How Blockchain Could Solve the Problem of Digital Identity

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When Vitalik Buterin, the founder of Ethereum, has been asked lately about his favorite projects being built on the blockchain, he often names Proof of Humanity. Launched by the blockchain protocol Kleros and the non-profit Democracy Earth Foundation, Proof of Humanity looks something like an online phonebook, on which people can sign up and add their citizenship, degrees or skills. But while the concept is very simple on its surface, Buterin hopes that the system will be an onramp to all sorts of more advanced benefits, including better and fairer voting processes, universal basic income and social media networks that aren’t overrun with bots and misinformation.

To sign up for the registry, you make a short video of yourself, put down a returnable deposit of .157 ETH (about $400) and find one person who is already certified to vouch for you. Your profile then gets added to a theoretically secure and decentralized registry on the blockchain (as opposed to your data living on a Facebook or LinkedIn server). If other members of the community feel you aren’t real, or use the platforms’ facial recognition tools to determine you have duplicate accounts, they can dispute your profile. All of the hoops you have to jump through, combined with the continual communal monitoring of accounts, are meant to discourage the creation of bots or fake accounts in a way that Facebook or Twitter do not.

For this week’s newsletter, I spoke with Santiago Siri, the founder of the Democracy Earth Foundation and a board member of Proof of Humanity, as well as a couple blockchain experts who are more skeptical about Proof of Humanity’s goal to become the “internet’s social backbone.” Siri himself doesn’t necessarily see Proof of Humanity as a definitive issuer of internet IDs, but rather one step toward breaking out of what he terms the “colonial internet” controlled by a few Big Tech giants. Here are some of the main problems Siri hopes Proof of Humanity can solve–and the challenges that the project faces.

Creating a universal basic income

Perhaps the first and most immediate appeal of Proof of Humanity is its built-in universal basic income component. When you sign up, you start accruing the platform’s cryptocurrency token, called UBI. (Clément Lesaege and Federico Ast were the primary founders of Proof of Humanity, while Siri took the lead on creating UBI.) Users receive $50-$100 a month worth of the token, whose value fluctuates along with the larger cryptocurrency market. Siri says that over the past 11 months, 14,000 users, most of them outside the United States, have accrued over $50 million worth of UBI. He is particularly excited to be able to provide UBI to some of the one billion people in the world who lack a legal proof of identity. “We want to use the wealth and incredible power of the blockchain to to really address social problems like poverty or marginalization,” Siri says. “This is a snapshot of where we’re potentially headed: for some kind of global crypto UBI that’s independent of any nation state or traditional bank.”

Where is all the money coming from? Siri says that DeFi (decentralized finance) mechanisms have driven fundraising up to this point, including liquidity mining, in which investors lend money to a project and receive a token back that they hope will appreciate in value. He understands that relying on mining isn’t a scalable strategy on its own: “The mining program was there to help bootstrap the network,” he says.

The Proof of Humanity team is in the process of exploring other funding strategies, including burning tokens and public goods funding embedded in the Ethereum ecosystem. (Buterin often talks about the importance of public goods, and in September, wrote on Twitter that he supported the idea of building stronger structural support for UBI. “We need to move beyond individual donations and get to persistent commitment by *mechanisms*,” he wrote.)

The value of Proof of Humanity’s UBI also rises and falls with the larger Ethereum market: in the wake of the current cryptocurrency bear market, UBI’s price is less than half of what it was just a month ago (now about 7 cents each). Extremely high transaction fees—sometimes higher than a month’s worth of UBI—also make it hard for UBI users to take money out.

Siri says he isn’t worried about UBI’s dependence on these greater forces. “I lived through several bear cycles. The best thing to do during corrections is to simply focus on building and developing whatever is required next for the project,” he says.

Stopping the spread of bots and misinformation on social media

The second promise of Proof of Humanity is that it could open the door for healthier social media platforms. Dominant platforms like Facebook and Twitter are rife with bots and misinformation campaigns. Although they’ve made many efforts to crack down on noxious behavior, their underlying incentives to maximize users, engagement and profit mean that they’re engaged in unending games of whack-a-mole. Siri says that if a social media platform was connected to Proof of Humanity so that everyone on the site had to prove they were a human, the ability for bot farms to churn out fake accounts would be dramatically reduced.

Proof of Humanity also provides an alternative to Captchas, which are getting increasingly onerous as AI gets smarter. “AI keeps learning more and more about how we look at the world. Finding some kind of crystal-clear mechanism that can help signal whether or not you’re interacting with a human is going to be very important for years to come,” he says.

And the technology could likewise play a role in drop culture, the phenomenon in which merchandise—from sneakers to concert tickets to NFTs—is released in limited-time bunches, leading to scalpers deploying bots to buy items up faster than humans can, which can result in price gouging. Theoretically, pairing Proof of Humanity with vending platforms could ensure that only humans could participate in these sales.

Making voting in DAOs fairer

The Democracy Earth Foundation has long been involved in the attempt to create fairer voting efforts: they created the voting platform Sovereign in 2017, which was deployed by various voting bodies around the world, including by the state of Colorado. While using the blockchain to vote in U.S. general elections may still be far-off, the foundation has turned its attention to voting in DAOs (decentralized autonomous organizations), which have skyrocketed in usage over the last year. Both Siri and Buterin have voiced concerns that the voting processes for DAOs are skewed toward the wealthy because vote power typically corresponds to the number of tokens they control.

Siri says that he is working with DAOs to implement one-person-one-vote systems. He also hopes Proof of Humanity will develop secret voting protocols with “zero-knowledge NFTs,” which ensure the legitimacy of a vote while keeping the person who cast it private.

But Ari Juels, a computer science professor at Cornell Tech, is skeptical that voting on the blockchain is ready for prime-time. “Blockchains are wonderful for many things, but their transparency does not harmonize well with secure voting. This is why we have secret ballot elections in most democracies,” he says. “And even if you develop secure voting schemes, you still have the problem of bribery or coercion. It’s difficult to build a system that definitively prevents vote buying.”

But, just creating a universal ‘proof of humanity’ is still a huge challenge

Kate Sills, a software engineer who previously worked at the blockchain Agoric, is concerned about several aspects of Proof of Humanity. She contends it would be easy enough for people to submit multiple profiles by changing their facial hair or makeup, and also raises the possibility that vulnerable people could be pushed out of the registry by concerted group efforts. (On Reddit, for example, zealous nationalist groups often successfully get moderators banned by reporting made-up offenses en masse.) “I think it’s going to be extremely hard to have one list that is accurate and that doesn’t bring in our human biases and the kind of persecution that we already see in the real world,” she says.

Siri, in response, notes that regarding questionable profiles, there are “up to 7 rounds of appeals where the losing side has to pay the price on each successive round.” He is also cognizant that humans examining other human’s faces isn’t a perfect system, and that it could lead to some errors. But he says that implementing more technology, including machine learning into the process poses much greater risks. “If I go out and start scanning people’s eyes, there’s no way I can guarantee that a venture capital firm who controls 80 million fake eyes couldn’t come and control the entire network without disclosing it,” he says. “I wish we had a better trade-off than that, but we need to compare people’s faces so that anyone can audit the profiles. That gives people the guarantee that it’s a decentralized registry.”

And at the moment, Siri isn’t aiming for Proof of Humanity to become a definitive registry in the way that the app’s promotional materials seem to boast. “I don’t see Proof of Humanity as one protocol to rule them all,” he says. “We might get multiple protocols doing human identity for different purposes.”

Ultimately, he sees Proof of Humanity as one puzzle piece toward creating more robust and equitable systems on the blockchain. “Throughout the last 10 years, we have seen mostly financial innovation on these networks,” he says. “To create social media 3.0 with all kinds of welfare mechanisms, Proof of Humanity is just one step in that direction.”

Correction, Jan. 28
The original version of this story misstated the role Santiago Siri played in Proof of Humanity. He is a board member, not the sole founder or lead creator.

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