Nowadays, most individuals operate in a digital environment where transactions and communication are made online. As a result, digital identity verification has become a very important aspect of online security and compliance.

KYC (Know Your Customer) is one of the most widely used methods for verifying the identities of users and clients. While KYC has been effective in assuring security and regulatory compliance, it has some significant drawbacks. KYC can be time-consuming, expensive, and difficult for users, potentially resulting in losing customers and missing business opportunities.

ESelfKey addresses this issue by proposing a potential solution to these issues with ESelfKey iD. 

ESelfKey iD is a revolutionary approach to identity verification that could be faster, more secure, and less costly than traditional KYC methods. It uses the power of blockchain technology and smart contracts to potentially offer a secure, decentralized, and efficient identity verification process. This can possibly eliminate many of the issues associated with traditional KYC methods.

With ESelfKey iD, users can create a self sovereign identity that they can control, giving them more privacy and full ownership over their personal data.

In this article, we will elaborate on the drawbacks of traditional KYC methods. We will also examine the advantages of ESelfKey iD, its features and benefits compared to traditional KYC. Additionally, we will explore the potential impact of ESelfKey iD on the future of digital identity verification.

Highlights 

• KYC: Potential Issues to Consider
• The Benefits of ESelfKey iD
• High-Level Flow
• Quick Relying Party Onboarding
• The Issuance: ESelfKey iD NFT User Flow
• The Verification: ESelfKey iD User Onboarding
• Reusable KYC and ESelfKey iD
• ESelfKey iD New Project Setup
• Conclusions

KYC: Potential Issues to Consider

Even though KYC has become a commonly used procedure in many industries, it has its drawbacks.

Here as some examples:

• The collection of personally identifiable information (PII) for KYC purposes comes with legal responsibilities and storage costs, which can take a toll on companies. 
• Users have a tendency to dislike KYC checks, finding them intrusive and time-consuming. This can lead to lower conversion rates and a negative first impression for potential customers. 
• Implementing KYC can be a difficult and expensive process, further adding to its disadvantages. 

Perhaps the time to explore alternative ways of verifying customer identities has come. With ESelfKey iD, you can explore methods that are less tedious for all parties involved.

The Benefits of ESelfKey iD

As stated above, KYC processes can be inconvenient for both companies and customers alike. However, ESelfKey’s Ai-Powered Proof of Individuality method along with ESelfKey iD can potentially become a better alternative to KYC.

Here are some of ESelfKey.iD’s benefits: 

• The overall process is easier and less costly, making it more accessible for users. 
• The onboarding process is quick.
• Ongoing monitoring makes sure that customer data remains accurate.
• Existing KYC checks are reused, thus the need to collect and store PII repeatedly is no longer an issue.
• Costs for companies are reduced, but also improves customer privacy and security.
• It provides powerful compliance tools, ensuring that companies remain in compliance with regulations and laws. 

By using ESelfKey iD, companies can streamline their KYC processes, reducing costs, enhancing customer privacy, and improving compliance. Ultimately, this results in a better experience for customers and a more efficient and secure system for companies.

Below, we will discuss some of ESelfKey iDs benefits more in depth.

High-Level Flow

ESelfKey iD enables zero-knowledge interactions between individuals, making sure that users' data is kept private and secure. With ESelfKey iD, the user's data does not reach your server. This adds to user privacy and prevents potential data breaches.

Furthermore, the onboarding process is quick and simple. 

When a user with a ESelfKey iD visits your server, they are checked to determine if they match your filter. If they do, they can be onboarded instantly, simplifying the process and reducing the time and resources required.

By using ESelfKey iD, companies can provide a secure and efficient onboarding process that prioritizes user privacy and security. The zero-knowledge interactions and instant onboarding features make it a better alternative to traditional KYC processes.

Quick Relying Party Onboarding

To streamline the onboarding process, the following steps are required:

1. Sign up at ESelfKey iD to create your user filters.
2. Add these filters to your smart contracts.
3. When a user attempts to run your smart contract function, the system will check if they have a ESelfKey iD NFT. If they do not have one, they will be prompted to get one.
4. If the issuer has a ESelfKey iD NFT, they will then be able to verify whether the user matches the filter that you have set for the transaction. If they do, the user will be granted access to your server. If not, the user will be denied access.

Following these steps, companies can implement a more efficient and secure onboarding process that prioritizes user privacy and security. 

ESelfKey iD's NFT-based system ensures that only authorized users are given access to the company's services. This reduces the risk of relying parties allowing access to unauthorized individuals to their services.

The Issuance: ESelfKey iD NFT User Flow

The issuance process for ESelfKey iD is outlined below:

1. The user visits your project and is redirected to ESelfKey iD, in case they do not already have one.
2. The user pays for the verification check.
3. The user goes through the verification process, and the issuer stores their data. Ongoing monitoring of the account begins.
4. If the user passes the checks, the issuer releases a credential that verifies the user's humanity, uniqueness in the database, and verified data.
5. The user then mints their own ESelfKey iD NFT.

By following these steps, users can obtain a ESelfKey iD NFT that verifies their identity and potentially provides access to various projects that use the ESelfKey iD platform. 

The verification process may grant access only to authorized users, providing enhanced security and privacy for both users and companies.

Enhanced security offers several benefits such as:

• Anti-bot security. This measure prevents automated attacks by detecting and blocking suspicious or malicious bot traffic.
• Fraud protection. Malicious individuals often use bots for fraudulent activities like creating fake accounts or generating false clicks to generate revenue. Implementing anti-bot security measures helps to identify and prevent such fraudulent activities, keeping the business and customers safe.
• Improved user experience. Bots can significantly hinder the user experience by slowing down websites or making it difficult for users to access information. Anti-bot security measures ensure that legitimate users can access the website or service without interruptions or delays.

The Verification: ESelfKey iD User Onboarding

The onboarding process for ESelfKey.iD is as follows:

1. A user with a ESelfKey iD visits your project.
2. You request that the ESelfKey iD issuer checks the user's information.
3. The issuer verifies whether the user's data matches your filters.
4. The issuer sends a signed message confirming the user's status. 
5. If the user is verified, they can be onboarded, and the signed message can be used to authorize transactions.
6. The relying party (issuer) is billed for the verification check.

Through this process, companies can implement a more efficient and secure onboarding method that prioritizes user privacy and security. 

ESelfKey iD's NFT-based system may allow access to the company's services only to authorized users. The use of a signed message adds an extra layer of security, offering further assurance that the user's data has been verified by the relying party.

Reusable KYC and ESelfKey iD

The benefits of using reusable KYC with ESelfKey iD are as follows:

• Your project subscribes to ESelfKey iD.
• Your project can be featured on the ESelfKey iD website.
• A user with a ESelfKey iD NFT visits the ESelfKey iD website.
• The user scrolls through the list of projects that support ESelfKey iD.
• The user can potentially choose your project from the list.
• The user quickly onboards to your project using their existing ESelfKey iD NFT.
• Your project profits from the seamless onboarding experience.

ESelfKey iD's reusable KYC system could provide companies with a more streamlined onboarding experience for users. Users can easily access multiple projects without having to go through the time-consuming and costly process of verifying their identity each time.

Additionally, companies benefit from increased user adoption and loyalty, as the reusable KYC system encourages users to choose projects that support ESelfKey iD. Overall, this system offers a win-win situation for both companies and users alike.

ESelfKey iD New Project Setup

Setting up a new project with ESelfKey iD is quite easy. Below, we will detail a few steps which you need to consider.

The project onboarding process is as follows: 

1. Go to the ESelfKey iD website.
2. Register for a new account.
3. Add your company privacy policy to your account.
4. Choose a subscription pack that suits your needs.
5. Set up filters to verify your users' identity.
6. Your project is now ready to implement the filters into your system.

ESelfKey iD's easy-to-use platform could offer companies a quick and efficient way to set up their project's identity verification process. The platform provides a range of subscription plans to choose from, depending on your business's specific requirements. 

With the ability to customize filters for your users, you can ensure that only authorized individuals can access your platform, enhancing security and trust. 

Overall, ESelfKey iD's new project setup process offers a simple and effective solution for individuals looking to integrate identity verification into their systems

The Library Implementation

To implement ESelfKey iD into your project's system, follow these simple steps:

1. Implement the backend library onto your server.
2. Prepare the front-end to handle calls for authorization.
3. Implement the ESelfKey iD smart contract into your own smart contract.
4. Your project is now ready to onboard users.

By following these steps, you can integrate ESelfKey iD into your project's system and take advantage of its powerful identity verification capabilities. With the backend library in place, your server will be able to communicate with ESelfKey iD to authorize user access. 

By integrating the smart contract into your own contract, you can ensure that only authorized individuals can access your platform, boosting security and trust. 

All in all, ESelfKey iD's library implementation process offers a robust solution for businesses looking to enhance their identity verification capabilities.

How the Profile Builder Functions:

ESelfKey iD's Profile Builder is a tool that allows you to create customizable filters for your project. You may use these filters to sort and manage users based on specific criteria.

The Profile Builder allows you to create multiple filters, which you can implement separately on your project. This means that you can have different filters applied to different sections of your app or website, depending on your specific needs.

For example:

• You could create a filter that accepts citizens of Country A for one section of your app, but another filter for the same project that excludes citizens of Country A from another section. 
• This level of detailed filtering allows you to match regulatory requirements while also boosting the benefits of your app.

To set up the Profile Builder, you would first define the standards you want to filter by, such as citizenship, age, or profession. You can then apply rules and conditions to each filter to create a customized sorting system.

For the most part, the Profile Builder in ESelfKey iD could provide a flexible and powerful tool for managing user data and creating a tailored experience for your app's users.

Conclusions

ESelfKey aims to provide a comprehensive solution that addresses the needs of both businesses and users. 

The benefits of ESelfKey iD could include efficient, secure, and cost-effective KYC checks, streamlined onboarding, and better conversion rates. Additionally, ESelfKey iD's approach to privacy ensures legal compliance and reduces costs associated with PII storage. 

Even more, with a user-friendly one-time KYC process and access to multiple projects on the website, ESelfKey iD offers convenience and ease of use for users. ESelfKey iD's project features and powerful user filtering tools could enable businesses to match rules and increase profitability. 

Stay up to date with ESelfKey on Discord, Telegram, and Subscribe to the official ESelfKey Newsletter to receive new information!

Note:

We believe the information is correct as of the date stated, but we cannot guarantee its accuracy or completeness. We reserve the right not to update or modify it in the future. Please verify all information independently.

This communication is for informational purposes only. It is not legal or investment advice or service. We do not intend to offer, solicit, or recommend investment advisory services or buy, sell, or hold digital assets. Additionally, we do not solicit or offer to buy or sell any financial instrument. 

We use the "KYC" term here for general information purposes, without reference to particular legislation. Please check the laws relevant to you and contact us for the details.

This document may contain statements regarding future events based on current expectations. However, some risks and uncertainties could cause results to differ. The views expressed here were based on the information that may change if new information becomes available.

The rise of technology has made a great impact all around the world. It changed the way we communicate, work, and study. With the help of artificial intelligence (AI), most of our daily tasks are made considerably easier, and access to information has never been more effortless. However, in order to benefit from all the wonders of AI, we have to become part of its world.

Most of our private information had to evolve from physical papers to digital identities, which are stored in centralized systems. But while traditional, centralized systems are convenient, they may put our private data in danger due to their weak security measures.

Thankfully, solutions are being developed to change the way we authenticate ourselves online and the way we perform individuality-based activities on Web3. Technology can help protect our private information, just as much as it can be used to compromise it. The key is to remember that we can use AI for our benefit.

In this article, we will thoroughly elaborate on DAOs, ESelfKey DAO (including specific terms like KEY, SELF, and NFTs), and how user engagement in the DAO will be beneficial for individuals in the long run.

Highlights

• Humans and Digital Identity
• DAOs vs centralized systems
• DAOs and individuals
• ESelfKey DAO
• How to participate in the ESelfKey DAO
• Conclusions

Humans and Digital Identity

How we operate in the online world

Nowadays, we operate in the online world in many ways. We use various tools and platforms to connect, communicate, and collaborate with one another across the globe. For instance social media, messaging apps, online forums, and video conferencing. The web has opened up endless opportunities for people to share information, ideas, and experiences. 

However, as with any aspect of human behavior, there are also challenges and risks associated with operating in the online world. One of the biggest concerns is the safety of our personal data. 

The risks we take when performing individuality-based activities online

When we engage in individuality-based activities online that involve sharing personal information, we expose ourselves to a variety of potential risks. 

For example, personal information shared online can be accessed either by AI or human identity thieves, putting our privacy and security at risk. Even seemingly small details such as our names, birthdates, or email addresses can become targets which bad players may use to compromise our security. This can lead to AI attempting to create fake identities using our leaked personal data. 

What can we do to avoid those risks?

Being cautious about what we share online and keeping our privacy safe is very important. However, it is equally important to make sure that the individuals we engage with are not fake, AI-generated entities. 

Implementing Know Your Customer (KYC) protocols within a DAO may be the most secure means of verifying that individuals are genuine, real persons. Not only that, but within a DAO, there is no single entity to govern and control our personal data. What a DAO strives to achieve is equality and fairness among its users, as well as maintain the security of their individuality.

DAOs vs centralized systems

A brief description of DAO 

A DAO, or Decentralized Autonomous Organization, is a type of organization that usually operates using blockchain technology. This facilitates decentralized decision-making and transparent governance without the need for a centralized authority. 

DAOs are typically run by a group of individuals who hold tokens or cryptocurrency. Individuals can also vote on decisions related to the organization's operations, like funding proposals or changes to the organization's rules. 

How DAOs are revolutionizing individuality-based operations

DAOs  are changing the way individuals operate by innovating the concept of decision-making. 

In traditional organizations, individuals cannot materialize their ideas or concerns, due to the centralized systems based on hierarchies. DAOs, on the other hand, allow members to participate in decision-making processes and contribute to the organization's goals through decentralized governance mechanisms.

By using blockchain technology, DAOs enable trustless collaboration and eliminate the need for intermediaries. This method makes it easier for members to join and participate in collective decision-making. Additionally, it creates a more inclusive and democratic environment where each member can have an equal say and contribute to the organization's success.

Therefore, DAOs are empowering individuals to come together, build communities, and work towards common goals, without sacrificing their individuality or autonomy. 

DAOs and individuals

DAOs suffer from lack of user participation

Despite their potential benefits, DAOs can suffer from a lack of user participation. Because DAOs rely on decentralized decision-making, they require active participation from members to make decisions in a timely and effective manner.

How will user participation help DAOs “stay alive”

User participation is critical to the success and sustainability of DAOs. Without active participation from members, DAOs may struggle to make decisions, coordinate actions, and achieve their goals. Moreover, low participation can lead to apathy or disengagement. In turn, this can weaken the community and reduce the value of the DAO.

On the other hand, active user participation can help DAOs stay alive by:

• Promoting engagement.
• Building a strong community.
• Ensuring a timely and effective manner decision-making process.

Ultimately, user participation is essential for DAOs to remain viable and achieve their goals over the long term.

The benefits of participating in DAOs

Participating in DAOs offers numerous advantages for individuals looking to collaborate and contribute to a community-driven effort. Aside from providing opportunities for innovation and community building, it has several more benefits, such as: 

• Democratic decision-making
• Increased security
• Unique contributions
• Transparency

ESelfKey DAO

After explaining the general concept of DAOs, let's examine the SelfKey DAO objectives. 

Individuality is a vital aspect that the ESelfKey DAO is focused on. In the ESelfKey Protocol, individuals value every member’s uniqueness in order to help protect their digital identity from theft and forgery. The aim is to create a safe environment with the help of AI-Powered Proof of Individuality, where valued members can operate using trustless and secure methods.

ESelfKey DAO strive to provide secure digital identity solutions. With strong credentials in cryptography and blockchain technology, ESelfKey DAO’s goals include protecting users' privacy and giving them control over their data. Credentials are lacking in the crypto industry, and they’re a need in order to keep users’ information safe from being doxxed.

Basically, ESelfKey’s goal is to develop a method for individuals to engage with one another in a decentralized, trustless environment, while their private data and individuality remain safe and secure.

Important Terminology in ESelfKey DAO

What is KEY?

The KEY utility token is the centerpiece of the ESelfKey Protocol. 

It has several uses, such as:

• Being a means of payment for services within the ESelfKey Protocol.
• Individuals may use it to lock credentials on.
• Being utilized to govern and empower members of the ESelfKey DAO.
• Providing the necessary tools for users to take control of their digital identity.

As more individuals join the ESelfKey Protocol, the potential uses of KEY will only continue to expand, further cementing its importance as a vital component of the decentralized digital identity revolution.

What is SELF?

While KEY remains the vital utility token to lock on credentials, ESelfKey has proposed SELF tokens in order to help an individual keep track of what they have locked and for what period of time. 

Here are some of SELF’s attributes:

• Individuals who properly lock on a real identity may mint SELF tokens.
• Users themselves may issue SELF tokens.
• They do not have any intrinsic value.
• SELF tokens may also have utility as a governance mechanism. 
• SELF tokens can be unlocked through DAO voting.

SelfKey’s NFTs

At SelfKey, active members have the opportunity to earn NFTs by participating in the community and contributing to the project.

One of the unique features of ESelfKey's NFTs is that they are highly customizable. This means that individuals can tailor their NFTs to their specific needs and preferences. 

ESelfKey places a great emphasis on individuality, recognizing that each person has their own unique identity and set of circumstances. It is a platform that truly values individuality and helping people take control of their own identity and data. This is reflected in the customizability of its tokens and the overall design of the platform. 

How to participate in the ESelfKey DAO

Participating in the ESelfKey DAO and claiming tokens offers many benefits, such as:

• The ability to have a say in the project's direction.
• Voting rights on proposals.
• Access to exclusive community events.
• The opportunity to claim SELF tokens through active participation in the DAO.

The ESelfKey DAO provides a platform for community members to be more engaged and invested in the success of the ESelfKey Protocol.

Here is how to do it:

1. First, a user must perform a KYC check in order to properly authenticate themselves as a real person and the person whom they claim to be. Afterwards, they will join the DAO.
2. The user will then be able to lock KEY tokens on their KYC credentials. Afterwards, they will be able to start accumulating SELF tokens.
3. SELF tokens can be used to purchase NFT packs with particular customizations.
4. Alternatively, the user can mint their SELF tokens and use them for whatever purpose they find useful and fit.
5. Finally, users can contribute to the ESelfKey DAO by performing tasks issued by the ecosystem.

All in all, active participation and engagement in the ESelfKey DAO can bring significant benefits to the ESelfKey Protocol and its members. Members can actively participate in the decision-making process to shape the direction of the project, ensuring alignment with their interests and needs.

Additionally, engagement can help build a stronger sense of community among ESelfKey users, fostering a supportive environment for learning and growth. 

Ultimately, a thriving ESelfKey DAO requires active participation from its members, and those who are willing to engage will reap the benefits of a more robust and inclusive ecosystem.

Conclusions: 

Unfortunately, most people still rely on centralized systems. However, with the development of decentralized solutions, individuals may be able to take charge of managing and storing their personal data.

The ESelfKey DAO aims to assist individuals in gaining full control of their private data, enabling them to safely engage in Web3 transactions based on their individuality. Despite being a small ecosystem at present, it is secure and has the potential to reach new heights with the help of user participation and engagement. 

As the ESelfKey DAO develops, users will derive more benefits from it. Ultimately, it is user contribution that will enable ESelfKey to achieve its long-term goals.

Keep in touch to learn more about SelfKey and how you can participate in building a better digital future!

Stay up to date with ESelfKey on Discord, Telegram, and Subscribe to the official ESelfKey Newsletter to receive new information!

Note:

To the best of our knowledge, the information contained herein is accurate as of the date stated; however, the accuracy and completeness of the information are not guaranteed, and we disclaim any duty to update the information should circumstances change. You should not rely upon the information without conducting your own validation.

This communication is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation for any digital asset, nor does it constitute an offer to provide investment advisory or other services. No reference to any specific digital asset constitutes a recommendation to buy, sell or hold such digital asset. Nothing here shall be considered a solicitation or offer to buy or sell any security, future, option or other financial instrument or to offer or provide any investment advice or service.

Note 2:

SELF and KEY tokens, SBTs, and NFTs associated with the ESelfKey ecosystem have no monetary value or utility outside of the ESelfKey ecosystem, are not ascribed any price or conversion ratio by ESelfKey and its affiliates, and do not represent ownership interests or confer any rights to profits or revenues.

These tokens should not be purchased for speculative reasons or considered investments. By engaging with ESelfKey, you acknowledge and agree to the applicable terms and any associated risks. We recommend consulting with legal and financial professionals before participating in the ESelfKey ecosystem and related transactions.

This document may contain statements regarding future events based on current expectations. However, some risks and uncertainties could cause results to differ. The views expressed here were based on the information that may change if new information becomes available.

We use the "KYC" term here for general information purposes, without reference to particular legislation. Please check the laws relevant to you and contact us for the details.

However, a common question that arises is the difference between a public and a private blockchain. In this article, we will explore the differences, including the advantages and disadvantages of both, and their use cases.

Blockchain as a concept

Before we dive into the private and public blockchain, it’s important to understand what blockchain actually is. Blockchain is the underlying technology which powers cryptocurrency. Because blockchain is decentralized, it manages to be both transparent and secure.

So how does blockchain actually work? Transactions on a blockchain are processed by a network. Computers work together to confirm a transaction, and every computer in the network must ultimately confirm every transaction in the chain. 

Transactions are processed in blocks (forming the “block” in “blockchain”), and each block is linked to the previous block. This structure makes it impossible to go back and alter a transaction. Additionally, a blockchain is transparent because each computer in the network has a record of every single transaction that has occurred. 

Both private and public blockchains share a number of features:

• Records can be added, but cannot be changed or deleted, making them immutable.
• Both are decentralized, using a peer-to-peer network of computers.
• Verifying the validity of a record is done by the majority agreeing that it is a valid record, giving it its own immutability on some level. This prevents any potential tampering of the records.

Decentralization is at the heart of blockchain technology. No one controls the data, so no one can override a transaction and the system is unlikely to fail. This is how blockchain builds trust – data cannot be modified, is independently verifiable, and is virtually impossible to hack.

The difference between private and public

The primary difference between public and private blockchain is the level of access participants are granted. In order to pursue decentralization to the fullest extent, public blockchains are completely open. Anyone can participate by adding or verifying data. The most common examples of public blockchain are Bitcoin (BTC) and Ethereum (ETH). Both of these cryptocurrencies are created with open source computing codes, which can be viewed and used by anyone. Public blockchain is about accessibility, and this is evident in how it is used. 

Conversely, private blockchain (also known as permissioned blockchain) only allows certain entities to participate in a closed network. Participants are granted specific rights and restrictions in the network, so someone could have full access or limited access at the discretion of the network. As a result, private blockchain is more centralized in nature as only a small group controls the network. The most common examples of private blockchains are Ripple (XRP) and Hyperledger.

Additionally, some public blockchains also allow anonymity, while private blockchains do not. For example, anyone can buy and sell Bitcoin without having their identity revealed. It allows everyone to be treated equally. Whereas with private blockchains, the identities of the participants are known. This is typically because private blockchain is used in the corporate and business to business sphere, where it is important to know who is involved, but we’ll discuss that more later.

The pros and cons of public blockchain

One of the biggest advantages of public blockchain is that there is no need for trust. Everything is recorded, public, and cannot be changed. Everyone is incentivized to do the right thing for the betterment of the network. There is no need for intermediaries.

The other major advantage is security. The more decentralized and active a public blockchain is, the more secure it becomes. As more people work on the network, it becomes harder for any type of attack to be a success. It is nearly impossible for malicious actors to band together and gain control over the network.

The final piece of what makes public blockchain successful is the transparency. All data related to transactions are open to the public for verification. The transparency of public blockchain increases potential use cases, such as decentralized identity.

One of the biggest problems with public blockchain is speed. Public blockchains like Bitcoin are extremely slow, only managing to process seven transactions per second. Compare that to Visa which can do 24,000 transactions per second and you see where the problem is. Public blockchains are slow because it takes time for the network to reach a consensus. Additionally, the time needed to process a single block takes a long time compared to a private blockchain.

Public blockchains also face concerns over scalability. With the current state of things, public blockchains simply can’t compete with traditional systems. In fact, the more a public blockchain is used, the slower it gets because more transactions clog the network. However, steps are being taken to remedy this problem. An example is Bitcoin’s Lightning Network.

Lastly, energy consumption has been a concern when it comes to public blockchain. Bitcoin’s algorithm relies on Proof-of-Work, which relies on using a lot of electricity to function. That being said, there are other algorithms such as Proof-of-Stake which use far less electricity. 

The pros and cons of private blockchain

A big advantage of private blockchain is speed. Private blockchains have far fewer participants, meaning it takes less time for the network to reach a consensus. As a result, more transactions can take place. Private blockchains can process thousands of transactions per second. When you compare that to Bitcoin’s seven transactions per second, that is a massive difference.

Private blockchains are also far more scalable. As only a few nodes are authorized and responsible for managing data, the network is able to process more transactions. The decision making process is much faster because it is centralized.

However, the centralization of private blockchain is one of its biggest disadvantages. Blockchain was built to avoid centralization, and private blockchain inherently becomes centralized due to its private network.

Trust is also a bigger issue when it comes to private blockchain. The credibility of a private blockchain network relies on the credibility of the authorized nodes. They need to be trustworthy as they are verifying and validating transactions. The validity of records also can’t be independently verified.

Security is another concern with private blockchain. With fewer nodes, it is easier for malicious actors to gain control of the network. Unfortunately, a private blockchain is far more at risk of being hacked or having data manipulated.

Which is better?

The majority of people see blockchain as a way to foster trust and security, which makes public blockchain far more appealing. However, it is held back by both speed and scalability. Public blockchain is more popular with projects that are serving larger communities because of the transparency, which in turn fosters more trust.

However, it’s important to note that there have been concerns surrounding the privacy of public blockchain. Some believe that confidential data should not be stored on a public blockchain. Even if the information is encrypted, it will remain public forever and there is a chance that encryption could be hacked at some point. That being said, data protection is a hot topic and public blockchain is developing to be even more secure than ever.

In general, financial institutions and the corporate world may be better off with a private blockchain, especially if they are going to be storing information on it. In this case, it is often an advantage for companies to know exactly who has what type of access. However, they may lose trust and be more vulnerable to malicious actors as a result.

Blockchain technology is constantly evolving, and public blockchain in particular has seen some massive developments in just the last few years. As things continue to develop, public blockchains’ current disadvantages could become a thing of the past. 

Either way, there is plenty of room for both private and public blockchain to develop, and they each have their own use cases. Creating a hybrid solution could also be a viable solution for businesses. Some projects are working towards a model that uses a decentralized structure combined with centralized elements. This could offer the best of both worlds - security and transparency alongside scalability and efficiency.

Conclusion - The future is changing

Blockchain technology is constantly evolving, and as it grows in popularity things will certainly continue to change. At the end of the day, blockchain is about accessibility and can be used in a private capacity or a public one. They each have their own use cases, and there is a chance they may start to become one after a time.

Regardless, we can expect that blockchain will continue to take center stage in the years ahead, especially since we have only just started exploring the capabilities. From identity, government projects, healthcare, finance, and more, blockchain has the potential to fundamentally change our lives. 

In this article, we outline everything you need to know about decentralized identity, and how it could change the future. 

Decentralization and Blockchain

To accurately define decentralized identity, we have to first talk about blockchain. You most likely know of blockchain because of Bitcoin, and a big part of Bitcoin’s popularity and appeal has to do with blockchain technology.

Blockchain technology has several unique characteristics that solve the problem of trust, which make it a great fit for identity solutions. Firstly, a blockchain is unchangeable. Here’s how it works: 

Transactions on a blockchain are processed by a network. Computers work together to confirm a transaction, and every computer in the network must ultimately confirm every transaction in the chain. 

Transactions are processed in blocks (forming the “block” in “blockchain”), and each block is linked to the previous block. This structure makes it impossible to go back and alter a transaction. In addition, a blockchain is transparent. Each computer in the network has a record of every single transaction that has occurred. 

Decentralization is at the heart of blockchain technology. No one controls the data, so no one can override a transaction and the system is unlikely to fail. This is how blockchain builds trust - data cannot be modified, is independently verifiable, and is virtually impossible to hack.

What is decentralized identity?

Imagine that you have moved to a new country and need to register for all kinds of services. You will need to set up a variety of important things such as electricity, bank accounts, Netflix, and maybe even a new driver’s license. You may need to get a new phone and install many apps, all of which you are granting access to your data

Normally, you would have to register and provide proof of identity individually to each service provider, which can be a time-consuming process. Each time you want to access an individual account, you need to prove your identity by providing a password or PIN.

DID radically simplifies and improves this whole process. You prove your identity once to a trusted third party, and said third party handles all requests for identity and access so you don’t have to. Instead of submitting a copy of your passport to five different places, you only do it once on a secure platform.

Currently, third party providers of DID use blockchain technology to protect your information from data breaches and hackers. The only way to access your information is through a wallet (usually in the form of a desktop or mobile app) that requires a unique master password to access. 

It is important to note that while the Bitcoin blockchain is public, meaning everyone can see what is happening on it, DID works slightly differently. The different forms of identification and personal data are not publicly available; they are only accessible by the user.

DID and privacy

The dawn of the internet age has led many people to become more concerned with what data they share and who has access to said data. In the United States, 73% of people said their concerns over personal data privacy have increased over the past few years. In a study by Deloitte in 2018, 81% of US consumers felt like they have lost control over their personal data. 

And the concern is valid. With many massive data breaches happening every year, people are becoming more concerned in regards to who has access to their data, and rightfully so. Trust in massive corporations is falling, and people are starting to take steps to protect their data. 

DID gives people far more control over what data they share, and who they share it with. Instead of trusting a company to store data, anyone using DID can now choose where and how they share their personal data.

Additionally, DID is far safer than other forms of data storage. Traditionally, if someone has knowledge of your personal information, then they can impersonate you and perhaps even steal your identity. However, with a decentralized identity system, a hacker might have access to bits and pieces of personal information but be unable to prove an actual identity. For DID, you must have physical access to a device to validate identity, which is far too tedious and unrewarding for malicious actors to pursue. A hacker would much rather steal from thousands of people instead of just targeting one person, simply because the reward is much higher.

While more laws are coming into effect to help protect consumer privacy and identity management (most recently the GDPR), there is still a long way to go. That being said, governments are taking notice of DID and its potential applications. DID could solve a lot of bureaucratic issues while also ensuring that personal information is truly safe. 

Applications of DID

The ability to prove that you are who you say you are is an integral part of modern society. It’s part of Know Your Customer (KYC), which most companies are legally required to do in order to prevent illegal activities such as money laundering. However, what happens if you don’t have government-issued identification documents?

More than 1.1 billion people on the planet are unable to prove their identity, and as a result, can’t access vital services - like education and healthcare - that many of us take for granted. There have been several international and national initiatives to create some type of identification for those lacking one, however, government bodies are just as vulnerable to data breaches as any company is. Here DID can solve many issues, and it is starting to be considered a strong contender.

Refugees are some of those who regularly suffer from not being able to prove their identity. On the road to asylum, many do not have ID because it was destroyed, stolen, or left behind. A report by the Norwegian Refugee Council found 70% of Syrian refugees lacked basic identification documents. 

DID could offer a potential solution here, and is already starting to be used in Finland. The Finnish Immigration Service has been giving prepaid Mastercard credit cards that are linked to a unique digital identity stored on a blockchain. This has given refugees not only a bank account, but a permanent way to verify their identity.

If we consider a future where all people have a DID, then refugees wouldn’t have to worry about losing identification documents because it would be stored digitally. Even losing your passport wouldn’t be that big of a deal because you would still have a verified copy of it. If governments and companies can figure out a way to create a DID database that is completely secure, then we may be looking at a future that is paperless when it comes to forms of identification.

Interestingly, Microsoft has been a leader in introducing DID to mainstream society. The company has been working with the Decentralized Identity Foundation (DIF), the World Wide Web Consortium (W3C), and the general identity community to develop an open source DID application. 

The project is called ION, which was launched in May of this year and runs on top of the Bitcoin blockchain. The goal is to not only help those without any identification documents, but to also allow more privacy for the average internet user. While the project is still only in its infancy, it certainly has a lot of potential, and it’s nice to see a major corporation embracing a modern digital approach. Allegedly, Facebook was invited to participate in the project but declined, insisting it will follow its (awful) historic approach to user data. 

Conclusion

DID is slowly but surely becoming more mainstream, and is something that has the potential to radically change our future. However, it has raised the question that if DID becomes the new normal, won’t hackers just develop their technologies too? A blockchain can be hacked, however attempts aren’t often successful and for now, cryptocurrencies remain the main target. Given that people’s identities are on the line, any blockchain that works with DID should have extra protection. Blockchain isn’t at fault, rather human error (and criminal ingenuity) prevents anything from being totally secure.

Nevertheless, decentralized identification could possibly be the new normal and create a space where everyone has access to their identification documents, no matter if they are from a first world country or a third world country. This vision may seem slightly utopian, but there is true power behind this technology. 

The best part is that DID is already available to you. Using blockchain technology, the ESelfKey Wallet provides an identity platform where you can manage all of your personal information in one place. You’ll be able to choose what information you want to share, who gets access to it, and for how long. Welcome to the future of identity.

What is identity theft?

The first step in preventing identity theft is understanding what that means and being able to recognize it. Identity theft (also known as identity fraud by law enforcement) is defined as all crimes against individuals where personal and/or financial information is obtained illegally by using fraud or deception. The most common motivation for identity theft is financial gain.

Once someone steals your identity, they can do a number of things:

• Withdraw money from your bank account
• Apply for loans or credit cards under your name
• Use your health insurance to obtain medical care
• Steal your tax refund by using your Social Security number (SSN)
• Sell your information to other criminals
• Impersonate you online (also called catfishing)
• Commit criminal activities under your identity (ex. terrorist activities, murder, etc)

Identity theft is illegal in most of the world, usually punishable by jail time and/or fines. If identity theft is used to conduct criminal activity, the punishment is usually heavier. The majority of identity theft affects consumers, with the most common being credit card fraud according to the Federal Trade Commission (FTC).

Signs that your identity has been stolen

Once someone has stolen your identity, the signs are usually easy to spot. Most of us, at some point, have received a call from our bank asking about suspicious transactions, but there are other signs to look for.

• You stop receiving household bills. This can be an indicator that someone has taken your information and used it to change your billing address. If this happens, it’s best to call your utility providers and put a password on your account for any future changes.

• You are rejected for a loan or line of credit. If you have a good credit history and are suddenly rejected, this could be a sign that your identity has been compromised. Additionally, if you are approved but with higher interest rates, this can be another sign of identity theft.

• You receive bills for medical services you did not use. While identity theft for medical services is less common, it does occur. If it does happen to you, you should get in touch with the hospital that billed you for the services. Also keep an eye out for being rejected by a health insurance provider for a condition you don’t have, or your healthcare provider rejecting your claim because you have already reached your benefits limit.

• You are billed for purchases you didn’t buy. This is probably the most common form of identity theft. Most banks will give you a call if they see suspicious transactions, but you can be proactive by regularly checking your own accounts.

• Your tax return is denied. If you receive a rejection letter from the IRS (or your country’s equivalent) after filing your tax return, this could mean that someone else has filed a return under your name.

• “Test charges” show up on your credit card statements. Some criminals will make small charges, usually under $5, to make sure the card is still active. If these transactions go through, then the thief knows that they can make larger transactions.

• You receive calls from debt collectors for debt that doesn’t belong to you. This is a sure sign that someone has stolen your identity.

• You receive a notification that a company you work for or have an account with has been hacked. Usually, the company in question will let you know what steps you will need to take, or if you simply need to update your password. Either way, it’s a good idea to change your passwords anyhow and monitor your credit card transactions if necessary.
• You get a court summons in the mail. This is a result of criminal activity, and is unfortunately quite hard to disprove. If you think you may be a victim of this type of identity theft, you should contact law enforcement immediately.

If you notice any of these signs, it is important to take action immediately. There are also a number of steps you can take to prevent your identity from being stolen in the first place.

Preventing identity theft

An important first step you can take to prevent your identity from being stolen is to actively monitor your financial statements. If possible, check your bank account and credit card statements online at least once a week. If checking your statements online isn’t possible, make sure you are monitoring your monthly statements.

Another step you can take is to freeze your credit. This makes it a lot harder for someone to open a credit card or take out a loan under your name, as the bank won’t be able to run a credit check. It’s also free, and you can temporarily lift it if need be. However, it can be a bit of a nuisance as there are three separate credit bureaus you have to contact to do this in the US. You can also enroll in a credit monitoring service, such as PrivacyGuard or Credit Karma, or place a fraud alert on your credit.

Making sure you have strong, diverse passwords on all of your accounts is also key. We all know not to use passwords like “password” or “12345”, but having a strong password goes a lot further than that. Not only should you avoid personal things like pets or family names, but you should even avoid using words that are in the dictionary. If you find remembering different passwords for every account difficult, you can use a service like LastPass to generate unique passwords and safely store them for login.

How blockchain technology can help protect your identity

In recent years blockchain technology has built a reputation for providing an unbreakable and un-hackable payments infrastructure. If you're not aware of how a blockchain works, it typically goes like this:

1. Alice wants to send money to Bob - so she performs a transaction
2. The transaction is timestamped and recorded on a digital ledger
3. Once a certain number of transactions have been performed, they are collected in a "block" and cryptographically linked to the previous block of transactions - called a confirmation.

In order to alter her transaction, Alice would need to break the cryptographic hash of each of the blocks that have been added since. Given the complexity of the hashing algorithm and the resource-intensive nature of hacking this kind of infrastructure, this rarely makes economic sense. In short blockchain technology is set up in such a way as to make hacking it both technically difficult and uneconomical.

Given these impressive features, the question becomes: how can we utilize the secure and distributed nature of the blockchain to protect individuals from identity theft.

Well, since 2017, the ESelfKey Foundation has been building an end-to-end identity management solution utilizing the Ethereum blockchain. This ecosystem will allow individuals and corporations to authenticate themselves online while minimizing the amount of personal information that needs to be shared.

As a simplified example, imagine going to the liquor store and having to show your driver's license to prove that you are of legal drinking age. The liquor store is legally compelled to ensure that you are of legal drinking age, but typical forms of ID contain much more information than is necessary at this junction. A US driver's licence for example contains:

• The full legal name
• Date of birth
• Photo
• Current residence
• Height
• Weight
• Gender
• Eye color
• Hair color
• Signature
• Document number

You can be sure that, in an online environment, all this information is stored and will be leaked in the case of a data breach.

But now imagine the same situation, but instead of an ID you show a notarized certificate simply showing a facial imagine and the sentence: "We, NAME OF NOTARY, hereby confirm that John Doe is of legal drinking age."

In this second scenario, you can see a simplified example of how the ESelfKey ecosystem will use certifiers in order provide evidence but not information. In the case of a breach or a hack, no valuable information would be shared. All a hacker might know is that there is a man called John Doe and he's over the age of 21.

Then you combine this approach with the security and transparency of the blockchain, alongside decentralized identifiers, and you start having a strong identity management system that improves on the current system in many important ways.

Conclusion - How to protect yourself from identity theft

Unfortunately, identity theft is a problem that is not likely to disappear anytime soon and often, we only realize that our identity has been compromised once it is too late. There needs to be a shift in public thinking to be far more proactive in preventing identity theft. Stronger passwords, credit monitoring, and fraud alerts are all good actions to take, but they don’t ultimately solve some of the bigger problems.

It’s become a worryingly frequent occurrence for companies to be hacked, and there are plenty of opportunities for malicious actors to get a hold of your data. Most of us are in the bad habit of not reading the terms and conditions, and privacy policy of every website we sign-up to. We are often giving away a lot of our personal information and may not even realize it.

The time has come for us to take back control of our identity instead of waiting for companies, organizations, and government bodies to lose it. Self-sovereign identity is a very real possibility in the future, but the general population has to make the shift. More awareness needs to be put in place, and we need better solutions that actively prevent identity theft. Your identity is the one thing that should belong exclusively to you, let’s put the power back in your hands and let you decide who gets access to what information.

Download the ESelfKey Identity Wallet and take the first step towards protecting yourself from identity theft.