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India’s Telecom Regulator Completes Mobile Blockchain Pilot with IBM

India’s telecom regulator and telecom firms completed blockchain tests with IBM to improve mobile network data records.

The Telecom Regulatory Authority of India (TRAI) has completed blockchain pilots with tech giant IBM to improve mobile data records. The trials were reported today, Dec. 12, by local English-language, Indian daily newspaper The Economic Times.

The TRAI, India’s telecom regulator, along with major telecom providers, have completed tests with tech firms such as IBM in order to explore blockchain’s benefits in improving mobile network systems such as mobile number portability (MNP) and the Do Not Call Registry (DNC).

Sriram Raghavan, vice president of IBM Research, claimed that the company has carried out proof-of-concepts (PoC) and pilots with “all the major telecom providers,” as well as the TRAI. However, the VP did not specify the names of telecom firms that participated in testing.

Raghavan explained that the latest telecom blockchain application will allow companies to store MNP and DNC data on a private distributed ledger with “customer consent.” According to the expert, the solution will enable the governmental agency to have better tools for monitoring the network in order to “spot malfeasance quickly.”

Mobile number portability, or MNP, is a feature that enables mobile phone users to retain their mobile telephone numbers when shifting from one mobile network carrier to another. Do Not Call Registry, or DNC, represents a data record that aims to provide customers with an opportunity to limit incoming telemarketing calls.

A TRAI official has confirmed that telecom suppliers are currently working on agreements with tech firms, as they said on a meeting this Monday. According to the official, the companies will set up the launch of blockchain-based mobile record systems “in the next couple of months.”

In late May of this year, the TRAI first announced its plans to implement blockchain in order to prevent malfeasance in the telecom industry. The agency explained that the blockchain solution would provide regulators with better tracking tools for spotting telecom spammers who use unregistered 10-digit phone numbers.

In mid-November, IBM partnered with the major Spanish telecom supplier Telefónica in order to manage international mobile network call traffic.

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Indian Government Panel Suggests Crypto Dealings Should Illegal, Local Sources Say

An Indian government panel has reportedly proposed regulation making cryptocurrencies illegal via the Reserve Bank of India.

An Indian government panel has reportedly suggested a new legal framework within the Reserve Bank of India (RBI) that completely bans cryptocurrencies in the country. English-language Indian media outlet CNBCTV18 reported on the framework on Dec. 6.

The article cites an unnamed source as noting that “the panel has categorically said that all such currencies should be treated as illegal” and that “any kind of dealing in such currencies should be treated as” such.

CNBCTV18 notes that the Indian government had created a panel to create “norms” for digital currencies — headed by secretary of the Department of Economic Affairs (DEA) Subhash Chandra Garg — which submitted its report to Indian finance minister Arun Jaitley.

The debate over crypto’s legality began in April of this year, when the RBI stated it would no longer provide services to persons or legal entities involved with crypto. In response to the ban, eleven crypto-related businesses filed a suit against the bank in the country’s Supreme Court, with the legal outcome still unclear.

As Cointelegraph reported in November, the Indian government is also working on cryptocurrency regulation. The stipulated bill is expected to become public this month.

The current climate isn’t friendly overall to crypto enthusiasts in India. Also in November, the developers of India’s first Bitcoin “ATM” were arrested on criminal charges.

While the charges haven’t been disclosed, local mainstream media reported that they include criminal conspiracy, cheating and forgery. The developers were also the co-founders of the country’s first crypto exchange, Unocoin.

At the same time, one of the leading global auditing companies, Ernst & Young (EY), announced the are looking to hire 2,000 employees in India. The objective is to expand its digital services, including artificial intelligence (AI) and blockchain applications.

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TransferGo Opens Payments Corridor to India Using Ripple Tech

Payment provider TransferGo has announced it is launching a remittance corridor to India that uses Ripple technology for near real-time transactions.

Available from “anywhere in Europe,” the firm said in a press release that using Ripple’s services allows it to replace the “multiple slow incumbent communications systems, most prominently Swift, where transfers can take up to 2–3 days.”

The release did not clarify which of Ripple’s blockchain-based payments products TransferGo is using for the service.

The payments company cited the “multi-billion dollar” Europe-to-India payments corridor for its initial focus on that market, adding that “high” Ripple adoption in India was a factor.

TransferGo also hinted that this may just be the start of its blockchain-based remittances, saying the integration “opens up new horizons for TransferGo to develop additional products and services.”

Daumantas Dvilinskas, founder and CEO of TransferGo, said in the release:

“By using Ripple’s revolutionary blockchain technology, we’re able to establish real-time communication between us and our banking partners in India, allowing TransferGo customers to send money to family and friends or make international payments immediately.”

The firm also announced a slower but free service along the same corridor, that also uses Ripple payment rails. Offering “zero fees and a mid-market rate,” payments will arrive in 2-3 business days, according to the release.

Ripple’s SVP of customer success, Marcus Treacher, said “TransferGo is a great example of a forward-thinking payment provider that’s leaning in to new technology to facilitate real-time, cross-border money transfers for their customers. That’s a big step forward.”

Counting rupees image via Shutterstock

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India Sends Officials to US, Japan and Switzerland to Study Cryptocurrency and ICOs

The Securities and Exchange Board of India (SEBI) organized tours to other countries for its officials to study cryptocurrencies and initial coin offerings (ICO), according to its 2017-18 annual report.

The Indian regulator reports that authorities have already undertaken “study tours” in particular to study cryptocurrency and ICOs at Japan’s Financial Services Agency (FSA), the U.K. Financial Conduct Authority (FCA) and the Swiss Financial Market Supervisory Authority (FINMA).

The overseas study trips reportedly took place to help officials “engage with the international regulators and gain deeper understanding of the systems and mechanisms,” the document states.

The report is not the first time that Indian authorities have expressed their interest in the way other countries approach cryptocurrency. For instance, the Reserve Bank of India (RBI) also published its annual report 2017-18 in which the authority draws attention to different types of crypto regulation worldwide, focusing on Japan and South Korea in particular.

As Cointelegraph reported August 30, citing the annual report, RBI is currently considering the feasibility of issuing a rupee-backed central bank digital currency.

The SEBI report comes against a background of a controversial RBI decision that came into effect July 5 and implies a ban on banks’ dealings with crypto-related businesses and persons.

The Indian Supreme Court had upheld RBI’s restriction until the July hearing, which was later postponed till September 11. The court also ruled not to grant interim relief to those affected by the ban.

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Reserve Bank of India Confirms It Is Looking Into Making a Central Bank Digital Currency

India’s central bank, the Reserve Bank of India’s (RBI), has confirmed the creation of an inter-departmental group tasked with analyzing the feasibility of issuing a rupee-backed central bank digital currency (CBDC), the Economics Times reports August 30.

The group’s establishment and focus was detailed in the bank’s Annual Report 2017-18, confirming earlier details that followed a meeting of India’s Monetary Policy Committee (MPC) in April.

The impetus for investigating the issuance of a fiat-tethered CBDC reportedly derives in largely from cost considerations: the Economic Times cites statistics that suggest the cost of printing paper notes in India was 6.3 billion rupees (about $89 million) for the financial year 2018. RBI’s report noted that:

“Globally the rising costs of managing fiat paper/metallic money, have led central banks around the world to explore the option of introducing fiat digital currencies”.

Other factors include “rapid changes in the payments industry” and the “rise” of private digital tokens, according to the Economic Times.

EY India’s Mahesh Makhija told the paper that “the idea of a central bank issued digital currency is very promising, though issues around digital counterfeiting will need to be addressed.” He further remarked that RBI’s indication that it is open to the idea of using distributed ledger technology (DLT) for payment systems, clearing, and settlement processes is “a welcome development.”

While noting that crypto does not currently “pose systemic risks,” in its report, the bank cautioned that “the cryptocurrency eco-system [sic] may affect the existing payment and settlement system which could, in turn, influence the transmission of monetary policy.”

Calling for coordination with global regulators to tackle the challenges posed by cryptocurrencies, the bank announced it would meanwhile be keeping a close watch on:

“[Crypto] trading [that] shift[s] from exchanges to peer-to-peer mode, which may also involve increased usage of cash. Possibilities of migration of crypto exchange houses to dark pools/cash and to offshore locations [raise] concerns on Anti Money Laundering (AML)/Combating the Financing of Terrorism (CFT) and taxation issues.”

As Cointelegraph has reported, the RBI’s high-profile and controversial ban on banks’ dealings with crypto-related businesses and persons came into effect July 5. In response, certain domestic exchanges have either suspended fiat withdrawals or indicated plans to transform into peer-to-peer (P2P) platforms so as to avoid in-house crypto-fiat conversion.

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India Eyes State Digital Currency to Cut $90 Million Banknote Bill

India’s central bank is researching how to introduce a rupee-backed central bank digital currency (CBDC) into its monetary policy in a bid to reduce its hefty annual bill for minting physical cash.

The news was revealed in the Reserve Bank of India’s (RBI) annual report, published Wednesday, which indicated an inter-departmental unit has already been formed within the organization to study the “desirability and feasibility to introduce a central bank digital currency.”

The effort apparently comes in response to a rapidly changing landscape of digital payments and the “rising costs of managing fiat paper/metallic money,” the bank said.

A news report from the Economic Times on Thursday further indicated the RBI also said that, for 2018, the cost of printing paper notes alone totaled nearly $90 million.

While the RBI did not reveal whether the potential CBDC may be blockchain-powered, it claimed the utilization of distributed ledger technology (DLT) in payment and settlement solutions “holds the promise of significant economic benefits in future.”

Meanwhile, in contrast to its support for adoption of DLT at a state level, the RBI again toughened its stance on crypto trading in the report, shifting its focus to transactions between individuals following its ban on bank accounts for exchanges announced in April.

“Developments on this front need to be monitored as some trading may shift from exchanges to peer-to-peer mode, which may also involve increased usage of cash,” the RBI warned in its yearly report, adding:

“Possibilities of migration of crypto exchange houses to dark pools/cash and to offshore locations, thus raising concerns on anti-money /CFT and taxation issues, require close watch.”

Since the RBI’s bank account ban went into effect in July, local exchanges have been adopting various methods to find new revenue models, including moving business focuses to peer-to-peer trading.

Indian rupees image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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India: Sources Claim Central Bank ‘Researching’ Blockchain to Decide ‘What It Can Adopt’

Noises in the Indian media Monday, August 27 suggest the country’s central bank is keen to improve its understanding of cryptocurrency and blockchain, allegedly setting up a dedicated unit a month ago.

As Economic Times reports, citing “people familiar with the central bank’s plans,” the unit focuses on “research” of the phenomena, “to check what can be adopted and what cannot.”

The reports come as cryptocurrency remains taboo for Indian banks after the Reserve Bank of India (RBI) banned them from servicing industry businesses in April.

Despite a slight nuance set to allow cryptographic tokens (but not cryptocurrencies themselves), official endorsement of Bitcoin and its ilk remains lacking.

According to the unnamed sources, however, there could be signs this perspective is about to change.

“As a regulator, the RBI also has to explore new emerging areas to check what can be adopted and what cannot,” Economic Times quotes them as saying:

“A central bank has to be on top to create regulations. This new unit is on an experimental basis and will evolve as time passes.”

India would further echo current sentiment in Iran by softening its stance, the latter’s central bank hinting over the weekend it would review its ongoing cryptocurrency ban, also in place since April, with a more favorable outcome.

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Online ID Control: Blockchain Platforms vs. Governments and Facebook

We’re living at a time of unprecedented concern over identity. Fears abound that our personal data is being abused by distant third-parties, while this data has become more valuable to us at a time when our identities and the identity politics we base around them have become more central to our lives. It’s in this context that blockchain technology has appeared, and while its application beyond cryptocurrencies is still limited, protecting our online identities and data more securely looks set to be one of its most central applications.

In its most basic outline, the use of blockchains in the area of securing personal data is simple: Our data is stored in encrypted form on a decentralized network, and we can grant other parties access to (some of) this data by the use of our private keys, in much the same way that using our keys allows us to send cryptocurrency to someone else. By virtue of this basic framework, blockchain tech promises to place control over our data back in our hands, at a time when Facebook and other technology giants have been abusing and misusing it. And seeing as how crypto-giants such as Coinbase have recently moved into the area of decentralized ID, it would seem that it already has strong backing and support within the cryptocurrency industry.

However, as sound as this all is in principle, there are a variety of challenges — some technical, some commercial — that have to be overcome before blockchains can be used at scale to secure personal data. The companies working in this area are all approaching these problems from different angles, yet it would appear that in solving them, a (partial) departure from the ideals of ‘complete’ decentralization is necessary.

And even when the technical challenges are all surmounted, there will still be the issue of weaning people off platforms such as Facebook, which — thanks to the profits of centralization — can afford to offer the public an enticingly ‘free’ and polished service.

Control and privacy

Alastair Johnson, CEO and founder of e-commerce and ID platform Nuggets, Johnson understands the pitfalls of storing masses of ID data in centralized siloes all too well.

“Today, the reality is that individuals do not control their personal data in any meaningful way. On average, a person has personal data — in the form of payment card details, home addresses, email addresses, passwords and other personal details — spread over roughly 100 online accounts. They can access this data but they do not own it.”

By contrast, the use of blockchain tech grants newfound control to the user, who will be empowered to share their ID data only with the parties they approve. This is achieved primarily through the utilization of “decentralized identifiers” (DIDs), as explained by the Sovrin Foundation, which is building a blockchain platform aimed at providing individuals with “self-sovereign identity” (i.e. an ID they can take with them from platform to platform). As it notes in its white paper, “decentralized identifiers” (DIDs) not only encode information that identifies someone as, say, female, Asian, 35, and living in France, but they also circumvent the need for a centralized authority to verify ID claims.

“A DID is stored on a blockchain along with a DID document containing the public key for the DID, any other public credentials the identity owner wishes to disclose, and the network addresses for interaction. The identity owner controls the DID document by controlling the associated private key.”

In other words, a protocol for a suitable blockchain is created, users register their ID data on this blockchain, and then use their private keys to decrypt this data for chosen parties. This is the kind of system also employed by Nuggets, although in its case it’s referred to as “zero-knowledge storage,” since no one else knows what your data says about you. And it’s also the system being worked on by Coinbase, which on August 15 announced its acquisition of ID-focused startup Distributed Systems. Having purchased the San Francisco-based company for an undisclosed fee, it will now develop a decentralized login system for its own crypto-exchange platform that will enable users to retain ownership of their ID credentials.

“A decentralized identity will let you prove that you own an identity, or that you have a relationship with the Social Security Administration, without making a copy of that identity,” it wrote in its press release.

With such a setup, there’s little chance of a Cambridge Analytica-style scandal where data gets shared with unwanted groups or individuals, while it also grants unprecedented power to the individual user, who’s likely to be treated with much more respect by companies now that his data is in such scarce supply. As explained by Johnson, this provides a vast improvement over the current stage of affairs.

“[Personal data] is stored and controlled in a series of centralized databases controlled by institutions such as retailers, marketing companies, utility companies and data reporting companies. In order to make purchases online, individuals simply authorize these different bodies to connect the different pieces of information they hold in order to authorize a transaction.”

However, while the individual user is currently dependent on hundreds of different companies to store and transmit his/her data in order to gain access to the services, the introduction of blockchain technology completely reverses the balance of power. Johnson shares with Cointelegraph:

“Blockchain-based solutions flip this model on its head, so that individuals can store and control their data associated to a digital identity. It is not stored in the centralized databases of third party organizations, it can be stored on the blockchain in a decentralized network. With the individual controlling their data in this way, they are then in full control to ideally not have to share or store anything by using attestations, tokens or references and share it only if and when they choose to do so.”

Yet, this is only the tip of the iceberg, as using blockchain tech to confirm who we are furnishes many additional benefits beyond user control. For one, it heightens privacy, since with many of the platforms being proposed, our ID credentials won’t even be revealed to those parties and organizations requiring their verification.

This is enabled via the use of zero-knowledge proofs (ZKPs), a cryptographic method that can prove a claim without actually sharing the data (‘knowledge’) through which the claim is proven. ZKPs are being implemented by Sovrin and are also planned for use by such startups as Civic, Verif-y, and Blockpass. By using them, these companies will make the process of ID verification simpler and more efficient, while opening up the possibility of storing biometric ID on the blockchain. They’ll spare organizations that verify our IDs the headache of having to securely store personal data after validating it, which in turn eliminates a potential vulnerability, given that these organizations would have normally kept any data they received on a centralized database.

And while not all decentralized identity platforms will employ ZKPs, others will still make use of functionally similar methods. For example, SelfKey harnesses a technique it describes as “data minimization,” which “allows the identity owner to provide as little amount of information as possible to satisfy the relying party or verifier.” This sidesteps the need to develop advanced technologies such as ZKPs, although it raises questions as to what is meant by ‘minimal.’ SelfKey writes that “claims can be signed in a way whereby one could choose to disclose only a minimum of information.” But without a more formal specification of “minimum” and “choose,” it’s conceivable that such functional approximations of ZKPs might end up revealing more data than some users would want.

Security

Aside from providing greater user control and privacy, blockchain-based platforms for verifying ID are more secure than their centralized counterparts. This is because, being distributed among multiple nodes, they won’t suffer from having a single point of failure like traditional ID systems — e.g. government databases, social networks. As such, one or two nodes of a blockchain can become inactive and users will still be able to use it, while the encryption involved prevents any publicly available data from being gleaned for sensitive info.

By removing the single point of failure, decentralized ID platforms make a large, Yahoo! style hack nigh-on impossible. Instead of being able to penetrate a centralized database that houses all user information in a single location, attackers will have to obtain the private keys for every individual on a one-by-one basis, something which is extremely unlikely in practice. Alastair Johnson agrees:

“The major benefit of a decentralized ledger of personal data over a centralized database is the security against hackers that it provides. We’re all familiar with the major data breaches that have occurred in recent years, such as that at Equifax in 2017. These centralized databases act like magnets to hackers who often only need to take advantage of a single vulnerability to either take them down or extract data from them.”

By contrast, decentralized ledgers aren’t so sensitive to cyberattacks. “The hijacking of a single node will not disrupt the ongoing functioning of the ledger, as the other nodes can continue to operate without the compromised node’s involvement and the network requires consensus to prove the blocks.”

Security is part of the reason why the Indian government, for example, is turning to blockchain for its AADHAAR database — the world’s biggest biometric ID system, containing the records of over one billion people – as the country has been the victim of repeated hackings over the past year.

With such a revamped platform, there will be a variety of security benefits. The transparency and immutability of blockchains would mean that users are able to see when their data has been accessed and by whom, thereby providing a deterrent to any would-be hacker. Similarly, this transparency and immutability can be violated only in the unlikely event that a bad actor assumes control of 51 percent of the blockchain’s nodes, which in theory would enable to access data and then erase the corresponding records of this illegitimate access.

AADHAAR currently isn’t blockchain-based, while a comparable project from the government in Dubai to use blockchain-based ID at the international airport is still under construction. However, one government-led ID system than does use distributed ledger technology (DLT) right now is in Estonia. Its KSI (Keyless Signature Infrastructure) Blockchain forms the backbone of various e-services, including e-Health Record system, e-Prescription database, e-Law and e-Court systems, e-Police data, e-Banking, e-Business Register and e-Land Registry.

Once again, the use of the KSI Blockchain provides greater transparency than previous systems, since it detects when user data has been accessed and when it has been changed. And as the e-Estonia FAQ explains, it’s much quicker than traditional platforms in detecting misuses of data:

“[It] currently takes organizations […] about seven months to detect breaches and manipulations of electronic data. With blockchain [solutions] like the one Estonia is using, these breaches and manipulations can be detected immediately.”

Not only are breaches capable of being detected immediately or quickly on a blockchain-based ID system, but they’re more likely to be detected more quickly than with a centralized platform due to their public and continuous access to scrutiny from a wide range of armchair experts and professionals alike, as highlighted by PolySwarm CTO Paul Makowski in a December blog post on decentralized threat intelligence:

“Geographically diverse security experts proficient at reverse engineering or capable of providing unique insight will be able to exercise their knowledge from the comfort of their own home or wherever (and whenever) they choose to work.”

Standardization, interoperability

At the present moment in history, the world’s digital identity systems are siloed off from each other, separated in a way that forces people to create new accounts and new data for virtually every digital service they use. This causes personal data to proliferate to dangerous levels, making data breaches and cybercrime much likelier. For instance, the cost of identity theft reached $106 billion in the United States alone between 2011 and 2017, at a time when the average consumer has a staggering 118 online accounts (at least in the United Kingdom, where data was available).

Blockchain-based digital ID systems offer a way out of this. While most chains are currently cut off from each other, standards for sovereign digital identity are being devised by the Digital Identity Foundation (DIF) and the World Wide Web Consortium (W3C). Similarly, a number of startups are building interoperability platforms connecting separate blockchains together, including Polkadot, Cosmos and Aion. By working to achieve an ecosystem in which the standards of one identity platform are accepted by all other platforms that require ID verification, such organizations could dramatically reduce the amount of personal data people need to produce. Instead, users would create an account with one blockchain-based ID service, which they’ll then use to register with a host of other services and systems.

INFOGRAPHICS

Never Stop Marketing CEO Jeremy Epstein said in a December blog:

“Interoperability standards free up capital and time to drive value. What’s more, it offers the possibility to pool security (making the whole system more robust against attack) and enable trust-free transactions across chains.”

Blockchain interoperability is still a nascent field, and different organizations are pursuing different approaches to it. However, to take one example, Polkadot is aiming to achieve interoperability via its “heterogeneous multi-chain,” which has three fundamental components. These are “parachains,” which are in fact the individual blockchains being linked together, “bridges” that connect each parachain to the Polkadot network, and then the Polkadot network itself, which is a “relay chain” of the various parachains being connected.

Other routes to interoperability diverges from this, with Cosmos achieving inter-chain communication via use of the Tendermint consensus algorithm, and with the Aion network monetizing interchain transactions. However, assuming that an interoperability platform receives universal adoption within the blockchain ecosystem, users would find that they’ll have to register their personal data only once. From then on, they’ll be able to provide other platforms with ID attestations securely and quickly, all without having to reveal any of their data to the companies and services they use.

Scaling toward a new kind of blockchain

The benefits promised by blockchain-based ID systems — control, security and standardization — are all appealing, yet questions remain as to how feasible such systems are and how long we’ll have to wait for them to be released in fully functioning form. Added to this, there’s also the worry that — for all the improvements offered by blockchains — as a society we may still remain wedded to ‘traditional’ online services and the organizations responsible for them, which may actively resist the adoption of decentralized platforms that enable us to keep data to ourselves.

Unsurprisingly, the biggest issue with regard to feasibility is that of scalability, so often the achilles heal of many a crypto-based project. Given that an ID service should — by definition — be able to serve millions of people, any blockchain that forms the basis of such a service has to be significantly scalable. Yet, so far the most popular blockchain for decentralized applications (DApps) — Ethereum — was almost brought down by a popular video game last year, CryptoKitties. This is why most of the platforms mentioned above aren’t built on any of the most well-known blockchains, but rather on proprietary ledgers, some of which don’t meet the conventional definition of a decentralized blockchain.

For example, Enigma is a “decentralized computation platform” that has been designed for use with identity verification, among other things. As described in its white paper, it solves the scalability problem by delegating all “intensive computations to an off-chain network.” This network also stores all the user data, while the blockchain itself merely stores “references” to this data. In other words, Enigma’s platform isn’t really a blockchain — and while its off-chain network is still distributed (although each node sees separate parts of the overall data), this isn’t decentralization in the way that, say, the Bitcoin blockchain is.

Something similar could be said for other ‘blockchain-based’ ID platforms: Estonia’s KSI Blockchain isn’t a full-fledged blockchain that uses asymmetric key cryptography, but rather a Merkle tree-based ledger. Meanwhile, the Sovrin network achieves consensus via a limited set of “validator nodes,” arguably making it less decentralized than certain other blockchains. Together, what such tradeoffs reveal is that, if an ID platform is to be scalable (and also private), it needs to be less distributed in certain areas — and arguably less secure as a result. But more importantly, from a practical viewpoint, it also needs to redefine and adapt just what a ‘blockchain’ is, since the most familiar chains currently aren’t up to the task of securing and communicating our personal data on a massive scale.

Vested interests

This is why even the most advanced projects have roadmaps that extend beyond 2020, since a viable ID platform requires a new kind of distributed ledger that squares the need for cryptographic transparency with the need for individual privacy. And even if any of the platforms above reach this goal anytime soon, they will have another massive hurdle to clear: the dominance of existing arbiters of identity, including social media giants like Facebook, as well as national governments.

Governmental initiatives

For instance, the U.K. and Australian governments have been investing millions in building their own centralized ID verification systems in recent years, making it unlikely that they’ll easily give way to a decentralized alternative. Likewise, the idea of Facebook overhauling itself with a truly decentralized platform — where users keep their personal data a secret — is, well, frankly unthinkable, seeing as how the social network reaps billions in annual profit from selling our data to the highest bidder. It’s also widely used to identify people online, so it’s unlikely that it will give up its dominance to blockchain-based platforms easily.

That said, a small number of national and state-based governments (e.g., Singapore, Illinois) have been trialling blockchain-based ID systems. In addition, figures within the burgeoning crypto-ID industry are hopeful that public and private organizations alike will either be forced to decentralize or will fall by the wayside.

“When you operate a centralized system that provides your organization with control and allows you to benefit from this position, it’s understandable that you might be resistant to change,” says Alastair Johnson. “But when there is a penalty if this information is breached in the form of fines, loss of share price and cost of recovering the situation and all the PR damage that comes with a breach, businesses will start to see that the model has to fundamentally change.”

A key driver of this change could be public sentiment, which has already been shifting in the wake of the Facebook-Cambridge Analytica scandal. “The blockchain provides clear benefits for customers in terms of control over personal data and digital identities and I expect the public recognition of this to move from an early adopter cohort to an early majority in the near future,” Johnson says. “From the other side, I expect organizations that have already experienced breaches in their centralized databases to be amongst the most willing to adopt blockchain-based solutions, as they seek to rebuild trust with consumers.”

It could be argued that slick, free-to-use, ad-based services such as Facebook will always be more attractive to the average user — a view strengthened by the fact that Facebook reported a 13 percent year-on-year increase of users in April, despite its recent loss of younger users in the wake of the aforementioned data harvesting scandal. However, Johnson believes that a gradual sea-change in attitudes is underway.

“The ‘Delete Facebook’ movement is one sign of change, as is the continuing scrutiny that the tech giant is being put under by American and European authorities. People are starting to wake up to the fact that their personal data is valuable. Not only could blockchain help them to monetize it for themselves, it will also eradicate the kinds of costly personal data loses that I have experienced myself.”

And even if blockchain technology is still largely unproven outside the domain of cryptocurrencies, it will start winning converts as soon as it demonstrates its superiority to previous systems when it comes to privacy and security.

“Right now, there may be hesitation to adopt decentralized platforms, but its common sense that personal information should be owned and controlled by the person, and because of this it will prevail.”

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Senior BitConnect Promotor Arrested by Indian Authorities

A promoter of the controversial cryptocurrency platform BitConnect was arrested on August 19, according to a local news outlet in India.

Former BitConnect India head Divyesh Darji was arrested at Indira Gandhi International Airport in New Delhi on Sunday, the India Express reported. The Criminal Investigation Department of Gujurat police announced they arrested Darji after receiving an alert from the nation’s immigration agency.

According to P. G. Narwade, an inspector from the police department, Darji was en route from Dubai to the city of Ahmedabad when he was arrested.

He said:

“The accused held seminars, events in India and other countries promising high interest — daily interest rate of 1 percent — on investment in BitConnect coins. The cost of one BitConnect coin on January 16, 2018, when the company shut down, was USD 362.”

As CoinDesk reported, BitConnect’s lending service was shut down this past January after regulators in Texas and North Carolina said the company was engaging in the sale of unregistered securities tied to a token sale. The shutdown resulted in the startup’s BCC token’s price crashing, falling from its high of $400 at the beginning of the year to $17.25 on Jan. 17. The token is trading below 70 cents as of press time.

In addition to the unregistered security sale, BitConnect was also infamously accused of conducting a Ponzi scheme, particularly after several prominent figures in the crypto community levied criticisms against it, including the founder of ethereum, Vitalik Buterin.

After the platform’s shutdown, former BitConnect investor and promoter Trevon James said the FBI had begun investigating the project, according to a YouTube video he posted in March.

Police car image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.