Blockchain’s killer app

Well the first killer app was supposed to be currency; it turned out to be mining. And the second was supposed to be decentralized apps but it turned out to be ICOs. I think the third is more straight-forward. Identity.

I read, write and critique blockchain white papers. The Sovrin white paper is best practice.

But it uses some jargon I’m going to avoid.

When you give someone an identity document today you’re trusting them to keep your details safe and not to re-use those details elsewhere. But you know that’s not working, right? Companies get hacked and identity details get into the wrong hands. In 2016, 1.1 billion people’s identity details were compromised. Yes, you read that right. We now have an $86 billion cyber security industry. IBM’s President describes cybercrime as “the greatest threat to every profession, every industry, every company in the world.”

The problem is, your identity details (e.g. your credit card) can be re-used by criminals to impersonate your identity until you get wind of it. And they are expert in skimming a lot of money very quickly. The reusability of your credit card number makes it an attractive target for theft.

Sovrin is a new blockchain designed especially for identity checks. It’s one of three excellent blockchain projects addressing identity; uPort and Civic are the others.

Here’s how they all work. If you want to buy something from Shop A, your give Shop A authority to use your credit card/bank details, but they don’t get and keep your credit card number. Just the authorisation. If your account details get hacked you just give them a new authorisation.

Say you want to get into a nightclub. You won’t give them your driver’s licence; you’ll just give them a proof that you’re older than 18. They won’t get your name, address and date of birth unless you specifically authorise it. This shift from reusable IDs to specific purpose IDs is going to destroy, almost overnight, the black market for identity data.

Banks will also love the simplification of KYC (Know Your Customer) practices. Again, efficiencies worth tens of billions of dollars.

Companies will be able to easily verify the university qualifications claimed by job applicants. Currently, the number of fake pHDs issued exceeds the number legitimately awarded.

But not just degrees. These projects will allow anyone to verify identity claims. I have these people as friends, I have this reputation with that social network, I have this credit history, this insurance history, these club memberships – all these only with the approval of the identity owner.

A critical application of the technology is the ability for phone companies to let you use your phone’s GPS data to verify your location at a particular time or over a period of time. Sovrin proposes to host a market for all that data. Trillions of queries costing trillions of fractions of digital coins.

It’s an idea so logical it must not be allowed to fail. One of these three projects will become the identity layer for the Internet.