I went to the DMV last week and the visit unfolded as you’d expect: A lot of filling out paper forms and waiting on wooden benches. The place is a technology time warp and perhaps that’s not a big deal—after all, you only have to go there every 5 years if you want to drive a car.
The trouble is we use our drivers license for many other things, from boarding a plane to entering a bar. Our license is a powerful document that tells the world who we are. And yet, the gatekeeper to this identity system is a goofy motor vehicle agency that has a fetish for clipboards.
That’s why the idea of blockchain for identity is so intriguing. In theory, it will soon be possible to store our personal data on the blockchain, using biometrics to grant access only to those who ask for permission to see it. This could mean a day will come when we no longer need to rely on credit agencies like Equifax to collect and store troves of our personal information. More ambitious visions of identity—backed by the likes of Accenture and Microsoft—envision using blockchain as a way to help refugees and the world’s poor obtain citizenship and immigration records. Best of all, the security features of blockchain could mean hacking and identity theft will become much harder.
All of this sounds wonderful but horribly complicated. That’s because a viable blockchain ID system would entail coordination among not just businesses and individuals, but also governments—which still possess the ultimate authority to define our official identity. Unfortunately, as my trip to DMV underscored, governments are terrible at technology. This means the dream of “self sovereign identity” could be a long way off.
Surprisingly, one person who agrees is Vinny Lingham, who heads the buzzy blockchain ID startup, Civic. In an interview with Fortune, Lingham acknowledged it could take years for government and industry to agree on a common blockchain standard for identity. And while a startup, uPort, has signed up the Swiss city of Zug to implement a blockchain ID system, he says such examples are outlier cases in the same way Estonia is an outlier when it comes to digital government. It will be much harder for blockchain ID to get traction on a larger scale.
“We looked at blockchain voting, and realized it will take any government of a reasonable size years to implement it. We won’t see elections on the blockchain in the U.S. for at least two more cycles,” said Lingham, adding that using blockchain to help the world’s poor is an admirable but mostly out-of-reach idea for now.
Lingham says adoption of blockchain ID systems is instead going to start with more humble projects, such as vending machines and website log-ins. After that it will spread to applications like social media and dating sites, he predicts. In the meantime, though, it’s going to be slow-going.
“It’s a grind to be honest. Every week we’re signing up dozens of users. Hopefully it’ll soon be hundreds or thousands a week,” Lingham said, adding blockchain ID projects need to find daily and weekly use cases to be viable.
The bottom line is blockchain-for-identity is more than a pie-in-the-sky vision but, for the foreseeable future, our driver’s license is going to remain our primary form of ID.
THE LEDGER’S LATEST
The Long View on Crytpo: 3 Questions for Coinbase Alum Nick Tomaino by Jeff John Roberts
Bitcoin, Ethereum and Other Cryptocurrencies Take a Plunge by Chris Morris
41% of Americans Say They Will Never Invest in Cryptocurrency by Lucinda Shen
Coinbase Hires AWS Exec Tim Wagner by Jeff John Roberts
To the moon… Goldman Sachs plans for crypto custody. Shipping gets a blockchain boost. Binance demos its decentralized exchange. Lightning network for Bitcoin is growing fast. Coinbase boosts daily trading limits to $25K. Bitmain talks IPO. Bitcoin is hidden around Washington, DC!
.…Rekt: Cryptocurrency prices go down and down. Tezos class action inches forward, Tim Draper off the hook. Crypto pump and dumps still a thing. Good guy finds a bad security hole in Bitcoin Cash. David Marcus says bye to Coinbase to stick with Facebook mothership.
BALANCING THE LEDGER
The Ledger invited Haydar Haba to the studio to talk about “Silicon Valley Coin.” The Andra Capital CEO made bold predictions about how the token—which offers a new way to hold equity in startups—will change investing. Haba even proposed a “Tesla token” to help the car market go private.
Who you calling volatile? It’s long been a knock on Bitcoin that it’s too volatile to be a mainstream currency or investment. Lately, though, Bitcoin looks stable—at least compared to some fiat currencies. Here’s how prices stack up against $USD in the last 6 months:
Turkish Lira: -43%
Brazilian Real: -16%
Iranian Rial: -63% (black market rate)
MEMES AND MUMBLES
James Altucher won’t go away. The self-proclaimed crypto genius who single-handedly polluted large parts of the web with his banner ads still walks among us. He’s now moderating a “Crypto and Comedy” night and, as @WhalePanda notes, “sadly it’s very real.”
The Ledger will buy a beer to anyone brave enough to sit through the whole thing.
FOMO NO MO’
Don’t miss out: Cryptocurrency might be the hottest thing in tech right now, but it’s just one part of a larger disruptive force known as fin-tech. Matt Harris of Bain Capital Ventures, who has a keen eye for the bigger picture, sees the fin-tech revolution through the lens of 6 different sectors. He broke them down for Fortune, and even assigned each one an energy level:
Payments: Been there, done that
Ten years ago, “fintech” equaled “payments” because Jack Dorsey made payments cool in Silicon Valley. That’s very different now. Payments is a distinct minority of new fintech startups, and early-stage funding has dipped over the past few years. In 2012, about 90 payment companies were founded by my count. In 2017, that number dropped down below 10. Commercial payment companies like Billtrust and AvidXchange are still having a bit of a moment (full disclosure: my team has invested in these firms), but if you follow the trends, you won’t see tons of payment startups this year or going forward. […] Startup energy: Slim to none, all late stage