Cryptocurrencies by Oonagh McDonald;

Author:Oonagh McDonald;
Language: eng
Format: epub
Publisher: Ingram Publisher Services UK
Published: 2021-06-15T00:00:00+00:00

A DIGITAL IDENTITY

The original Libra White Paper states that “an additional goal of the Association is to develop and promote an open identity standard. We believe that decentralized and portable digital identity is a prerequisite to financial inclusion and competition”.9 This would be a dramatic step forward, given the ease with which one can assume any identity on the internet, or as a New Yorker cartoon put it , “on the internet no one knows you are a dog”. However, it is thought that having a digital identity would revolutionize many transactions on the internet, such as internet shopping and payments, since one would no longer have to reveal detailed information about oneself, such as date of birth, bank account details, etc every time. But the White Paper has not offered an explanation or further work as to how this could be achieved. Before the publication of the first White Paper, Mark Zuckerberg said he was investigating the blockchain’s potential to allow internet users to log into various services via one set of credentials without relying on third parties.10

Work has already been done by others on a set of open standards for verifiable credentials.11 The first step is the requirement for an independent institution to establish the identity in the first place, the second to provide a private key (to be used in all internet transactions and recorded on the blockchain). The problem is that, since people lose keys or forget them entirely, custodians are required, possibly for different aspects of the key, such as biometric identity. New technology that ultimately relies on individuals to keep digital identities safe is not enough. Almost one third of Bitcoins have been lost, thanks to lost passwords and hard wallets residing in landfill sites. The interesting questions in relation to Facebook are who would provide the externally verified digital identity? And who would be its custodian? Even more interesting is whether Facebook is really interested in establishing a digital identity. Libra’s blockchain will be pseudonymous, that is, like many crypto networks, it will allow users to hold one or more addresses not linked to their real-life identities.

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