Undefined

THEKEY at NEO DEVCON!!

THEKEY was present at the NEO Devcon on Jan 31th 2018 in San Francisco and Ken Huang, the Blockchain and Identity Verification President of THEKEY, was on hand to give a speech at the conference. Please check out the contents of the speech below:

Why do we need Blockchain to fix the current problems facing Identity?

Currently, the Identity Systems used by both consumers and businesses have 5 main issues.

First, identity is fragmented for the consumer, but centralized for the hacker. We have identities in different places, and each place holds a fragment of our identity. We have an identity on Facebook, at Google, at Taobao, at Wechat, at Equifax etc. These centralized identity stores hold some piece of our data. These data are centralized from the hacker’s perspectives and give more incentives for the hackers to break into one centralized data stores and steal a ton of identities. We need to flip this equation. We need to make identity centralized from the point of view of the end user, in such a way that the user’s main data is stored centralized in a Trusted Execution Environment in the user’s phone. In this way, identity is fragmented for the hacker, and the hacker does not have a centralized database from which to steal the data from.

Second, the user has no control of the data stored on the centralized databases. Companies like Facebook, Google and other service providers can profit from your data by selling your data or by using it to perform precise targeted marketing. As the user, you don’t profit from your own data. To combat this, there is a movement in this area, called the “self-sovereign identity”, and it is heavily advocated by start-up companies such as uPort, Civic, Evernym, ShoCard etc. This is a great movement and one of our key design principles as we built our 2nd generation of IDV system.

Third, everyone hates using passwords. One may either have too many passwords that are hard to use and easy to forget, or have one password for everything which could be disastrous. This is because if someone steals your singular password, they can use it to access your other private websites, email, accounts etc. On the other hand, Blockchain is based on public/private key pairs. If you keep your private key secure and if the system has good key management tools and processes, it can be combined with biometrics and other onetime passcodes, to potentially get rid of the much hated passwords.

Fourth, Identity Proofing or Verification brings a very high cost for all businesses. Most businesses, including banking and insurance, are required by law to meet KYC requirements (Know Your Customers). The average cost of such a service is around $100 per customer. This is repeated in each bank or insurance company that you do business with. This is also a burden for you and a high social cost overall due the excessive paper work, redundant efforts in background searches, and other KYC works required by law for certain businesses. THEKEY aims to solve this problem, and we will give details on how intend to solve this problem later.

Fifth, the current identity system is rigid, and the attributes of the user, once defined, are very hard to change. For instance, in the business enterprise world, a user identity is usually stored in Microsoft Active Directory. If you need to add an attribute, you will need to extend the Microsoft Active Directory schema. If you have worked in any identity related project, you will know that it is very hard to ask the Microsoft Active Directory administrator to extend or change the schema for supporting IT systems. You will need to go through a change management process, and do a lot of testing before any changes can be made. Why not make this more flexible via the use of smart contracts? We will need to make the attributes more dynamic and real time, and THEKEY project will try to do some work on this area.

THEKEY will build an ecosystem composed of individual users, service providers as well as smart contracts. As you may all know, a blockchain project may or may not need a token. For example, if you use HyperLedger Fabric to develop a blockchain system, most likely, you will not have a token.

So, why do we need a token?

First, let’s start from the general idea of token economy. I believe that a token in a blockchain regardless of what the blockchain system’s application is, can serve 3 purposes. The token is the blood of the whole ecosystem. If you think of your blockchain app is an organic ecosystem, it will need a Circulatory System. The blood is essential for this Circulatory System. Tokens enable transactions to happen and make the system circulate. Tokens are also the glue since it can glue the participants of the ecosystem to work together by using token as incentives. Tokens are also “smoother”, which reduces friction within the system. If you use fiat in your system, you will have to deal with banks, and this could potentially introduce friction since it takes time and money to have fiat circulate in a blockchain system. Thus, unless there is a national digital currency which can be seamlessly integrated into your blockchain system, your system will need tokens for smooth transactions. This somehow partially explains why so many Hyperledger Fabric based blockchain projects never move beyond the POC (Proof of Concept) stage so far.

Now we can talk about how the TKY token works inside THEKEY project. I just listed 3 main participants from THEKEY system (I did not list Developers as part of ecosystem since it is obvious for each blockchain project, that the developer contributes codes and needs to be paid in the tokens of the system). The consumer can use the token to pay for services such as fraud detection or get paid for providing the data needed in IDV situations. The service provider can use the token to pay for data if and only if the user consents to provide the data and allow the Identity Provider to give the data. The identity provider can get paid for the identity verification service.

Now, we can talk about how THEKEY project can solve the problem.

We leveraged some wonderful work by uPort, Civic, evernym and other self sovereign identity start-ups. In addition, we have the following advantages.

Authoritative Data

Dynamic

Multiple Dimensional

Blockchain Enabled

Real World Use Cases

Privacy Preserving

THEKEY is based and built on many years of research. The First Generation of products are used widely within China now, and we are currently building the 2nd generation product by utilizing blockchain technology.

Ken also participated in a livestream interview with Neonewstoday on Jan 31st 2018.