven’t dug deep, I don’t think, yet into KILT, and they don’t tend to do that until they start to see financial reasons to do so. So let’s start early. Let’s explore for the right reasons. That’s the tech ones. Why do we need to explore credentials in the context of Web 3 and blockchain Ingo?
1. CREDENTIALS
Ingo [00:01:09] So the credential is something you all know. You have a lot of those. Normally they come on paper or on plastic. So for example, your identity card is one, your driver’s licence is one. And also if you have a university degree, you’ve got a piece of paper from the university. This is a credential. Also, your key which opens your door or your car, this is also a credential. So credentials are all around us basically, but normally they are not digital. Normally they are somehow physical. And we were exploring this thing from the side of the digital identity.
2. IDENTITY
Ingo [00:01:43] So I think everybody agrees that digital identity is needed in digital systems. So we need to know who to talk with. We need to know if a service is actually the service it pretends to be and stuff like that. So there’s a huge need in identity. And when you look a little bit into identity, you can actually see that identity consists of two things. The first thing that you need is an identifier. So in this call, Ingo would be a nice identifier for me because I’m the only Ingo here and if Brad says “Hi Ingo”, I know that it’s going to me. But this is just an identifier and it doesn’t say anything about me. So this is not identity. This is just an identifier. It’s just like you put a QR code on an egg or you put a number on some packages or whatever. It is, it doesn’t say anything, it’s just a number.
And to have this become identity, actually, you need to put something more to it. So how does my identity grow? It grows with credentials, actually. So, I’m European, for example, I have a European passport, so that makes me European. And this passport mentions my identifier again. It says Ingo. So I can show it — this is Ingo, this is Ingo — this is part of the identity. Also, I can drive a car. This is why I have a credential for driving cars. I also have a company here which I can prove by having somebody look into the commercial register of the city I live in. And I also have a university degree and if I go to look for a new job, I might want to show this because then the guy trusts me, obviously, that I can do something, especially in computer science, and this is how my identity actually grows.
And if we want to have digital identity, it’s not enough to just have the identifiers and give everyone a name because then you don’t know anything about those things, it’s just names. You have to put credentials to it and you have to have the credential in a digital representation. And this is why we need those verifiable credentials — that’s the name for that — in a digital representation so that we can link them up to identifiers. And identifiers plus the credentials together form an identity. And this can be an identity of a person. It can also be an identity of a machine. It can also be an identity of an IOT device. It can also be the identity of a service which is just running in software. Right? So to build digital identity, we need those credentials because otherwise it’s just pure identifiers. And that’s boring and doesn’t help anyone.
3. USE CASES FOR VERIFIABLE CREDENTIALS
Brad [00:04:31] Well, let’s explore this also in the context, because the reality is that you want to have key use cases. You’ve been building this for some years and we’ve already seen in the blockchain arena DIDs, or those decentralised digital identification markers, nice experimentation on the blockchain emerge for real use cases. But one of the things that hasn’t come, perhaps so much, is the credential component that must happen. So in the context of, I guess, real world business and real world applications and more importantly, all the way to the very top of government, surely Ingo, this is really limitless in how this can be applied in this Web 3 arena. And obviously the blockchain is crucial to innovating, otherwise we’re just reinventing old wheels.
Ingo [00:05:16] Exactly, so it’s not… Actually what we do is protocol development. And if you do protocol development, it’s always very wise not to have a specific use case in mind.
Think of Tim Berners-Lee. He invented the http protocol. Nowadays you can sell your bicycle via http. This definitely was not Tim Berners-Lee’s goal, right? So if you do protocol development, you have to do something which is basically open for millions of use cases. Otherwise, it’s not going to be successful. So we were thinking in the beginning, shall we maybe go into some vertical? Should we concentrate on DeFi? Should we concentrate on government? Should we concentrate on whatever? And we said actually that would be the wrong way. Let’s be completely open.
And it now turns out that this was basically quite a good idea. Because now we have this base technology out there. We see use cases popping up left and right from us, which is really, really cute because we never thought of those things. So people come there and say, hey, can we do this for certificates for allergens inside food? And we never thought of that. And then people have come up and say, hey, we’re trying to make a genetics service which doesn’t store the genetic information about the people so it can’t be misused. Actually, you could do that with credentials can’t you? And then we say, yeah, actually, you can. That’s cool. And so, there are use cases all around us. And the cool thing is that we just concentrate on building the protocol and making it so flexible that everybody can possibly use it and then people around it build the use cases on it.
Brad [00:07:05] Yes. And that’s why I’m so excited about it, to be honest. I’ve been tweeting about this for a while and following you along because it really equates to, in many respects, the TCP/IP of credentials aligning with identity for really limitless use cases that aren’t specific to KILT Protocol itself. But in that context, I wanted to talk you through a few terms related to this universal potential of the protocol, such as self-sovereignty, the anonymity and the verifiability or the verification aspect. You mentioned that already, but they are key components to building this, I guess, universal protocol, because that’s really what it is from the outset.
4. SOVEREIGNTY
Ingo [00:07:44] Yeah. So let’s dig into sovereignty first. So I think sovereignty is one of the most important things when you look at the internet as we see it today, and this is where the Web 2 and the Web 3 actually differentiate a lot. So when you look at digital identity in the Web 2, this identity is basically held with big companies. I don’t want to mention names, but they’re mostly in America. And so how does it work? So if you want to log into a huge social network, actually what you choose is a username and password, which is an identifier. Right? And then they look to see if the username is already taken, if the password is long enough and whatever. And if everything is fine, then they say, OK, this is now your username and password and you’ve got an identifier.
The first problem there is actually that they know your secret and you know your secret. Actually, you have a shared secret. From a security point of view that’s not so cool. What happens then, is that you start to behave on this social network and this aggregates data. And this aggregation of data is actually the credentials. This is your behaviour and this aggregates not with you, it aggregates there. Right? It aggregates on their database. And then it becomes really, really dangerous because it’s not only your data that’s aggregating, everybody’s data is aggregating there. So this is a huge honeypot for hackers. If you just hack in once and you’ve got all the information, pretty cool — for the hacker, not for the others.
The second thing is that this aggregates a lot of power with this social network because the social network then goes and says, hey, we got a messenger service as well. If you want to log into the messenger service, you can just use your identity or your identifer you have from your social network. That’s so convenient for you. But in the end, it’s all put together to one database and they have more information and they can start selling and misusing it. And there’s a huge, huge danger in that.
And the biggest danger is actually, if you have a better idea of how a messenger should work, how will you ever go to market? Because they can already say, hey, you have your log-in there already, it’s so convenient. And so they’re aggregating more and more users. And better technologies, brighter ideas will never come to market because no one is going to finance them because they don’t have the users. Right? And that’s a huge thing, which is which is hindering innovation. And so we have to somehow stop that.
5. TRUST & TRUTH
Brad [00:10:22] Can I just jump in there and ask you this in the context of trustlessness. We hear that a lot in DeFi. We hear that a lot in the broader blockchain speak. But you’re embedding a layer of trust within the framework so that all the engineering that is afforded by blockchain for trustlessness, so that any entity from top to bottom, grassroots or otherwise, governmental or enterprise, can actually start to engage. But with the security and provisions of trust built in for proper applications and use cases that we know can then be utilised in business, even.
Ingo [00:11:03] Yeah, that’s it. I think this is a complicated thing people have to get their head around. Because actually you’re completely right. What we’re doing in blockchain is we produce a trustless system. What does a trustless system mean? Trustless means basically, we exchange trust with the mathematical truth. So if I have a Bitcoin and I see a Bitcoin on my balance, this is mathematically calculated. I can be sure this is my Bitcoin. Right? So this is truth. When I have a dollar in the bank, I can see my balance there, but I have to trust the bank that their database is actually working well and that they give me the dollar back in cash or whatever. So this is trust.
So we have a truth system in the blockchain and we have a trust system outside the blockchain. So we can state that. But then also in our culture, we need some kind of trust. And this kind of trust is represented normally by entities. This basically starts in the beginning of your life. At first, you trust your parents. You can’t get away from that.
Maybe 12 years later, you start doubting this trust, but in the first 12 years and it’s just trusting that. And then we are educated to trust institutions. Some people trust judges. Some people trust governments. Normally you trust universities. And it’s not going to go out of our culture. So when I have an employee who wants to work here and he shows me a university degree, then I will actually look at it and say, OK, I’ve heard of this university. This is a good university. I trust this university or what they do. And of course, then I would like to have this employee here because he has this nice piece of paper. So this trust between me and the university is probably not going to go away just because we have a new technology here.
Brad [00:13:03] Right. And… sorry, go ahead.
Ingo [00:13:07] And if we want to implement something like credentials, we have to recognise that those structures are there. Right? So we have to give the university a chance. The trust relationship between me and the university is something that happens in the real world. So this is a trust relationship, this does not have anything to do basically with the blockchain. But you could actually also make your university diploma yourself and just show me a fake one.
And this is what we can actually prevent with the blockchain because we can — and this is what KILT is about — we can store a hash of this credential on the blockchain so that it is absolutely mathematically true and verifiable that the university actually issued this credential and issued it exactly to me. And this is what we can find out, where we can produce the truth upon.
Brad [00:14:04] This is so awesome. I want to jump in here because this does this at a level that really hasn’t been done before in terms of finite trust, provable by blockchain, provable by code. So rather than trusting people and systems that sometimes can be flawed, this can be a better way, arguably for the future of any system, whether that be open source design for the people with no enterprise, endeavour or otherwise.
The great thing you said there was that there is this true, valuable synergy between the blockchain’s trustless design that’s provable and verifiable through the chain itself and then coupled with credentials that we absolutely need in society. So that’s a really innovative thing. I think that has the potential that we really haven’t explored yet globally.
6. ANONYMITY
Brad [00:14:50] So that verifiable aspect that’s nuanced by the blockchain. You’ve also referenced the importance of sovereignty as well, self-sovereignty. But what about anonymity? How does that fit into the context as well, especially when that’s had a bad rap Ingo, at the beginning of the blockchain movement, when the governments tend to be quite averse to anonymity sometimes.
Ingo [00:15:11] Yes, I think anonymity is something that comes in different flavours and that has to be provided in different ways. So, for example, take a real world example. So I want to get into a bar and I have to be eighteen for that. So I choose one of the credentials I have in my wallet, which is probably my driver’s licence. And then I show this to the bouncer. And the bouncer actually needs to see the picture so he can see that the credential matches the subject. And the bouncer also has to see my date of birth, obviously, so he can find out if I’m eighteen or not. And he definitely doesn’t need to know my name. Right? So what I can do is I can put my finger on the name and then he will still let me in. He will not know who I am, but he will see that I’m eighteen. This is what we call selective disclosure.
This is one part of anonymity we have to provide and this is also something that KILT can provide. So if you have a credential and this has four different things in it, you can choose which parts you show. So that’s one thing. The other thing that is important is that it must be possible for you to show up somewhere and prove something and then show up again and prove it again or prove something again without the verifiers, the bouncer in that case, knowing that it is you again. This is needed for many different DeFi applications and this is also something that we implemented. So I come to you and say, hey, I have a cat, I can prove I have a cat. And next I come back and say, Hey, I have a cat. You say, OK, he has a cat, but you don’t know that this was the same person. That is something that is also especially needed around blockchain projects.
So those things around anonymity have to be provided. And that’s necessary to get to the general acceptance of a system like that. Otherwise, it would be absolutely open to anyone to read that and that wouldn’t fit with data security. And sovereignty is also something that plays into anonymity, because when I have the sovereignty over my credentials, and this is what you have in a blockchain-based system and this is what you also have in the real world system, like with your real wallet, then I choose who I show which credential to and which part of the credential I show.
Brad [00:17:50] That’s a huge thing because many, many different parties want to be selective.
Ingo [00:17:55] Exactly. So this is why we need those features as well to be useful for a variety of use cases.
Brad [00:18:05] Yes, I mean, it’s immense what you’re talking about. I mean, it really is immense because, again, it’s that standardisation. For those who aren’t really understanding perhaps yet, that’s a keyword, wouldn’t you argue Ingo, is that you are a standard as a true protocol.
Brad [00:18:21] But I would also suggest that you’re going to be more than that, because whilst you are the protocol, you’re building in specific potential, specific, technology, specific, perhaps even products, who knows — you’re going to teach us this — that really build out more than a protocol, but a whole platform. Because there’s a lot going on for the standard protocol that can be applied to a vast amount of use cases. But I wonder, from you, are you thinking of specific ones that really capitalise on the potential of this protocol?
7. SOCIAL KYC
Ingo [00:18:50] Yeah, I think there are things that we already see which are going to have a very big potential. So, I think we’re KYC-ing is one thing that really has to be rethought in the world. And everybody’s really unhappy with KYC. That has to do with every country having a different legislation around it. This has to do with basically every bank or whoever you deal with has a different view on what he should do and what he shouldn’t. It has to do with being really annoying for people when they are around in the DeFi space to KYC basically every day. So that doesn’t make a lot of sense right now. So something has to be done about that. And we see the first projects coming and popping up and we are part of those projects.
For example, together with the companies, Polkadex and Fractal, we just started a really, really nice thing where we provide the KYCs from a well-known KYC provider as verifiable credentials which are in the possession of the user. Not only the KYC. You do the KYC and then the data is owned by the bank or by the service you signed up to. This is basically stupid, actually. You should have that because then you can reuse it. Right? And you don’t need to make the KYCs again.
We are also working on a project called Social KYC, which I think is going to be really important. Because there’s not only the government KYC, it’s also possible to do social KYCs around there, which means that you actually prove that you have access to different accounts like a LinkedIn account, a Twitter account, a Riot account, a Github account and your email address. And if you prove that you have all those accesses and if you store them in a credential, you can actually send people out there in the internet something that is basically much more valuable than a KYC which is issued by a government’s thing. Right? Because..why do I want to know where you live? Actually that’s really not important to me. But if I know who you are on Twitter, who you are on LinkedIn, who you are on three or four social networks and know your email address and your phone number, then I actually know who I’m dealing with. And if you can prove to me that you control all these accounts, then I’m pretty sure I’m working with you, right? That’s much more valuable.
Brad [00:21:28] Exactly. And you’re opening this up so that someone like me or anyone really who wants to engage with the open source nature of the code — and that’s what I wanted to check with you — can start to tinker with this and start to almost personalise it or to make it their own.
And something quite unique because we haven’t seen that kind of access in the past before either, especially in the context of credentials and especially in the context of systems that are built. And often they’re for people but not available as readily, as easily. So in that, where’s the value for this Ingo, when it comes to open source tech as opposed to proprietary? Given that this is in the spirit of block chain, how much of the protocol itself, through the GitHub, through the access, through the nature of open source, is available for everyone to interact with? And can it be forked? Can it be appropriated?
8. OPEN SOURCE
Ingo [00:22:20] So, what we do is 100% open source. So anything that we produce is always open source. So as soon as it’s released, it’s also open source. I think this is a necessary component in the blockchain world. If you build something on blockchain and then it’s not open source, then who will trust you actually, that you don’t put traps in that? So that’s a precondition. I don’t think there are many blockchain-related projects out there which have closed source components, and I wouldn’t trust them, actually.
Brad [00:22:54] Thank you for letting us know that. So where does the value sit in then for you? So we clarify this because you’ve been spending years with your team on this code. You’ve been building this out for a very specific value universally for, as you’ve mentioned, limitless potential. So how does KILT as a team capitalise on the protocol?
Ingo [00:23:15] So we capitalise like any serious blockchain project just by producing our own currency. That’s what we do. So we don’t take any fees for licences or data from people and sell it later. We’re not going to go into the service thing. Because I think that an open source project actually works best when there are integrators around that. We have seen that in the past. So successful open source projects actually concentrate on their open source product, which is in our case, KILT Protocol.
And then around that you have people with bright ideas who want to build great services on that and have their own business models. And you have to encourage those guys actually to build the software. And then they can earn money with it and there must be different, multiple business models possible on top of that. While we stay very small, stay in our corner and just build the KILT Protocol.
Brad [00:24:24] So you’re the lean protocol team. And you also alluded to that important economic aspect of this. I mean, that’s the true utility fuel. The reality is that token economy is really important to the dynamics of how this can play out to enable everyone to engage with this, but also be incentivised. This is something quite revolutionary, I would think, given that this is something that people can then take to build out their own credential needs. They can add them in and embed them into their own technology, their own tech stacks, their own business models, whatever the use case may be.
9. A UNIVERSAL PROTOCOL
Brad [00:24:59] But going back to you, one thing I did want to ask you: often when I talk to CEOs and founders, they also have in the back of their mind, perhaps we could also tinker ourselves as a team, not just build the protocol, but we could perhaps build some products. Have you ever thought about that on top of the work you’re doing, which is vast? I mean, let’s be real. This is a universal protocol. But is it a possibility later on where you may privatise some aspects in-house, that can use the protocol like anyone else? That are high quality, that are high tech and are very usable for, say, for example, governments. For, say, for example, enterprises. So they don’t have to build these products or these useful tools.
Ingo [00:25:42] Yeah, right now we are not doing this because we have enough to do with the protocol, actually. But like many blockchain companies you see, we also have two parts. We have the Foundation and we have the commercial entity. And the Foundation will always care for the protocol. But then we also have the commercial part. And the commercial part is absolutely free to move into building a service later. But right now, no time for that! But hey, next year things can happen.
But actually we don’t have any…this company doesn’t have an unfair advantage. It has the same source code as everybody else. And if we say we are going to build Service X, which is the super duper premium wallet for KILT credentials, someone else might come around and build a better one because it’s just normal competition. We don’t have any advantages.We could do that, but we are not even sure that we will. If we do, it must be a really bright idea. And we must also see that no one else is doing something better than that.
Brad [00:26:55] And you know what’s so exciting is that the protocol itself is the ability, the basis, the foundation for all of the economy to emerge. That’s what I’m hearing from you, is that the token economic design of this is really just to build out the value of the protocol, allow that to be the true core system at play when you can start to build these important credentials the world over.
So you must be pretty proud of the fact that you’re potentially a world mover here. First mover, rather. Do you know of anyone else in the space, given that you’ve been doing this for a few years, that is doing something similar or doing something even remotely as complex as you in the world of verifiable credentials, in the world of Web 3, in the world of self sovereignty?
10. DECENTRALIZED IDENTITY FOUNDATION
Ingo [00:27:42] So that’s a very good question, because we are part of the Decentralized Identity Foundation, which has, I think, more than a hundred, maybe two hundred companies in there. Small ones, blockchain ones like us, but also bigger ones like IBM and Microsoft. We are all organised there. Why did we do that? We saw that if it goes to digital identity, this is a biggie. Right? And we are not competing with our ideas of a decentralised identity with just another small company. We’re competing with the real big ones, the GAFA, right? And so if I come with my little 15-people team here and say now I’m going to compete against the GAFA, I will probably not be successful, especially not if the next project, just a couple of streets down the road, has the same idea and does it a little bit different.
And so what we need to do is we first have to agree on how we do it and then we have to do it the same way for the user. So the credentials and the DIDs have to look the same way. So already in 2017 we gathered all those companies together and said we have to agree on standards so that we are compatible with each other, even though we might be competitors.Where the DIDs actually emerge from, this is where the verifiable credentials standard emerged from. So there are many companies in this field and they all differentiate a little bit by doing something a little bit different than others. But the credential which you hold in your wallet will basically be compatible with any other. Right?
And this is absolutely important because otherwise we can’t win. We are all, even if we are Microsoft and IBM, we are too small to win. So we have to put our strengths together and all go to a little bit of a different use case maybe, or go into a different vertical or have some speciality around it. Like maybe we are a little bit better in providing anonymity and we might be a little bit more in the blockchain world, which other companies maybe are not. But in the end the credential is the credential.
Brad [00:30:14] This is fascinating because I’ve spoken to only one other company in this context before where we were talking about standardisations. And we were talking about global standardisations that were reaching across into the mainstream, into those major players in enterprise, as you mentioned, in Microsoft. So what does that mean for something like KILT? So I can really understand, and everyone listening, when you’re collaborating at that level. When you’re having that inter-discussion about the internet of credentials, essentially. Having that TCP/IP really, to use that analogy, for having that credentials layer. That’s a big deal for every aspect of literally every application, and every person in the world really can benefit from this.
I’m wondering, why would Microsoft pay attention to little KILT, little KILT Protocol? What’s in it for them? What’s the reciprocal and mutual benefit? Because clearly, no disrespect to you, they have the money, the power, the capital, the centralised systems. But what they don’t have is the years of experience that you’ve had and you’ve built. So are you ahead of the game and they are catching up and working with you for that reason or what’s going on here Ingo?
Ingo [00:31:23] I think in the beginning of this Decentralized Identity Foundation it was, just, let’s gather the people and start to work on standards. That was the idea. So it’s more like really doing something together and being bigger. And even Microsoft isn’t big enough. They need us. It’s not only us. They need the 200 companies in there as well. And pretty quickly, actually, we took it away from the company-to-company talk because that doesn’t really make sense, because then everybody has their own agenda.
What we did is we asked and we were successful in asking the World Wide Web Consortium, the W3C to handle the standardisation process for us. So everybody now comes to the table and has their ideas. And so Microsoft has the same say in this as we do. And we all go to the standardisation bodies, bring in our ideas and what comes out is the standardisation. And we say beforehand, no matter what comes out, we are going to agree on that. Right? That’s the stuff that we did.
Brad [00:32:31] So it’s almost like the UN, Ingo, for credential standardisation, for a revolutionary protocol that’s going to change the game. Once the world comes together on this.
Ingo [00:32:46] It’s not meeting every day like the UN, but it’s actually…(laughs).
Brad [00:32:50] It’s mind boggling because we talk about DeFi but we have to have those board members at the dev table. And you’re one of them. So how does it feel to be one in two hundred approximately who are contributing to what is potentially — without trying to understate this — a game-changer for the entire world? I mean, as revolutionary as the internet was, this could be also something of that magnitude. Would you agree?
Ingo [00:33:14] I wouldn’t say… I would say that what we do with credentials and digital identity is a base layer which is needed for the next generation of the internet, which we normally call the Web 3. Which also needs some more things. But one of them is identity. Definitely. So you have to be able to do digital identity in a way that is self-sovereign — that’s absolutely necessary. No way around that.
So we are important, but we are only a building block within something much bigger — that is the Web 3 — with things like infrastructure, things like being able to produce blockchains for dedicated use cases, like Polkadot does. Where we need decentralised storage like Filecoin and IPFS does. I think all those things basically have to come together to actually change the world of the internet and bring us into a new and a little bit better scenario with the Web.
Brad [00:34:23] Well said. And you know what’s great is that you’re embedded, as you articulated. You’re a feature embedded in that layer, that fundamental foundational layer that is going to potentially sweep the globe in that Web 3 scenario. So you’re not something built on top. You’re actually embedded and built in as a key component with the credential aspect and the verifiable credentials specifically.
So let’s keep going, because there is so much to unpack. And it’s really exciting to talk to you. Your background — I just want to touch on that briefly. So that people understand again, you didn’t just move from an everyday job to build this. You had a lot of experience behind you. So do you just want to give yourself a bit of a plug.
11. INGO’S BACKGROUND
Ingo [00:35:06] Yeah, so, after studying I had my first startup in the 90s of the last century. That was something completely different. It was medical informatics. And then we sold this company in 2000, I think, and that was nice. But then I did the thing that the normal serial entrepreneur doesn’t do. I didn’t set up the next company. I went into industry. And I think that was a good learning experience for me, because when you are always an entrepreneur and you’re always the boss, then you actually don’t know, don’t learn how the structures work and how complicated and complex structures work.
So it was very, very healthy for me to go into big industry for 12 years or so. And I worked mostly with huge publishing companies and media companies and made my industrial career there. And then after that I decided, now I’ve actually seen both things. I’ve seen the small companies, I’ve seen the tech, but I’ve also seen how you actually build business and what the mindset of those people is and what they actually require and how you can talk to those guys. And that’s a knowledge that is really, really valuable.
And then I decided, when the blockchain thing was coming up, I decided, OK, this is actually the big chance in my life because I understand this technology. How cool. And I know how to build a business and I know the surroundings. I know the needs of the industry. And I can still speak to the blockchain scene people and be respected by them because I studied the right thing. So why not build something there? And then, yeah, I left my everyday job as a CTO and said, OK, now let’s give it a try and build something which is actually useful for the world.
12. KILT USE CASES
Brad [00:37:13] Well, let’s start with that comment for the next point of discussion, that’s useful. That is such a rare proof in this space. As you know, with blockchain and crypto coming together to be known as the crypto space, utility and use case, real proveability when it comes to being applied and useful is a rarity and a gem, even today. So are you confident that you really do have something that isn’t just a narrative, isn’t just another scenario with the token economy, but actually something that is genuinely going to be applied and useful for the everyday user who more importantly, does not even need to know about the blockchain.
Ingo [00:37:51] Yeah, we did a lot of research on that because actually, the idea behind the whole thing of KILT is do something useful and not do something to get rich quick or something. So it’s really about use. And we thought a lot about that. And many of the decisions that we have made are actually driven by this “use” thing.
So we were seeing that digital identity is really, really interesting. And we were also seeing that everybody is talking about the digital passport and how useful that would be. Actually, it might be useful in some edge cases, but talking to politicians, actually, it’s not going to happen in the next ten years. Because the politicians or the governments, they have a monopoly on identity right now and they don’t want to give it up. And let’s be also fair, it’s working for most people. Those people where it doesn’t work — when you don’t have a passport, when you are a refugee — for those people, it doesn’t work in a nice way.
My passport works nice, actually. So I don’t need to replace the very, very simple plastic card with a piece of really complicated technology. That’s really hard to explain to someone living in Australia and Germany. And this is maybe going to come — but not today, not tomorrow.
But then we saw that there’s a huge need in industry actually to have verifiable credentials for services and for things inside the internet. Because the only digital identity mechanism that we have is the OAuth2, which is basically the thing that the GAFA use to centralise the data. And it seems to be quite OK — not understandable for me — but it seems to me seems to be quite OK for people to have their credentials stored with a big American company and not with themselves.
Brad [00:39:56] No allusion there. Wouldn’t be F and B together, would it?
13. WHY POLKADOT?
Ingo [00:39:59] It would be nice if we change that, but obviously this is also not the biggest necessary use case. The biggest necessity use cases are actually for companies, because when I build a product and this product owns a credential, then the credential is part of the value of the product. Right? And then if this credential or the validity of this credential is not with me — it is with Facebook or whoever — this is not acceptable for me as a production company. They need that. So then they need this fully decentralised machine, actually, where there’s no trust needed, where there is truth in there. Right? And there, blockchain is needed, by the way. This is somewhere you can do something useful with blockchain.
And then you come to the next phase where you go to potential industry partners and say, hey, we’re building this thing and it’s a fully decentralised blockchain and it has the truth in it and it holds your credentials and you hold your credential but it holds the validity. And then they say, OK, nice thing. But unfortunately, your blockchain produces unpredictable production costs. Because sometimes the gas is five euros and sometimes the gas is fifteen euros and sometimes it’s twenty four. And actually we can’t produce things like that because we don’t know how expensive the product is going to be in production so what price point would we set?
And then you could say, OK, let’s do a permissioned blockchain like Hyperledger, or whatever, and go into that and then you have a predictable price. But unfortunately then you don’t have the truth in the system, right? So you have a dilemma there.
And this is basically why we moved to Polkadot in 2018 because Polkadot is solving this problem. I think it’s the only technology out there which we have which solves this problem. Because when I have this — it’s called a parachain lease — I actually can build a small blockchain and have predictable gas prices, so I can say making a credential in KILT will never cost more than €0.10 or something. And then they can build their production costs on that.
But I can also say I have the truth of a truly, fully permissionless blockchain in there because I can send my blocks to the Polkadot Relay Chain and have them verify it for me. And if they are good, then they have the truth in the system again. So I have the mathematical truth and I have the price stability which I need. And we are really trying to make things which are useful and we are reflecting with the people who will use them later. And when they say it doesn’t work this way, then we use the technology or choose the technology that can actually fulfil the requirements of the potential users.
Brad [00:42:57] And can I just jump in there? Because, I mean, there’s a lot said in there. So clearly, you’re the sort of person who’s paying attention to the optimal blockchain platform; the optimal blockchain, full stack of services and provisions, tools and all the way down to that fundamental code. Now, you talked about Polkadot. Again, everyone knows I’m a fan of that, but I am certainly agnostically positioned in all the space. So I’d imagine you would be too, whether it be Polkadot or whether it be something in the future. The absolute criterion for you is that this system, whichever it is, is the best in the world in what you need. And right now Polkadot clearly is that for you.
Ingo [00:43:37] Yeah, that’s true. We were brought there by this dilemma of price and truth, so they were solving the price/truth dilemma. So that was clearly where we wanted to be. So this is why we started developing the whole thing on Parity Substrate in October 2018. Parity Substrate was in the beginning at that time, so it improved a lot.
Brad [00:44:04] That’s why we had the canary network.
Ingo [00:44:08] And then it turned out that it’s also a nice community actually. And this is another reason to stay because the Polkadot community obviously attracts very, very bright minds. And that is also a thing where we feel very well. Yeah, we feel very well talking to and exchanging with people in a relatively small community when you compare it to Ethereum or so. And a relatively small community which has bright people in there who come up with new ideas, who also criticise you in a positive way.
Brad [00:44:45] Well, let’s talk about that then Ingo, because we had the co-founder of Ethereum move across and build Parity, Gavin Wood. Then he tinkered with the highest standards of tech to build out what has now become the Polkadot ecosystem. We see that Substrate now emerged. We see Kusama with the canary network, and we see again, from many other key parachain initiatives or potentials, we see also very complex and emerging tech moving out for specific purposes, specific use cases and even more that is just really on the edge of the future of decentralised technologies.
So this is a very big deal, knowing that we’re talking about interoperability here. Cross collaboration, the potentials of working and enhancing even the likes of Ethereum, for example, and many others to come. So would it be fair in saying that you’re also not only pro Polkadot, but you’re pro interchain. You’re pro bringing things together just like you are with the credentials built into this foundational layer of the future?
Brad [00:45:44] Surely, because when we listen to Gavin, he doesn’t talk solely about Polkadot, he talks about what’s coming and integrating so much more into a more seamless Web 3 world.
14. XCMP and POLKADOT RELAY CHAIN
Ingo [00:45:56] Yes, sure. So when you do base layer technology, interconnecting is crucial because people have to somehow use the KILT Protocol. And there are different ways to do that. So for industry players we provide a nice JavaScript SDK on top of that so that they can use their own resources, basically. Because normally big companies have some JavaScript developers. To build KILT applications on top of that, that’s the industry part. We have to cover that.
We are very happy about XCMP now coming up, the cross-chain messaging protocol, so that we are able to natively speak through the Relay Chain in a very secured way to other projects which are also in the Polkadot ecosystem. And I’m very excited about what’s going to come up there. This technology is brand new, right. So there’s no one really out there already using it. It’s just there. We now know how it works and we start talking with the first projects and say OK, and could we send messages here and there, and start collaborating on this level as well? So this is too new to talk about, basically, but this is very, very exciting for us. And I think it’s a great chance to be an early part of this ecosystem, because in the beginning, it’s going to be relatively small. Right? This is going to grow. Yes.
And it’s good to be there in the beginning already and have some use cases also inside the ecosystem where we can show that communication through the Relay Chain is very valuable for projects to be part of this ecosystem. This will draw more people inside the ecosystem, which is good for us, because then we have more partners to talk to. And it’s also good for them because if they wait a little longer, they will already find a functioning infrastructure for a lot of problems that they will see.
Brad [00:47:52] Yes, exactly.
Ingo [00:47:54] And so it’s good for us to be in early and it’s good for the others that we are in early because we can solve some of their problems. They don’t have to wrap their heads around them.
Brad [00:48:04] Yes. Well, I want to dig a bit more because everything you’re saying suggests meaningful partnerships, which was on my agenda later in the conversation. But let’s do it now. So earlier in the conversation, you mentioned that blockchain itself is something you are knowledgeable about, or you had some understanding of. That makes you rare. Firstly, when you couple that with all the expertise you had technologically and even in your role as leading out some very important, I guess, engineering roles, important leadership roles, all the things you’ve done in the past.
Now, when it comes to crypto, we see a lot of partnerships that aren’t meaningful, that are just hype-driven and fomo-driven and drivel-driven. But then we see the ones that aren’t. You know the difference pretty quickly when you start researching why these partnerships happened.
What’s interesting about you is that you could potentially partner with literally every high quality initiative that is useful in and of itself and in inter-blockchain, inter-multchain scenarios with other core layer one solutions or layer one foundational technologies. And then even outside of the scope of all of those in the mainstream, too, with the compatibility you mentioned, with the alliances you’re forging. So let’s start with the smaller ones. With the Polkadot arena, with the Polkadot potential. Can you tell us a bit more about the meaningfulness or the importance of these relationships you are forging and partnerships. For them, what’s the mutual benefit and why are they saying, yes, partner with us? Because it is happening. It’s unfolding now.
15. ECOSYSTEM COLLABORATION
Ingo [00:49:34] Yeah, that’s actually pretty simple. This credential thing and identity thing, I would call it, this is a lot of work. And it’s really not nice if you have a project which needs to identify a person, say you’re building up an exchange, or whatever. If you have a DeFi system where you need some kind of credibility for people in there to calculate their credit score or whatever. You are very often confronted with the problem that you have to identify a person. And then you could go and implement this yourself because there’s a standard or they’ll just use the standard implemented.
Then you will notice, OK, the standard is maybe not enough. We need some things on top of the standard, like delegated trust and stuff like that, which you come to when you think about it and which are not described in the standard but are implemented already. Then you have two choices. Either you delay your project by one and a half years and start implementing the stuff, or you just use the stuff that is already there.
Brad [00:50:46] Or you call KILT. That’s what you do.
Ingo [00:50:50] That’s it, we save the people one and a half years of development work.
Brad [00:50:56] So let’s be real, I mean, we’ve seen the value of some of these real and meaningful partnerships. Chainlink has led the way with the Oracle endeavour, and I’m sure you’ve seen that because they are essentially an agnostic technology that’s important for the whole space. And they’re working across a multitude of different layer ones. And even layer zeros, as we know Polkadot is.
So without, again, trying to add any kind of hype, it’s really impossible not to when we know that this is a technology that doesn’t really exist outside of the scope of you in the Polkadot context, I would imagine. Or if it does, there’s few of them. And that means that there’s a very high chance that there’s going to be a vast amount of partnerships because they would all want to add this credential layer in.
Ingo [00:51:39] Exactly. I think there are two types of partnerships. There is the type of partnership where people just use our system. You don’t have to ask us for that. It’s open source. So that’s the easiest partnership, when we’ve just noticed “Whoops, they are using KILT. That’s cool.” That’s cool for us. But then there are also dedicated partnerships. And we use those partnerships for building things together.
So this happens, for example, as I said in the beginning with the Polkadex example, that we set something up together because nobody has done that before and we decided that we have to do that together. Right? Or with Moonbeam, we also have a partnership. We’re building something. And this thing only works when we bring the devs together, actually. If we can’t do it alone, they can’t do it alone, let’s let’s work together. This is a partnership which really makes sense because it makes the thing bigger.
And then we do partnerships and actually also bring development resources to the table. In the normal case, say, the 95% case, it’s just a project which is building something and says, OK, if we use KILT, then we’re faster on the market and it also fits into the ecosystem. And let’s just use those guys. Maybe they call us and say hey, we use you. And of course, they can.
Brad [00:52:57] This is so fantastic. It’s fantastic to know this is already happening now. You haven’t even launched and really explored publicly what’s unfolding with your whole economy.But to hear that utility is built in now, this is a big deal. Because sometimes we see white papers at launch with other projects, as you would appreciate, or not. So we like to see years of tech built in, years of the team building. And you’ve been doing all of that.
But on top of that, now you’re starting to be able to be useful, prelaunch, with something that’s going to fuel a broader, more experimental economy on top. So this is a big thing, especially knowing that this is related to something that’s underpinning so much more above, like we see with layers twos and all the applications that can come forth on these new and emerging blockchains.
Brad [00:53:43] So one of the things you said is “simple”. And often the case is with a great CEO, they won’t explain that simple means very technical. But it does. You know, for you to get to something where it’s seamless and easy and simple for me, it means that it’s years in the making for you. And some of those key things that have come up are things like creating, issuing, verifying, presenting and also claiming when it comes to the digital credentials.
So do you feel like where you are in your roadmap now, that you can actually achieve those things in reality? When you see these partnerships, when you see these other businesses and entities and protocols start to want and need you as they emerge for the future, are you applied now? Are you usable? Are you ready to go? And is this moving forward something that’s only going to grow and prove itself with real functionality and real application?
Continue to Part 2 of “Essential Credentials for Web 3.0” interview.
