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Satoshi’s Seed: From Mental Slavery To Bitcoin Emancipated Identities
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Satoshi’s Seed: Don’t Skeuomorphic Bitcoin Self-Sovereign Identities!
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ENS DAO delegates offer perspective on DAO governance and decentralized identity
Earlier this month, the Ethereum Name Service, or ENS, formed a decentralized autonomous organization, or DAO, for the ENS community.
Cointelegraph spoke to two ENS DAO delegates who applied for the opportunity to represent the community and stay involved in the decision making process: Victor Zhang, CEO of AlphaWallet, an open source Ethereum wallet, and Gregory Rocco, co-founder of Spruce, a decentralized ID and data toolkit for developers.
Zhang spoke about his experience as an external contributor to ENS and an early supporter since 2018. Zhang initially sought to help ENS by offering Alpha Wallet as a user-friendly tool for resolving .eth names and cryptocurrency wallet addresses. Essentially, if a user inputs an .eth name in the AlphaWallet, it will show the wallet address, and vice versa using reverse resolution. AlphaWallet also supports ENS avatars.
Zhang, also known as @Victor928, is among the top 30 delegates with the most voting power. When asked about how he plans to keep contributing to the DAO, Zhang said:
My biggest concern currently is voting power. The second largest voting power is Coinbase, a big corporation. We need to make sure the ENS is always a public group, always a neutral service, not influenced or controlled by any single party for its own interest.”
Related: ENS’ director of operations says that DAO-based governance ‘has always been the plan’
During the ENS Token airdrop, 100 million total ENS Tokens were distributed. While 25% went to users with .eth domans, another 25% of the tokens were allocated to those who “contributed in significant ways to ENS over the last four years.” The other 50% remains in the DAO community treasury.
As an external contributor, Zhang received 46,296.3 tokens. At the time of publication, this number of tokens amounted to $3,320,311.15. Zhang is among 27 contributors to receive this exact amount.
Zhang confirmed that he is, “holding it all. I’m not cashing any tokens out. As long as ENS continues to grow in the right direction, I don’t see any competitors. So that means the value is much bigger than the current market cap, if we’re looking at it as an investment.”
The day of the airdrop, Brantly Millegan, AKA “Brantly.eth,” ENS’ director of operations, tweeted about the “responsibility” bestowed upon users and added how it’s up to the ENS community to use decentralized identity “wisely.”
you were not airdropped free money, you were airdropped responsibility
— brantly.eth (@BrantlyMillegan) November 9, 2021
Gregory Rocco from Spruce discussed this concept of decentralized identity with Cointelegraph. He developed Spruce, a secure sign-in with Ethereum, or SIWE software, precisely to help users own and control their digital identities, rather than give up that data to large corporations.
He is referring to large centralized corporations such as Google, Twitter or Facebook that offer web2 users the option to login to third-party apps and services using their respective Gmail or Facebook details instead of having to create and remember individual usernames and passwords for each new account.
According to Rocco, these traditional logins have the “ultimate control” over user identifiers because “if Google pulled the rug on you, you wouldn’t just lose access to Google services, you’d also lose access to every service that you signed into using Gmail.”
The Ethereum Foundation and ENS recognized this issue and announced a Request for Proposal for the creation of a Sign-In with Ethereum package using Oauth. Spruce was selected to offer a decentralized identity alternative in September.
The goal of SIWE is to enable users to control their public identifier by owning their private keys or as Rocco put it: “‘your keys, your crypto’ but also ‘your keys, your identifier.’” Not only does Spruce’s toolkit establish a blockchain-based identity, it also enables verifiable proof of identity, ownership of assets and DAO membership. This is important in order for a user to prove his or her value to the ENS ecosystem and earn rights to upcoming airdrops.
When asked how it feels to be a delegate, Rocco said:
“I feel this motivation to stay on top of everything for ENS and be on board and establish that social contract. I believe in the future of ENS and support participation in user-controlled systems. That paradigm is the first step towards enabling users to have more control over their identity and data.”
Decentralizing identity ultimately empowers the ENS DAO and builds up its credibility as a truly decentralized organization. Both Zhang and Rocco are champions of collective ownership and hope to further promote the usage of ENS in the web3 ecosystem.
ENS’ director of operations says that DAO-based governance ‘has always been the plan’
On Monday, distributed domain protocol Ethereum Name Service, or ENS, launched its own governance token in an effort to distribute voting rights for its new decentralized autonomous organization, or DAO, to active users of the ecosystem.
Cointelegraph spoke with Brantly Millegan, ENS’ director of operations, to learn more about the nonprofit’s decision to shift to a DAO model and his thoughts on the power of the ENS community:
“ENS is an open public protocol. The core components of ENS are decentralized and self-running (e.g., no one can take away another person’s .ETH name), but there are a few things that require some human discretion.”
He noted that previously, ENS was controlled by a four-of-seven multisignature scheme, with members of related projects acting as keyholders. They facilitated upgrades, managed the .eth pricing registration mechanism for domain names and handled the ENS treasury’s funds.
Replacing this multisig and passing ENS governance over to the community via a DAO “has always been the plan,” however, according to Millegan:
“Weu20re doing it now because we think both ENS and the DAO space have matured enough.”
When users claim ENS tokens allocated in the protocol’s recent airdrop, the service requires participants to immediately vote to ratify the proposed ENS Constitution and to authorize the DAO to take over the functions of the multisig.
Community members are also required to delegate their future DAO voting power before claiming their tokens. The delegate process allows a fewer number of active users to make decisions for the ENS community, rather than necessitating constant interactions from every tokenholder in the space each time a fresh vote is required. Though a large number of ENS contributors volunteered to act as potential delegates, users do not have to choose only from the platform’s suggested list. Rather, they may delegate their votes to any address they’d like, including their own.
Related: Mark Cuban issues burn notice on offensive ENS domain
Concerning ENS token distribution and the operation of a fair governance model, Brantly told Cointelegraph:
“The ENS DAO will [be] one-token-one-vote, but we’ve chosen distribution rules that favor egalitarianism and users over speculators.”
He explained that the nonprofit allocated tokens based on how many days an individual has held even a single ENS name, rather than by the number of domains an individual has registered.
Users who paid renewal fees up to eight years into the future are scheduled to receive an additional cache of tokens in the airdrop, and for folks who have their primary ENS name set, the number of tokens they are otherwise entitled to is multiplied by two. Participants on the protocol’s Discord and Twitter are eligible for additional claims as well.
The DAO will ultimately be in charge of spending any revenue received by the protocol’s nonprofit organization. According to ENS Constitution Article 3, funds are to be allocated to ENS development, the broader ecosystem and public goods within Web 3.0. Millegan noted that “there is no profit sharing motive” and that the token-based DAO system “allows for a large amount of flexibility.”
Within 24 hours of its launch, the new ENS governance token had already reached a
Adobe offers users the ability to verify NFT marketplace creations through metadata
Many nonfungible token (NFT) marketplaces are allowing digital collectors to identify artwork based on the wallet address of its creator through a partnership with software giant Adobe.
In a Tuesday announcement, Adobe said it would be partnering with major NFT marketplaces including OpenSea, KnownOrigin and SuperRare to allow users to verify the authenticity of the digital content. Adobe’s Content Credentials can add an NFT creator’s wallet address and social media information to the metadata of tokens listed on the marketplace.
“This partnership furthers our commitment to empowering users with more tools as we collectively rethink how we transfer digital goods on the internet,” said an OpenSea spokesperson. “Working in tandem with market leaders like Adobe and the growing NFT community, we will keep providing features to increase trust and transparency across the metaverse.”
The feature will still seemingly have the option for NFT creators to remain pseudonymous, with them choosing to display crypto addresses linked to their online identity or full real social media profiles. Rarible, another marketplace that offers Adobe’s digital verification system, said the feature would help “fight misinformation with attribution and verifiable truth of content.”
Related: Bragging rights: Twitter previews verification badge for NFT profile pics
According to data from DappRadar, OpenSea is the largest NFT marketplace by daily trading volume, reported as more than $50 million at the time of publication. SuperRare, Rarible, and KnownOrigin rank far below with roughly $1 million, $328,000, and $42,000 daily trading volume, respectively.
The platform recently faced criticism from many in the crypto space after OpenSea head of product Nate Chastain was accused of pumping up the prices of NFTs that he featured on the homepage before selling. OpenSea said its employees are barred from buying and selling collections that are being featured on the platform.
How Decentralized Identifiers And Bitcoin Fix The Web
On October 4, 2021, Facebook, along with WhatsApp and Instagram, disappeared from the internet.
Their DNS names stopped resolving, and their infrastructure IPs were offline. They were completely disconnected from the internet. At the same time, it was reported that 1.5 billion people allegedly had their personal data stolen from Facebook and posted for sale. To make matters worse, anyone who relied on Facebook to log in on third-party services was in the dark as well. The sign-in buttons we see on so many web pages are a symptom of the problem.
Sign-in buttons on web pages indicate the problem with online identities.
And if that weren’t enough, the day prior, whistleblower Frances Haugen revealed on “60 Minutes” that Facebook has long maintained a culture that “chose to optimize for its own interests” over what was good for the public.
But it doesn’t have to be this way. In recent weeks, key members of the World Wide Web Consortium (W3C), led by Mozilla, have stymied efforts to approve a web standard that would allow billions of people to privately and securely control their own data and identities. The proposal — now years in the making and mere months from the finish line — is known as Decentralized Identifiers (DIDs). These W3C members, in an egregiously opportunistic move, are protecting their own revenue streams, for themselves and for their political ideologies, at the expense of billions of people who would benefit from such a web standard. It seems Facebook is not alone in fostering a culture of putting internal business interests above the public interest.
Without proof of identity, an individual cannot access banking services, gain employment, or receive voting rights. According to the World Bank, 1.1 billion people are not able to formally prove their identity. The majority live in Africa and Asia and more than one-third are children who are unregistered. The United Nations identifies “preservation of identity” as a fundamental right of a child (Article 8 of the United Nations Convention of Rights of the Child). In Europe, the General Data Protection Regulation (GDPR) standard lacks provisions for user authentication. Identity thieves can take advantage of this oversight to steal data from data pools, leading to the rise of identity theft and online fraud. DIDs can solve all of these issues.
Corporations that own our personal data in their centralized systems have proven to be hopelessly inadequate stewards of that data. The world has seen a massive increase in identity theft, and the growth of surveillance capitalism — an entire shadow industry that analyzes, sells, and monetizes our data. In 2018, 2.8 billion consumer records were exposed through data breaches resulting in an estimated cost of more than $654 billion. The 2017 Equifax data breach exposed the personal data of more than 147 million people, affecting 56% of Americans. Recently, it was revealed that Syniverse, a company that routes billions of text messages for the largest mobile carriers, quietly disclosed that hackers were inside its systems for five years.
We should be the ones who own our IDs, not companies. As apps and corporations have become our de facto identity controllers, users do not have any control over their own identities. Between the societal and financial implications It is a moral imperative to implement the DID web standard and empower users to be able to secure their own identities. If the self-custody ethos is “not your keys, not your coins,” the ethos for DIDs is, “Not your DIDs, not your identity.”
What Are DIDs?
But, how do DIDs achieve this and what does this have to do with Bitcoin? First, we need to learn how DIDs work. DIDs are cryptographically-secured IDs that users create, own and control — independent of centralized identities. They include robustly decentralized implementations, protecting against tampering and interdiction.
DIDs are a simple, semi-human readable, syntax that describes a method and identifier.
DID syntax
Although a DID can be used to describe something as simple as a private key, the DID identifier will often point to an address where a corresponding DID document can be found. In its simplest form, the public DID document will contain public keys and endpoints. Endpoints are destinations on the internet where our encrypted and private data lives.
By anchoring the initial DID document and any subsequent changes to the blockchain, throughout our lifetimes, we can prove the irreversible chronology of edits to our DID documents over time. In the following example, imagine you anchor a DID document to an address on the blockchain so that people can find your data when you give them your DID identifier. Occasionally, any changes you make to the document over the years (as when you get a new phone and roll over the keys) will be anchored into future blocks on that blockchain. (Fun fact: Satoshi Nakamoto’s original label for the Bitcoin blockchain was a “timechain.”)
DIDs and Bitcoin are the perfect synergy
Blockchains are not technically required for DIDs. However, DID documents ideally reside within a framework that robustly solves the Chronological Oracle Problem, and is accessible to third parties in a tamper-proof manner that the individual owner can fully control. The most secure and most censor-resistant open blockchains, like Bitcoin, are ideal systems for anchoring DID documents, since blockchains are a decentralized, immutable and chronological event record that the entirety of humanity can agree on. The blockchain attests to the ordering of events, and proof of work is what ties that to our perception of time.
In other words, you can publish new changes to your DID document, over a lifetime, and the blockchain ensures that everyone can agree that the document is accurate and up to date. Think of it like a Google Doc that no central authority controls. A system like this needs to outlast every company, and provide a service that can last for a lifetime, or more. Thus, the more robustly decentralized, secure and long-lasting the blockchain, the better. There is no better choice for securing DIDs than Bitcoin — everything else is a risky experiment.
Not Just For Logins
And DIDs aren’t only for logins. We can attach these identifiers to anything in the virtual world.
Imagine a future where DIDs are attached to everything, such as any Schema.org object — the agreed-upon standard for common semantic data. These objects define practically everything we interact with in cyberspace: grocery lists, music playlists, videos, block quotes, blog posts, news, events, organizations, products, reviews, places and so on. The lists of things DIDs can be applied to are practically endless.
DIDs are ideal for organizations issuing “Verifiable Credentials” to user DIDs such as digital diplomas, proof of employment, licenses, deeds for property, bar certifications, notarization, etc. The organizations maintain their own DIDs and issue the Verifiable Credentials to the DIDs that users create on their own — that way, every institution and individual is completely in charge of creating and sharing their own identities. Each user might have many different DIDs, for all sorts of personas.
There are many different DID methods and projects for each of these methods. Below, we’ll examine the ION method, which is an open network that uses Bitcoin for chronologically-securing DIDs. Microsoft contributes to ION’s public development through the Decentralized Identity Foundation (DIF), as do many other entities that want to become the leaders for issuing and managing Verifiable Credentials. Neither Microsoft nor any other single entity controls ION.
ION And Bitcoin
ION is an open, public, permissionless Layer 2 Decentralized Identifier network that runs atop Bitcoin to enable robustly decentralized, interdiction-resistant W3C DIDs at scale. Unlike other DID protocols, ION is a purely deterministic sidetree protocol, which requires no special tokens, trusted validators, or additional consensus mechanisms; the linear progression of Bitcoin’s timechain is all that’s required for its operation.
ION settled on Bitcoin as its blockchain of choice, since Bitcoin is the most secure, most decentralized and most censor-resistant blockchain. Bitcoin is the one and only timechain.
“So, for us, Bitcoin was a necessary condition for success. The reason it wasn’t a super hard sell was that it was something we had to have and we knew we couldn’t own it. We wanted something that was differentiated and decentralized — because otherwise we could do this with a database like Azure… With Bitcoin, one of the biggest elements of this — and this did take some understanding — was security. All of those other use cases being possible is actually a symptom of no one controlling it. What we really made our decision based on was the decentralized nature plus the security. It’s the cost of attack and how you order transactions that’s important. When we started crunching the numbers, we realized that Bitcoin was the only chain that would probably be too costly to attack.“ –Daniel Buchner, Microsoft Decentralized Identity
ION is a privacy-preserving framework. All DIDs are public, similar to the way the world wide web’s Domain Name System (DNS) is public. Yet, DIDs hold no personal data. ION only cares about documenting encryption keys and routing endpoints. DIDs are not assigned to individuals by a third party. Instead, users create their own DIDs and sign operations from their own private wallet to emit them either directly to the Bitcoin blockchain or to an ION node which will efficiently batch many of the encrypted operations into a single Bitcoin block transaction.
A single Bitcoin transaction could, in theory, batch millions of ION operations. This alone invalidates the fallacious and disingenuous argument that a single Bitcoin transaction is supposedly inefficient. Nothing could be further from the truth.
ION nodes observe each new block on the Bitcoin blockchain, for new ION operations, to stay in sync. There is no need for consensus between ION nodes — it’s purely data-deterministic based on the latest state of the Bitcoin blockchain.
ION is built to scale to support the entire globe. It’s batching operation can process thousands of DIDs per second, tens of billions of operations annually. Even if, someday, the cost of a single Bitcoin transaction were to rise to $100, each DID update would cost a user roughly 1 cent, with the average user perhaps doing 100 of these operations in a year. Such operations are infrequent in daily practice, for example, rolling private keys from an old phone to a new phone.
ION can support the entire globe with over 50 billion DID operations per year. Although not a requirement, anyone could run an ION node with a Raspberry Pi and a very large hard drive. The drive can even be pruned to 4% of total data.
Verifiable Credentials
The very foundation of Verifiable Credentials is the ability to sign a proof from someone to someone else. For instance, your employer might use its DID to sign employment credentials to its employees’ DIDs and the employees can go anywhere and prove that they, in fact, are employed by the company.
In this case, ION is just used to look up the public keys behind the IDs and do the signing. The employee’s and employer’s verifiable credentials are then made available for others to verify, when permission is granted by the user.
Source: Browsers 3000: “ION, Decentralized Identifiers Using Bitcoin & IPFS”
Understandably, people might be concerned about how this technology could be used by governments. DIDs on their own are relatively pure. The alarming part is in how authoritarian entities might issue credentials from their own centralized servers. However, credentials can just as easily be attached to centralized or federated IDs that offer us no control whatsoever.
The fact that DIDs can act as a conduit for potentially unjust credentials is entirely orthogonal. DIDs are created by users and the verifiable credentials that users add to their own DIDs are issued from centralized entities that can be torn down.
It can be helpful to think of identity as clothing. Today, centralized entities force us to wear the clothing they issue us in their online prisons. DIDs are clothes that we sew ourselves and independently choose to wear for our different personas. DID wardrobes are flexible — we can choose to wear pseudonymous invisibility cloaks if we wish. As long as we retain our private keys, no one else can wear our clothing. Verifiable credentials are the badges, or scarlet letters, that society coerces us to attach to certain types of clothing. Badges we wear on our clothes can serve as part of a trust network or can be coercive. The timechain is the incorruptible DNS-like ledger that we use to communicate where our clothes can be seen.
The coercion to attach badges or scarlet letters to our clothing is another name for society — this happens with or without DIDs. Bitcoin helps us build better and more just societies, while DIDs act as an identity layer within those societies.
DIDs + Identity Hubs = The Semantic Web
DID documents can point to routing endpoints — places where your data is securely stored. The DIF Secure Data Storage Working Group has a project developing personal data stores or “Identity Hubs” which are private servers where users will keep an encrypted vault of their personal data.
Companies like Umbrel are positioned to be the home Identity Hub providers of the future. For those unable or unwilling to own their own data, trusted third parties could provide data custodial services. The self-custody ethos still applies here: “Not your server, not your data.”
DIDs are all public, just like DNS domains. Individuals or services can go to anyone’s Hub and ask it questions, and the user controls who gets access. A developer could build a crawler to every DID and look for secondhand product objects and render a client-side UI that looks a lot like Craigslist.
The identity web is the semantic web that the world always wanted. There’s no need for crawling web pages in a DID-based world. Apps or users can cURL the data of any business or any person, and prove all sorts of things from trusted parties. This makes the semantic web accessible between peers and businesses alike. Below, we’ll explore different use cases for this semantic web:
Messaging
With DID Communications, otherwise known as DIDComm, Decentralized Identifiers plus Identity Hubs provide a DID-encrypted data storage and messaging layer that can replace one-off protocols (e.g., Signal) with a universal standard for encrypted communications between peers.
If you know someone’s DID, you can look up their routing endpoint, look up their public key, and send them an encrypted message, without an intermediary, and that message can land in their private data store where they can read it in a client-side messaging app. This means developers can build apps, like Signal or Telegram, on a standardized infrastructure where the app is mostly UI with some affordances built around it. DIDComm can’t be censored or deplatformed. Users are given complete control of their interactions. It is plausible that Twitter could incorporate DIDs and Identity Hubs for its Bluesky project.
While Bitcoin Lightning apps, like Sphinx, are becoming popular for messaging, DIDComm is a more robust solution. Instead of sending messages with an elaborate Lightning apparatus that piggybacks infrastructure ill-equipped for app traffic, it’s easier to use a standard encrypted layer that’s actually designed for application traffic. And while Lightning is an amazing, life-changing technology for transferring money, it’s less than ideal to attach messaging to transaction infrastructure that fundamentally cannot handle all the things it needs to. Additionally, Lightning requires you to always have a Lightning node online, to resolve lookups, which isn’t required with DIDComm.
Accreditation
Many activities in our world require the establishment of trust between participants. DIDs plus Identity Hubs allow individuals, organizations and companies to publicly post credentials that others can discover and independently verify. For example, if you want to verify that a school is accredited, you can resolve a school’s DID and use it to fetch credential objects, such as an accreditation, from that school’s hub.
Travel
Today, your preferences, tickets, reservations and other travel data is strewn across hundreds of different hotel, airline and travel apps in a massive and unworkable mess. DIDs and Identity Hubs can help unify these app experiences.
Imagine you grant your hotel the ability to view and edit your trip object. You grant your rental car agency the ability to view and edit that same trip object and it is able to receive and react to the updates that you or your hotel makes to the trip. Your hub tracks all of the updates and you can visualize the trip with an app that is mostly client-side and UI-based. Your Identity Hub acts as a personal server, replacing the need for surveillance capitalism and travel aggregation services like Google.
Preventing Deep Fakes
Celebrities or politicians can issue DIDs and sign any text or video and add their signature for others to verify.
For example, if a web browser supported DIDs, a user could hover over content and see the signature and verify the origin of the content. This could, in theory, solve the problem of deep fakes. As long as any content is signed with a DID, it is possible to verify the source of that content. DID signatures can act as a proof conduit for anything.
Social Unrest
Frances Haugen recounted in her time with Facebook that she saw, “conflicts of interest between what was good for the public and what was good for Facebook.” This included amplifying hate, misinformation and political unrest.
While DIDs cannot solve all of the problems of the world, it can reduce misinformation through verifiable and trusted data signatures on any shared content. DIDs can help us identify the difference between bots intentionally deployed to sow misinformation and real humans who have good standing in their communities.
When users own their own data, surveillance capitalist corporations like Facebook would have a more difficult time manipulating our own character flaws and judgement. This in turn can help support the W3C’s own goal of fostering healthy communities and debate, while making it much more difficult for social networks and political parties to amplify hate, misinformation and social unrest.
Spam
Businesses and consumers experience costs of almost $20 billion annually due to email spam, in the U.S. alone. DIDs can solve any kind of spam, whether they be spam from phones, emails, text messages and so on.
Lightning apps like Sphinx propose fighting spam with very low fees, in hopes that it becomes too expensive for spammers to use in bulk. DIDs offer a superior solution by allowing users of any communications media to require senders to assert Verifiable Credentials with accreditations from trusted third parties.
For example, a user can choose to automatically mark any communications as spam unless they have DIDs that contain a matching ServiceChannel, ContactPoint or any custom Intangible and are in good standing with family, friends, the Better Business Bureau (BBB), AARP or their local chamber of commerce. DIDs would also allow services to trust users and obviate the need for those stupid “are you human?” tests to prove that you’re not a robot.
Phishing And Online Fraud
According to the FBI, Business Email Compromise (BEC) is an elaborate scam targeting businesses working with foreign suppliers and/or businesses regularly performing wire transfer payments. Email Account Compromise (EAC) is a similar scam that targets individuals. Fraudsters compromise email accounts through social engineering, phishing or computer intrusion techniques to conduct unauthorized transfer of funds. These scams cost businesses and individuals billions of dollars in losses per year.
Much of these crimes could be avoided with DIDs, which move authentications away from fallible passwords and into private keys embedded in hardware elements that are inseparable from devices, unless reconstructed through recombination of seed material that is nearly impossible for outsiders to reproduce.
Music Streaming
With DIDs and Identity Hubs, you could share your favorite music playlists between multiple music streaming services, friends or family. Instead of services each owning all of your playlists and keeping them in their walled gardens, you would store the playlist object on your personal server and grant access to different services.
New Business Models
Companies that would be disrupted by DIDs can explore new business models that provide novel services to users who are now in control of their own data. These companies can act as custodians to encrypted user data, where the user can still decide who can see what. In a world where DIDs are commonplace, corporations will need to ask permission for data and users will ideally choose to use client-side UIs that prevent data capture by those companies.
Companies can also find innovative ways to help users manage their private keys. After all, in a world of decentralized, user-owned DIDs, there is no “Forgot Password” button. Instead, users can rely on trusted custodians to manage their keys.
Companies can also create new ways for users to recreate lost keys from multiple factors and fuzzy recombination. Imagine being able to elect trusted guardians who can independently help you recreate a lost DID with a few clicks. In the event of a catastrophic loss, you can create new DIDs and independently reassociate them with verifiable credentials.
Web Browsers And The War Against DIDs
As one might imagine, corporations that make their money off of owning our identities are building up strawmen in order to prevent the standardization of DIDs in web browsers. While the W3C DID Proposed Recommendation does not technically require web browsers, DIDs would require browser integration to really shine.
For example, having a built-in wallet to manage DIDs/keys for your personas, and a UI that helps you pick which to use for which interactions, would make DIDs much easier to use. Secondly, you would want DID URLs to work in your browser’s URL bar, so that it quickly loads DID-relative content that the URL specifies, such as social posts from the personal data store associated with the DID, or importing a verified DID into your contacts.
Finally, you would want other DID-based APIs in the browser, like DIDComm messaging, which would allow any website to instantly enable users to privately message in their app without requiring any backend for the site to setup or manage.
The browser understanding DIDs, as a result of DIDs existing, is very much a goal. W3C members should put aside their cherished business models and seriously consider supporting web DIDs to help ensure personal privacy, identity and basic identity-based human rights.
What Bitcoin DID
Some W3C members, such as Mozilla and Google, have publicly opposed DIDs in web browsers. Reasons include some debatable technical concerns, but some have also voiced environmental concerns since DIDs elevate proof-of-work consensus methods used by Bitcoin. This argument is a bit like refusing to build a pipe factory because some of those pipes might be used for transporting fossil fuels, even though those pipes would be enormously beneficial to humanity. However, DIDs do not require the use of Bitcoin. Bitcoin just happens to be the world’s best “truth machine.”
Bitcoin’s energy consumption is wildly exaggerated in the media and appears to be used as a strawman by W3C member organizations who are resisting disruption to their business models. Blocking DIDs from becoming a standard in web browsers would undermine every W3C ethical web principle. The energy usage argument regarding proof of work for DIDs simply does not hold merit.
Proof of work is the only battle-tested and proven secure consensus method for blockchains. Alternative consensus methods, such as proof of stake, are still experimental, rely on human behavior, have known issues, can centralize over time and can fail to produce irrefutable history. The link between proof of work, time and heat is fundamental: an incorruptible distinction between past and future is impossible without heat.
For the expense of roughly 0.1% of total global emissions, or a small fraction of the energy spent on clothes dryers, Bitcoin provides the most secure global chronological information and monetary settlement layer while incentivizing renewable energy. Standby devices in the U.S. alone use more than twice as much energy as does all proof-of-work mining. The <video> tag in the HTML spec is directly responsible for orders of magnitude more energy usage than all proof-of-work mining, for less benefit — entertainment versus securing a base layer for decentralized property and identity.
Blocking web DIDs would be akin to blocking HTML on the basis that corporate data centers consume 1% of global electricity. Bitcoin’s share of 0.09% of global energy consumption (0.44% of global electricity consumption) is a rounding error, and its energy is sourced from a greater share of renewables than any industry on the planet. Furthermore, Bitcoin turns energy producers into technology companies — increasing revenue per kilowatt hour and acting as a shock absorber for the renewable energy sector, in a portable manner. As a tool to empower billions of people to obtain verifiable identity, employment, banking, voting rights and hundreds of billions of dollars in fraud protection, DIDs alone would be worth the relatively minimal negative externalities of proof of work.
If you believe the web should not cause harm to society, if you believe that the web is for all people and must support healthy community and debate, if you believe security and privacy are essential and that the web must enable freedom of expression while making it possible for people to verify the information they see, if you believe the web must be transparent and enhance individuals’ control and power, and if you believe people should be able to render web content as they want, then you must support an effort to bring DIDs to web browsers and the world wide web. The moral imperative is too great to ignore.
The world needs an internet that affords users the identity and data autonomy they need and deserve. And for the equivalent energy spent on Christmas lights, we can empower users across the globe and move humanity forward for the better.
This is a guest post by Level39. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
Regulators are coming for crypto: Is digital identity the answer?
The regulators are closing in. It’s one thing to unbundle market functions to their parts ― custody, aggregators and Prime Brokerage ― to satisfy institutional compliance departments. It’s another to keep regulators happy.
From the Financial Action Task Force pushing forward with its guidance for Travel Rule compliance to the still-evolving European Markets in Crypto-Assets regulatory framework, and the somewhat clumsily-handed U.S. infrastructure bill, the regulators are slowly tightening their noose, and I fear this may be the start of a multi-year staring match ― with the decentralized finance (DeFi) market now firmly in their sights, too.
Related: DeFi: Who, what and how to regulate in a borderless, code-governed world?
Could digital identity help?
Whenever I’ve been asked what Bitcoin’s (BTC) killer app would be over the past 10 years, my response has always been “digital identity.”
Today, the world stands at a crossroads. One turn leads to ever-increasing and privacy-invading oversight now that money finally follows information onto the rails of the internet. Down the other is a road that sees personal data returned into the hands of individuals and out of mega AI-crunching databases controlled by a handful of corporations and governments.
It might have been anathema to early Bitcoin purists but reality bites and, throwing the growing debate regarding COVID-19 digital passports into the mix, we’re seeing the clouds of a perfect storm on the horizon that is likely to become the key narrative for the years ahead.
As central banks everywhere dismiss crypto assets as nothing more than chips on the roulette table in favor of their own thoroughly “groundbreaking” CBDCs, the excitement at their realization that they can now do both monetary policy and oversight is palpable.
The crypto markets have, unfortunately, already become a victim of their success, getting regulators all in a tizz to boot. The higher those “market cap” numbers have gotten (reaching $2 trillion earlier this year), the more itchy regulators have become. The Chinese have simply taken the sledgehammer approach and banned everything (apart from their recently launched CBDC, of course) while, in the West, regulators are (at best) taking a nuanced approach or else fighting with each other over whose purview it should come under.
Related: Authorities are looking to close the gap on unhosted wallets
With the majority of crypto economic activity still flowing through the major crypto exchanges and OTC desks, FATF forcing Travel Rule compliance on Virtual Asset Service Providers (VASPs) may well keep the genie in its bottle for now while these on/off ramps remain easily identifiable. But what happens if, or when, a self-sustaining crypto economy emerges where the majority move beyond speculation and, instead, get “in” and stay “in”?
Or if DeFi grows beyond its sizeable, yet niche, playpen?
Fungibility, transparency and ‘tainted’ currency
Having spent the last decade or more forcing anonymous “physical cash” out of the system, requiring the reporting of transactions over a measly few hundred bucks, can you imagine the brouhaha should Satoshi’s original vision of an “anonymous cash system” actually proliferate?
If you want to know the answer to that, just look at what happened when Mark Zuckerberg had the temerity to suggest such a notion through his Diem (formerly Libra) stablecoin project that might have ended up in the hands of three billion users overnight ― and Diem has (what should be a regulator’s dream) a digital identity hard-baked into the protocol by design from the very beginning!
Related: Stablecoins present new dilemmas for regulators as mass adoption looms
Sometimes these guys really can’t see the wood for the trees.
There has already been an endless debate over the recent years regarding Bitcoin’s (or other crypto’s) fungibility given how they may become “tainted” if or when traced to nefarious use. Transparency of blockchains has proven to be a useful tool not otherwise at their disposal to law enforcement agencies, whilst hackers have mostly found it far from easy to convert their swag back into “useful” fiat as exchanges blacklist their visible wallet address trails.
But surely “money” itself can’t be “clean” or “dirty”, “good” or “bad”? Surely it’s just a dumb object (or database, or “block” entry)? Surely it’s only the identity of a transacting party that can be deemed (albeit subjectively) good or bad? Not that this is remotely a novel debate. You can go back to an 18th Century British legal case to find it’s all been argued over (and rectified) a long, long time ago.
Leaving aside Zuck’s true intentions for Diem, thankfully I’ve not been alone in my long-held opinion on the role that decentralized identity (DID) might play in both our crypto and non-crypto futures.
Related: Decentralized identity is the way to fighting data and privacy theft
Self Sovereign Identity and the tech giants
For all the excitement on crypto Twitter from even a whisper of interest in Bitcoin from any well-known tech brand, the fact that boring old Microsoft started exploring digital identity as its chosen use-case for “blockchain” as far back as 2017 has garnered relatively little attention.
Not that others within the crypto industry weren’t equally cognizant that this would become a critical piece of infrastructure. Projects such as Civic (2017) and GlobalID (2016) are already a good few years in development and the topic of Self Sovereign Identity, whereby the individual — not a gargantuan central database — maintains private control of their identity and decides for themselves who to share them with rather than a tech conglomerate, is back high on the agenda.
With data protection becoming such an issue for regulators and a challenge for the majority of firms with an online user base, you’d have thought that these ideas would be embraced by regulators and companies alike.
And maybe, just maybe, regulators will join our side if the crypto industry proves that it can build safer and more robust systems. Those systems need to satisfy regulatory requirements for identifying transacting parties in a peer-to-peer payment — and by doing so, enable more institutional participants to safely enter the crypto markets with their compliance officers able to sleep at night.
It is, after all, the Googles and Facebooks that have most to lose should decentralized digital identity prevail. Without our data to pimp, they’re royally screwed.
Related: The data economy is a dystopian nightmare
Murmurings of dissent are already being heard relating to the responses to the current World Wide Web Consortium (W3C) Call for Review regarding Decentralized Identifiers (DIDs) v1.0.
Will the turkeys willfully vote for Christmas or will they ultimately have to find a way to live with the inevitable in the same way that the major telcos had to in the 90s when they were up in arms at the idea that VOIP-utilising upstarts such as Skype might get away with enabling free telephony for everyone?
My hunch is that the masses, once armed with the right tools, will eventually win out but one thing is for sure: The battle lines have been drawn. So grab the popcorn and sit back. This fight is just beginning and has a good few years to run but, when it’s over, crypto nerds everywhere might finally see the global adoption they dream of.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Paul Gordon is the founder of Coinscrum, one of the world’s first Bitcoin Meetup groups in 2012, with over 250 events organized and over 6,500 members. Paul has been a derivatives trader/broker for over 20 years.
Blockchain identity market to grow $3.58B by 2025, report claims
A new report on the potential for blockchain identity management solutions to become integrated across sectors has forecast strong growth for its global market, at a compound annual rate of close to 71%.
The report grounds its predictions on a study broken down into segments: by sector – e.g., government, healthcare, banking, financial services and insurance (BFSI) – geography, and applications. It was published by the Lyon-headquartered market research solution provider ReportLinker.
Drawing on an analysis of several existing blockchain identity management market vendors – Accenture, Amazon, Bitfury Group, Civic Technologies, and others – the report expects the total global market to grow by $3.58 billion between 2021 and 2025.
Related: The future of DeFi is spread across multiple blockchains
The study’s baseline assumption is that the market for blockchain identity management will continue to expand as the proliferation of online and cloud services and digitalization more broadly continue apace. As Cointelegraph has previously reported, the demand for more efficient, decentralized and privacy-respecting identity solutions has arisen in a vast array of diverse sectors, from public services to logistical and supply chain networks, and all the way down to consumer wearables and other smart devices.
With increasing digitalization, a form of secure identity verification to access basic services – both public and private – online is quickly becoming an inescapable requirement; some have gone so far as to argue that privacy-preserving digital identity needs to be recognized as a basic right for all.
In tandem, with the global user base of social media networks now exceeding the 3.8 billion mark, some advocates have argued that blockchain offers the only adequate, equitable identity solution that can protect these users from threats such as data theft and privacy abuses.
Earlier this month, Ethereum co-founder and lead developer Vitalik Buterin pitched his vision of the future of the Ethereum network across a range of non-financial applications, singling out areas that included both decentralized social media and identity verification and attestation.
SelfKey (KEY) gains 450% after DeFi pivot and data management upgrades
Data has become one of the most valuable resources on the planet and its analysis, collection and monetization have helped companies like Google and Facebook achieve blue-chip status in the eyes of investors. With monetization comes risk and privacy protection is one of the biggest challenges companies and data producers face.
One cryptocurrency project that focuses on helping individuals and companies manage personal data is SelfKey (KEY), a blockchain-based identity platform that seeks to revolutionize the KYC process and embody the ethos of Self-Sovereign Identity.
Data from Cointelegraph Markets and Tradingview shows that the price of KEY has vaulted 470% over the past month, climbing from a low of $0.00495 on Feb. 17 to a high of $0.0283 on March 20 as trading volume surged 450% in 24 hours.
As blockchain technology gains mainstream adoption, the need for ways to secure and transmit identity information becomes increasingly important, and recent developments for the SelfKey project could possibly have it become one of the frontrunners in providing relevant tools for the cryptocurrency community.
SelfKey enters the DeFi arena
Trading activity and community excitement began picking up in early February when the project began discussing the SelfKey Exchange Marketplace, also known as KeyFi, a DeFi platform with a focus on protecting user data.
On Feb. 18, SelfKey announced the successful completion of an airdrop to users who had completed the KeyFi platform credentials verification and the team also revealed an ongoing airdrop taking place between February and June where qualified KEY holders would have the opportunity to receive KEYFI tokens as well as additional KEY.
Following the airdrop revelations, trading and Twitter volumes noticeably increased as DeFi users begun to show more interest in the privacy-focused platform.
After its initial price breakout that peaked on Feb. 21, KEY entered a consolidation period that lasted until March 9 as the whole of the decentralized finance sector saw a pullback in token prices and protocol activity.
Since March 9, the price of KEY has increased by more than 280% as the project engaged community members with discussions related to identity management, the SelfKey Foundation, the SelfKey Identity Wallet, and the SelfKey ID.
The emergence of DeFi over the past year has been a driving force of growth in the cryptocurrency space and shows no signs of slowing in the near future. As companies and mainstream users begin to explore what DeFi has to offer, SelfKey could see further upside if its identity protection products gain traction.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Blockchain can stamp out fake news and rebuild trust in mass media
Fact-checking agencies are in charge of verifying facts and claims in the news that may be distorted in the process of rewriting or for any political purposes. The news text may consist of truthful information written in a neutral format peculiar to the news, but one sentence may contain a false fact or claim whose origin is unknown. In addition, the state itself has begun to produce false information, as was the case with former U.S. President Donald Trump’s famous Twitter account.
The main strength of fake news is the rapid speed with which it disseminates. While false information has always existed, the internet makes it worse every year. The high speed of fake news sharing has the potential to directly affect public relations and have serious political and economic consequences that are sometimes difficult to predict. This is not to mention that it has become difficult to trace the original source and at what iteration true news might have become false.
Why is it so difficult to fight fake news?
Public literacy can help in the fight against false information, as online news is often characterized by unverified facts and a lack of originality. Today, it is very easy to create a misleading message or article: You just need a digital platform for the first publication, then fake news is spread by users themselves, and their number increases exponentially.
Also, the publication of fake news often generates profits for the platform owners through embedded advertising, and they are in no hurry to give up this way of generating revenue. Another problem is the misinterpretation of the source of the news. For example, a city government issues an ordinance about new restrictions because of the COVID-19 pandemic, but the media can interpret this differently for the sake of traffic, clickbait and uniqueness. Any fact-checker will advise you in such a case to “always see the source.” In reality, there is no guarantee that the user will do so because the news flow is enormous and there is no time or habit to check everything.
Technologies against fake news
In addition to manual fact-checking, there are technologies for fighting fake news, like automated source finding, or an anti-plagiarism system. Sometimes fake-news producers manage to obfuscate such systems when the original source is lost.
There are more projects and studies about using various machine learning techniques to identify inaccurate information. These projects are most often based on stylistic analysis of texts and a model that has been trained on fake-news text examples. Nonetheless, there are also limitations here, such as the collection and markup of the database, as it is a very time-consuming process. Also, in many publications that sin with false news, the style of news with false information is not different from that of news with truthful information.
The same applies to bloggers on social media platforms. That said, there are examples of successful projects, such as when Twitter acquired a British artificial intelligence-based startup to help it combat the amount of fake news being spread on its platform.
How can blockchain help?
First of all, because of the very principle of its operation. A distributed ledger system involves not only the secure storage of data and the use of cryptographic encryption but also the impossibility of arbitrary changes. Smart contracts store text, images/videos and their sources on a blockchain. Anything that goes into the registry will have source data, namely who posted a particular news item — whether it be an article, photo or video — and who the source is of a particular quote. This is relevant, for example, for news agencies or government press releases whose information may be distorted when disseminated by other media.
Reliability and permanence of the original news are achieved by technology features such as cryptographic hashing, digital signatures and distributed consensus. In the proposed solution, the blockchain system for media consists of the following elements:
- Enrollment smart contract
- Update identity smart contract
- Revoke identity smart contract
- Evolvable reputation set.
Blockchain also solves another problem where media outlets retroactively change news or publication dates. The source can be traced by recording a timestamp using a “blockchain-based approach for decentralized distributed storage for tracing the origin of the news.” This is especially relevant during election campaigns or for tracing the source of hate speech and libel.
With the help of blockchain platforms, news sites can increase their transparency, and getting to the source of misinformation will become much easier and, more importantly, faster. Not only will this help another end-user verify the information, but it will also provide evidence of the metadata collected at each stage.
Now, before posting fake news, authors will have to consider that there is a way to find those responsible for its creation and dissemination, as distributed registry technology contains all the information about the data from the very first moment it appears.
What else will media collaboration with blockchain provide?
The main problem at the state level that legislators face today is the balance between human freedoms and preserving the public interest. Even in countries where the constitution prohibits passing a law restricting the freedom of speech, there are now attempts to regulate fake news, which is perceived ambiguously. At the same time, one cannot ignore the damage that disinformation does to journalism, undermining public trust in news reporting and news services and platforms in general.
If we imagine a news portal based on blockchain technology, it automatically means that it can take full advantage of it. And it is not just about a new level of transparency and security through a distributed registry but also about new ways of monetization. The ongoing struggle in many countries between big players such as Facebook and Google and governments that want to protect the rights of authors of text, video and other content is a clear indication that monetization is becoming an increasingly important issue.
How can the author of a news article, for example, get paid fairly when such giants as Facebook and Google freely post it on their resources while paying no compensation to the author? Putting the news on a blockchain portal, on the other hand, would allow a payment system to be set up for anyone who wants to read the articles, and payment could be made either through non-cash payments from bank cards or from the platform’s own tokens.
In the end, the combination of blockchain technology and the digital economy could be the basis for an independent, free press platform with journalists and users on an equal footing, without intermediaries.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Arsenii Tretiakov is the head of public relations at the Distributed Ledger Technologies Center of St. Petersburg State University. He is researching computer-based methods to detect fake news as a Ph.D. student in media studies at the University Carlos III of Madrid.