Balázs Némethi - How Blockchain Will Connect the Material Space to the Foundation of the Digital Space: Identity

So just circle back to the previous presentation, we are very, very 20, 20 as well. And I might get there exactly what they're doing, but let's, let's start a little bit from the blockchain part again, just because we never heard enough, but I will try to bring in little bit. So of course, last year's been used. AFAX sort of why we should consider using different architecture for identity, clearly more positive side of using blockchain for identity management.

And, and this is last year's quote to be used. It works, I think for a couple of years, hopefully it can work and there is not gonna be a bigger one. So there is a couple of aspects of blockchain that I just listed and not going to go in probably of them. And then there is a couple of funny aspects of blockchain that can be modified.

And then, and then they're not so much blockchain where they're like, like as mentioned the Estonia system, which is active like a distributed system, but it's actually not a blockchain and is behind the firewalls. Or there is a ripple system, which is a permission system and, and not really public system or there, the accent modifiable blockchain, which is yes. And then, and then there are these other features that are very important to sort of make it into a blockchain. They're the basic three variants. We just keep that because it's probably been mentioned.

And then, so like a core function for blockchain, which is like very important. This is that it's actually shared and all the same data is shared everywhere. So there is this extreme high level of transparency. And when talking about identity, it's actually kind of fearsome that there is such a high level of transparency seen a system, however, first blockchains or first no blockchains of Bitcoin come, came with like a co. Now there are blockchains that are coming with like pure anonymity with the current encryption. Of course.

So Bitcoin, there is, there are ways to actually prove someone's IP address behind the Bitcoin address if it's not properly done, like as of back in the base. And then for example, in today, there is ZC and, and other alternative using zero knowledge proof to sort of create pure anonymity.

And, and these two features of using high level of transparency and using high level of anonymity, or sort of creating a, a solution, which is, can use both according to the standards that are required, the level of transparency that required in the level of anonymity that required. And if you, you can play along these lines very well, then you can create actually solutions that are using the blockchain, but are not using the blockchain for everything because the blockchain is a technology and not your mom who can cook.

So rather than seeing this small service is controlled by a single business, blockchain based data can be disposed. Yeah. Now there is one mistake that there is there shouldn't be blockchain based data. It's very well explained in the previous presentation because it will be actually hacked. It will be breached. Quantum computers are very much coming and, and put potentially mathematical grade proof as well. So blockchain should much more act as a rail and, and point to different locations where data actually stored. It doesn't have to be necessarily one single bot.

It could be multiple places. The level of transparency is basically that these multiple traces can be and has to be equally or significant for you.

Well, however, it doesn't have to be one place. So you can even avoid the problem of losing your wallet or using your one single access point because your government will be still able to prove who you are. Even if you lost your digital ID. I'm an Estonian resident. If I would lose my card today, then the more I can go into Berlin to the Estonian residency, I will get a new card, regardless of whatever happened and I can access my Estonian company whenever I receive my new card. It's not a problem because they are storing my data very well. Facebook is storing my data very well as well.

They never really likely going to be using a, a very nice system, but other companies like smaller companies that are facing GDPR might consider was just using blockchain railing system for consent management. Because, because data sharing is very important. And for small companies, it's going to be a huge struggle for big companies. It's a lot bigger, but changing legacy systems to newest is something that they will have to face.

And, and yeah, it's gonna be rough, but essentially what blockchain can do is that it can, the stations are actually verifications of those ATEST stations. So when I get my Estonia residency card, they do probably the most thorough NYC check out there today, which is available for consumer usage. So essentially I should be able to just use that verification for any other KYC requirements in my life and point to the Estonia government that they actually did their job, and they're doing it every second year, which I'm paying for.

And everyone essentially should accept it because it's a higher level verification than anyone else can actually very much like a higher level than Midwest task can create, but essentially it still doesn't include social media. And it still doesn't include a lot of more information that we are actually creating throughout our digital life, which are the different, the previous presentation to different points in the idea of creating multiple verifiers or testers. So we can still add more trust into the system. Yes. Great quote.

So essentially what we can receive using blockchain and using blockchain as a way for verification is that we can prove a strong ownership. We might not actually store the data on our own device. We might use solutions designed for this purpose might be a government server. It might be a private encrypted cloud, which is designed for GDPR compliance, which is always available, which have the ability to recreate the password.

Yes, you have to prove your identity with an extreme high level, but it can, or it can be a form or it can be a, I don't print out everything, but it can manage multiple ways to prove ownership. Essentially it can be confiscated because it's a constant management and it's not a data storage. So you just prove that where data should, who should have access to what of your, part of your data, which is coming close to how GDP is thinking about consent.

And, and essentially it can be sensored is also deleted by others because then you should receive information that your data that you have can have over just be separated. So sort of the benefits, these are words. I just actually copied out IBM's words because I think it's great. So IBM saying this, but I don't really want to read it out well, because they're, self-explanatory Phillip there is a consumer part I assume. And there is for businesses essentially. IBM is putting it very well. These are the huge benefits that blockchain Porwal actually can bring.

Now, the question from an IBM perspective is that why permission that, because looking back internet started the permission system and then became a permission and network. We, from our side and our company, we very much believe in the public ecosystem and in the creation of the right incentives to run a public ecosystem where actually everyone is incentivized to do what's their role to be a user, to be a minor and to be a, a data manager. And it's all about how the blockchain is actually created and designed to create all these incentives to be maintained and secured.

And essentially, so the title of the whole presentation it's coming to where I want to talk about. So the ver group I did for the initiative, which is ID for development, which is sort of a, a pre-event from ID 2020, it started a two years earlier, created a 12 point guideline, how to help identification in the development work. Essentially this thought point, there are longer experts. I can send the link to their brochure, but essentially these are the most important guidelines, how new identification creation should be focusing on when it comes to helping people in the developing environ.

And, and this is actually very good because this shows that what we were talking about with the technology that can connect safe storages can actually achievable because it doesn't talk about how to do it, how to take down biometric is about that, how to store that given biometric it, doesn't talk about that, what data you should actually capture. It talks about that, how to make the whole system so that it's not misusing someone's identity.

And I think this is a very good way of thinking that it's not the operational design is the actual way of thinking of how the system should be designed from ground up. And it's interesting that it's coming from, from the Burbank and essentially how the sort of current digital identity space from a very blockchain angle seems is that there is gonna be likely one or multiple blockchains blockchain identities that will be creating essentially silos if we don't work together because these identities will be managing data in very or fairly different manners.

And if there are no interoperability models in between these blockchain identities, then we can create cross border silos because then there will be a European identity, but if it's not interoperable with the us identity or the south American, or I don't know, like we can imagine a lot of others, then we run into a very similar problem that we have. Is that what happens if I travel? Because of course, as long as you're living in your own country, actually many of these problems don't come up only on the internet, but like, as we are humans, it is becoming an issue.

But if a Mexican startup lunch in Europe and they're using a different identity pattern, I can't use, I have to use my Facebook. So why do I have this amazing MIS identity? I essentially using my Facebook and just exposing more data or giving more data to Facebook. So there has to be interoperability between all these standards. There is a couple of working rooms, double three CS, working on, on verifiable standards as well as there is a identity foundation who are leading the Anub, the internal to the standard and code base for chain identities to be solved.

If anyone in the room is not yet member of w, C or D I F please come to me and join because we should work on interoperability as soon as possible. And how we can actually reach people with a technology is the ability that we can create solutions, which Canline global aims.

And, and there are many, many people who have none of these benefits that we have, but we have access to technology a lot sooner than we think Ellen Musk just launched last week. The first two satellites that are going to start being internet on the road in 10 years, probably the whole world will be covered with some speed of internet, which means that anyone who receives a two day 40 Euro smartphone will, will be able to access everything in the world.

And we'll be able to, we'll be exposed to all the privacy issues that we have been trying to solve all over the world without having a government ID, without having a toilet, we'll be surfing on the internet without actually a privacy standard. So we have to be working fairly quick because they will have access to the internet and Amazon and Facebook will be pushing to actually us reach them. First. We see that Facebook zero will slow down in India because the internet.org started to create such a opportunity that the internet do org sites was possible to reach for free.

And Facebook was the one side that was possible to reach and Indian government luckily shut down the project. But what if the government is not strong enough or what is the incentive of the government is slightly different? And then we should think about that because it is happening a lot sooner than them not. So essentially we do believe that can do that. Digital identity is a basic human, right?

And, and we should treat it as that. And so what we are doing at the panel, we are essentially focusing on creating a solution for railing digital identities on the blockchain solution, which can enable social and financial inclusion for the long term. And a lot of people will have digital identities just because of the fact that I talk before. So we should start working together and as quick as possible, because it'll be a very big change in many people's life. So thank you very much. I will for questions. So thank you very much.

So do we have any questions reduced everyone to Everyone understands everything. So how, how successful is your, your, your very Sure. So essentially There are two projects that are very important for us in like, can share officially any of them, but I can outline. So we have two angles when it's a very humanitarian to actually help people with identities. And we basically focus on a much more business angle to work with blockchain companies to create, I layers for blockchain.

And we are starting a corporation with a very interesting upcoming blockchain, sorry, where our company will be part of their identity layer as well as actually right. Code into their whole blockchain to use our identity at the lower level as well.

Not only, not only on, on higher levels, but actually to enable really hard to talk about the blockchain, everybody, but, but essentially, so, so our goal there is to create a system which can rail identities between multiple blockchains. So that use the same identity for purposes in let's say Ethereum, as well as in ZC same because it's ZC identity. Nest is the robot, but something to create an interoperability identity in blockchain.

And then the other side is we are starting to work with one of the biggest human rights organizations in creating a fair trade supply chain, where we are actually introducing the same identity system in investor and African country where the internet access and technology access is actually limited where we are actually working at an operational model, how to enable these people to create their first identities, access. These blockchain enable digital identities and use them to create, to receive fair pricing for, for the material they are produce.

And sort of our goal is to prove that the technology can be extremely inclusive. It doesn't matter if which part of the ver you are because the technology is not about who you are or, or what's your background.

It's about the granularity that it can enable an extremely high verification and, and an API call for the Estonia residency and prove that you're extremely verified, but it can just enable that you met with another person who is a verified person, so you can access the service, which is going to be the point because identity is not about how much you verified it, what access you get based on the decision of the service provider of what verification is required. So is this all based around if you were an Estonian citizen identity?

No, I just, we have refrigeration with Tian. Okay. Because it's interesting what you just said, because, you know, it's kind of interesting that you are saying a technology is going to go from a sort of an African country that is certainly not a developed technology right. To blockchain. Is that right? Yeah.

And isn't, isn't there anything intermediate that's useful? Well, if they have more technology, it'll be more secular, but essentially to their identities, most of it can happen in both tech space as well. And what about connectivity is connectivity? It is. And How do you, how do you deal with that? So Blockchain, The blockchain doesn't have connectivity. The blockchain can come in in a way that authentication is present and usable. If it's already in a system, as well as parts of this supply chain do have access to technology.

So then we rely on that part of the technology and start from there, and essentially looking into ways to enable everyone to have technology, because it's, it's an X amount of money that should be deployed in place to have everyone to access technology. And if you look at their social benefit of that deployment, there is a possibility that just were to actually enable everyone to have access to technology. Yeah.

One of the key things for technology taking off is for that to be a clear value proposition for people to, Oh, we know for the people who receive the technology or for it's a surprise, How, how are you going? How is you gonna be paid for? Yeah. So essentially since we are talking about fair trade, the whole goal is to actually raise the prices of everything so that people at the very end can receive money.

So essentially in this case, everything will be probably more expensive and the end users will pay for it because I can't say I have a good example, but, but essentially for, for the very end users of, of these supply chain, basically us wouldn't her to pay one person more. But that one person, one in circles back all the way to Africa, that would be lifestyle change. Yeah. Okay.

I, I kind of understand what you said because people will preferentially buy boots. The are fair, fair trade branded in the belief that what you, what you are saying.

Yes, but essentially our goal is that the company is selling the fair trade, want to buy self, self trade materials because they are the one who makes the decision, what they buy and they can force the rest of the supply chain to provide them with that required material. And if it's factory, then they're gonna buy F probably the higher price, but it should be important for them because users are sensitive, but most data priced. And so by assuring identity this way, are you, are you both interested in preventing fraud or improving quality?

So we are interested in preventing fraud, therefore improving quality, but not material quality, it's life quality. So in, in that project is actually the whole idea to introduce digital signatures on each and every trade where in person has to agree in real life. In real time, on a price we can't prevent at the moment that the money is going to exchange as well as the value of the, of the material, because we are not there, but we can introduce other ways to actually source with a non blockchain related reputation system, potentially, which can prove that some traders are better than others.

And if someone is having a better reputation, then the authorities can actually interrupt and see that there is an actual misuse of, of the system. So in that sense, we can have a lot higher level of transparency about the trade using the blockchain.

And, and by that, we can assure that we have an impact. We want the reduce inequality in a second, but there will be an impact. And if we have five, 10% impact, then hundreds of thousands of people impact. Okay. Okay. So are there any for other questions?

Sorry, wait, wait. Yeah, I think mark had the question. Yeah.

Question, question. Yeah. You you're listing privacy listing privacy is one of the values. Also wondering whether or not publicity might be one of the values. So we seem to, as we were talking about earlier, identity is this thing that we focus on as being close to us and that we keep private, but identity is also this public thing that we market and that others might Facebook and who have been selling.

And I'm wondering if within this context of fair trade identity might be seen on that publicity privacy line as being something, according to the business argument, that could be more valuable as an artifact with publicity, the opposite, really of privacy wondering which you've thought that makes sense. Sure. But like the identity is what we exposed. The prices will be exposed. Transparency will be the supply chain and participation of the, Why not expose the identity. If it helps improve load quality of the producer. One it's very dark there. So it's like, let's go slow. Okay.

Well, thank you very much, Alexei. Thank you very much.