When thinking of an online identity, one usually thinks of an avatar, a username, a profile picture; something abstracted from a person’s real-life identity. There can be realistic identifiers, such as Amazon accounts with addresses, Paypal accounts with bank information, or fictional identifiers, such as avatars or personas. However, the infrastructure to tie one’s fictional identifiers to their real-world identifiers has been post-facto, built to accommodate the growing online market. This has led to a “worst of both worlds” effect for the world of online content creation and entrepreneurship - one look at any popular viral content of the day will show that the ones who benefit most are always some layers removed from its origin. Online marketplaces like Amazon are flooded with algorithmically generated brands selling cheap knockoff products and it has been estimated that this comprises two-thirds of its entire third party marketplace. And despite the emergence of real-world identifiers on the internet, such as Know Your Customer (KYC) regulations and captchas, there have never been more bots and fake accounts bloating the space. This series of articles will examine how online identity could be altered and improved in a Bitcoin system.
In a Bitcoin system, identity is fundamental to interaction with the blockchain. There are several key components of this inherent to the way Bitcoin transactions are handled. According to the Bitcoin whitepaper, a transaction is composed of a:
“chain of digital signatures. Each owner transfers the coin to the next by digitally signing a hash of the previous transaction and the public key of the next owner and adding these to the end of the coin. A payee can verify the signatures to verify the chain of ownership. ”
This creates a unique set of identifiers, called addresses, that can be verified between both parties via a process of signing. The Electronic Communications Act (2000) and Electronic Signatures Regulations (2002) of New Zealand define electronic signatures as “uniquely linked to the signatory, capable of identifying the signatory, created using means that signatory maintains complete control of, and linked to data such that any subsequent change to said data is detectable.” In that model outlined in the early 2000s (which has not been refined much since), the expectation was that a Certifying Authority (CA) and Certification Providing Service (CPS) would be responsible for verifying and authorizing signatures in order to maintain integrity. But today, Bitcoin resolves this issue with every single transaction it makes, and actually increases its security by doing so.
So what does an identity on Bitcoin look like?
To understand this, as it is mostly speculative, one must understand what the previous definition of electronic signatures lacked. While electronic signatures can be names, email accounts, or scanned physical signatures, a digital signature is a “numerical representation of the entirety of a signed document” and all that comes with it. Thus, a digital signature can be both more unique and wider in scope than an electronic one. As Bitcoin is a system of uniquely identifiable and auditable digital signatures, this is a more secure method of representing an identity online than any Amazon or other such account. One may only need a simple real-world identifier, such as a social security address or bank account or even an email account, tied to an Extended Public Key (XPUB) to generate a nearly infinite amount of auditable but secure transactions, involving anything from finances to social media and entertainment. On the coming Metanet, this level of control and security will be paramount to uniting the world under one digital currency.
Understanding the benefits of this new, sleek identity requires examining the ways in which the law has had to catch up with the internet so far. The recent “Earn-It Act,” still on the docket of the US Congress, represents an attempt to regulate the rampant distribution of child sexual material by making the platforms which they are trafficked on accountable. This bill seeks to create an Attorney General-led committee to establish rules by which such platforms would need to comply in order to maintain protections afforded by S.230 of the CDA, a provision that removes accountability for platforms whose users are caught distributing inappropriate material. While defensible in its intentions, the idea of a government-led committee placing rules and regulations on companies is a worrisome one, and rightfully has led to open letters from the ACLU and others regarding censorship. This issue is one that cannot be resolved satisfactorily on the current architecture of the internet.
Elsewhere, there is chaos and confusion aplenty due to bots, sock puppet accounts, spam and misinformation, and often it is these incognito accounts that are behind the distribution of illegal material. With an identity tied to one’s interactions on the immutable blockchain, perhaps accountability can be moved from corporations to the individuals engaging in criminal behavior.
The decentralized Bitcoin network allows for fast, secure transactions that can potentially be tied to real-world identifiers, allowing for layers and layers of further abstraction to be built on top of the blockchain. Thankfully, developers and engineers from all around the world are rapidly building the infrastructure to do so. Companies like Xoken are at work creating elegant solutions to the core architecture of the system. Their solution is an on-chain namespace protocol called Allegory. Allegory can be used to build identity systems without the common DNS-oriented attack vectors endemic to today’s internet. Twetch is another fascinating example: a social company whose mission is to return control of data to their users. More recently, prolific entrepreneur Unwriter launched powping, a social media site that uses BSV wallet Money Button to sign all activities bringing a vision of a portable identity across applications into focus. The inherent high cost of generating multiple signals on the Bitcoin network means spam and sock puppeting is soon likely to be a thing of the past. The next article in this series will examine the implications of a synchronized online identity on Bitcoin as well as delve deeper into the flaws of the current system.