cool so thanks for joining me here today
I'm going to be talking about
decentralized identity and reputation so
first of all I'm Sina I was previously
the engineering lead at Rubin a project
for a scaling computation on Assyria
also helps launch this project called
eath prize where we interviewed over a
hundred engineers around the space to
pinpoint shared problems around
development you know like deploying a
test net or doing security audits and
helped fund resources towards solving
those problems and more recently I've
been exploring open problems and helping
at the theorem foundations with the
Grants Program so today I'm going to
talk about identity and I think identity
is one of the most important problems
any of us could be working on in the
blockchain space identity plays into a
whole host of things that we're all
excited about so I'm just gonna kind of
talk through a few of them the first is
you know if you if you're familiar with
some of the protocols that are being
built you know that aetherium addresses
are pseudonymous you can create a new
one at zero cost and because of that a
lot of the protocols that exists like
you know Casper live peer for you know
decentralized video streaming true bid
for computation the only way you have of
keeping your participants honest is to
make them deposit some stake and then if
they do something wrong
burning that stake and that by
definition is a one-off game now imagine
if instead of staking eath or some
amount of monetary collateral people had
to stake their reputation and their
persistent identity and if they did
something wrong it was a reputation that
would take a hit this would give us much
stronger guarantees around the space
there's a whole host of application
layer things depend on identity one is
governance you know if you want to do
any kind of quadratic voting you need a
sense of identity on chain lending
relies on identity to be able to
underwrite the loans determine how risky
someone is because you just can't give
money to someone who's an
and could disappear air drops which are
you know means of economic distribution
and bootstrapping networks it's one of
the very interesting like crypto native
primitives that we have having identity
would would help people do these in a
more nuanced way and raid limiting and
pricing so some of the web to services
that we all use and and which are great
you know for example Dropbox make
extensive use of these techniques for
example you know there's freemium models
where as a new user you get free access
to the service or there's tiered usage
models whereas a pro user you get you
get a discount on what you're doing and
you just can't replicate these models on
the blockchain right now and finally the
problem of sampling which is kind of
theoretical but if you if you can
basically pick an address from amongst a
number of addresses and right now you
can't do this because they can be
Sibbald this would change everything
this is basically you know in some way
it's what proof of work and proof of
stake and these various mechanisms are
trying to get at is selecting a leader
or sampling a number of people from a
large pool and even in the real world
we're seeing identity become or digital
identity become more and more important
so the odd power program in India it's a
identity system based on biometrics and
has over 1 billion people using it now
and you can use it to sign up for bank
accounts
take out loans ear esident see an
Estonia of course and you know China's
rolling out this virtual ID which you
know could speak to alternate ways that
we could you know provide a more self
sovereign way of doing this so today I'm
going to talk about what we mean by
identity and reputation and then talk
through some of the nuances through the
lens of three particular applications
governance lending and security tokens
so an identity is basically you know the
atomic actor within the system so if
we're talking about a cerium right now
each a cerium address could be an
identity when you're you know buying a
toke
zero X or Y or you know staking some
eath in a protocol that it's that I
that's the identity and these addresses
can obviously be backed by by a human
being who's controlling the private key
or they could be back or they could be a
smart contract that has interesting
mechanisms around you know different
different spending limits access control
mechanisms and if you know you build up
a history as you engage with the network
through your identity and this speaks to
the importance of being this identity
being secure and why if you have a
multi-sig and you have ways to recover
your keys is it's important and
obviously it plays into the user
experience which a lot of other people
are talking about at this conference the
next kind of part of this that that you
should know about is that this idea of a
claim which is you know you have all
these identities dispersed around the
network and each one of them can claim
something about another one so you can
you can you know identity a can say that
identity B has passed kyc or that
they're you know a resident of this
country or they they have this income
and these could play different it's just
kind of a primitive that you can use
within different applications and you
don't really need to enforce any kind of
authority here any you know any I can
claim something about someone else they
can claim something about someone else
and there's a lot of awesome teams
working on pushing this stuff forward
project like Zeppelin TPL bloom you port
GRC 725 and 735 there's different
architectures you know like storing
these claims in a in a smart contract
registry storing them with the user in a
more self sovereign way and this is kind
of an area of active experimentation and
what do we mean by reputation
reputation is you know when you when one
of these identities kind of builds up
trust over time so it goes from this
state of being just this anonymous you
know a theorem addressed to to an
identity that people can trust and you
can think of this analogously to the
real world so think of you you know just
hearing of
an engineer for the first time who
you've never met before you don't know
anything about them how do you know if
they're any good or if you should you
know work with them
this can happen into one of two ways
really either someone you already trust
goes on out on the limb and it's like no
this person is amazing like and and
through that through their you know
trust you you take a chance on this
person or that that graph of trust isn't
there and instead this person just shows
up and does some good work over time and
through their own good behavior they
build up their reputation so we can use
the same two kinds of ideas on
blockchains so let's talk about
governance a little bit governance is
really important in this space you know
as it comes to decentralized networks
upgrading without you know a central
party making that choice when it comes
to allocating funds and making decisions
as a whole and we can't really replicate
the model that exists in the real world
which is one-person one-vote because
obviously you know you can spin up
multiple addresses and Cybil the system
and so what's been happening so far is
coin voting which is you know you have
the scarce resource which which is the
number of tokens you have or the number
of the amount of eath you have and you
stake this eath and it's your voice in
this vote is determined by how much you
stake and this this works but you know
it has this problem of being plutocratic
which is people with more money get more
voice in the system so this all speaks
to this need for decentralized civil
resistant identity civil resistant
meaning you can't you can't you know one
person can't spin up multiple identities
and it's decentralized meaning it
emerges from the network and this is
this is one of the hardest problems that
exists in the space and I think anyone
who wants to work on interesting
research problems should go and attack
this and I'll just talk through kind of
a thought experiment of how how you can
think about this one one method of
approaching this though
no system has been built they fully
achieves this so think that there is
some protocol let's say you know one of
my favorites zero X wants to upgrade
their contracts this is you know a
couple like sometime in the future and
the system is fully decentralized and
they want the network to vote on whether
you know this change happens or how it
happens and one one way you could do
this instead of doing the coin voting is
you could just announce that any theorem
address who wants to have an input on
this we're just going to airdrop
a hundred you know vote tokens onto them
and so you just give this to everyone on
the network and obviously you can't just
like you have these people to vote with
these tokens because it would be civil
but what happens instead is there's a
campaigning period where anyone can you
know use the existing social channels to
campaign for their voice to be heard so
you know the core 0x team people in the
community developer is anonymous you
know reddit commenter is everyone would
make their case for why why they should
have an input into this and you know
they would list their aetherium address
next to their name and during this month
of campaigning you go and allocate your
vote tokens between all these other
people and whatever proportions that you
want and now once the month is over you
take the vote so everyone just cast
their vote once but instead of counting
each vote as equal or equal to the
number of tokens they had instead you
know the naive way would be how many
vote tokens that they get allocated to
them by the community which would
already be pretty interesting but what
you could do is actually run PageRank on
this which is you know google's
algorithm for ranking websites so you
would say you know this person you know
person X received all these vote tokens
to them so they're their voice obviously
matters and you can imagine you know
well in a mirror from 0 X receiving all
these vote tokens but then you wouldn't
stop there you would iterate the
algorithm again and you'd be like who
have these people allocated their
limited hundred vote tokens and those
edges themselves have more value
and this wasn't determined by you know
any centralized process it's just a
property of the network people someone
gets a lot of votes from the community
and because of that their own votes
become more important and then you know
in turn that person's votes become more
intense so this this process converges
and is a really interesting idea the
problem is that you know this approach
also can be Sibbald so you can you know
if you have the real trust graph here of
all these people you know allocating
their tokens within the real if your
Mikko system someone could just spin up
a thousand addresses and replicate the
exact same structure on this side and
this is why this is an open problem so
some ideas there are having globally
trusted peers you know maybe like 10 50
or 100 or dresses that kind of everyone
agrees should be trusted and you kind of
start the graph from them and you're
like who do these people across who do
they trust and this has a way of like
bringing the network to grounding the
network another approach is to requiring
a scarce resource to create an edge so
you know you could use those 0x tokens
to to create these edges and that makes
them means that one person just can't
create an infinite number of them and
the final one is you could you could
pattern match from the top down so you
could say that you know these addresses
seem to be trusting themselves within
this cluster but no one from the outside
is trusting them and the next problem is
how do you actually incentivize these
these people to allocate these tokens
correctly so what's what makes you spend
the time and the due diligence to find
out who to give your tokens to and what
prevents you from giving this to just
you know bad actors in the system and
you know there's ideas around using
collateral and requiring people you know
lock up some value that they get back in
time or if these edges actually come to
existence as a byproduct of existing
behavior so a great example of this is
in the web itself where you know Google
didn't go to all these people and tell
them to point to each other so that the
PageRank algorithm could work instead
someone who's building a website
personally just wants to have good links
going out because that means that their
website is more interesting and they get
more traffic and you know they're just
doing that in a selfish way and and that
in turn means that this PageRank can be
built on top of it so there's projects
exploring this encrypted as well like
source cred which is doing it for a
github so this you know this is a really
interesting area to explore and you
should all kind of look into it next
kind of application will look at is
lending so lending you know intuitively
makes sense as a place where we all
should look for applying this blockchain
technology you know it's a global
network you can write code instead of
legal contracts its self enforcing but
then again there's a problem you can't
just extend the line of credit to an
anonymous person because they can
disappear they can take that money and
run
and so there's a few ideas I'll kind of
talk through a spectrum of them here and
my goal is to show that the identity
systems that we build are nuanced and
and relates to what we're trying to
achieve on application layer so
there's existing companies in the web 2
world that give out loans to people
without credit scores and you know they
begin by lending really small amounts so
you know let's say it's a village in
sub-saharan Africa they start by lending
out five dollars a month or until the
loan is paid back and then as this
person builds up reputation they
increase that amount and this is
actually worked you know these are
successful companies actually like
making a difference in the world but the
critical thing is that they all rely on
this person's real-world identity so
they they you know reads there you use
the person's contact list and GPS
location and if they have identity
information and they use these things to
underwrite that person's risk and know
that in the future if this person you
know exits the system that they don't
let them in again so this is how these
systems have been
able to build up trust over time and
that's not really available to us in the
crypto space if we want to build fully
anonymous you know decentralized learned
lending systems and the example of this
kind of was shown and you know earlier
when this awesome company BTC jam which
was doing Bitcoin lending in the
developing world you know a lot of
people were very excited about it but
there was just a lot of exit scams so
people would build up their reputation
by borrowing paying back in time not
defaulting and as soon as this value
would get large enough they would just
run away with the money and then they'd
start over again so how do you solve
that another idea is okay let's not do
this decentralize Anonymous thing let's
do peer-to-peer loans in a user's own
community so in their own village people
trust them socially so so you can do
that and you know that wasn't possible
before either we can use blockchain
technology to enable that there's a few
questions there again more on the social
layer rather than on tech tech tech
technology layer which is you know do
that desert community actually have the
capital to lend like is that a
believable idea and the other one is do
people like to borrow or lend from
people they know you know if you think
about it right now would you take out
you know a loan from your friends or
would you lend to your friends and how
would that impact your personal
relationship so some people you know
there's some research that shows people
actually behave better if you do that
because of the social accountability and
there's there's a bunch of people who
think that you know people would rather
have this relationship with some bank
and not involved or you know have the
separation between the personal and the
financial life so again things that we
need to all think about and you know the
the you know the on the other side of a
continuum is okay it's it's actually not
using the blockchain for peer-to-peer
you know lending for you know building
up reputation we're just using the
blockchain to simplify the payment rails
and make it global and automate you know
the
settlement and you know the case here is
that even the peer-to-peer lending
market places like Lending Club and
prosper and these companies that have
been built over the last ten years even
though their peer to peer most of the
volume comes from institutional
investors and the catch is that if you
talk to these institutions they actually
can't go off of peer to peer claims like
they don't think it's not good enough if
you know 10 a theorem addresses or your
friends in the community say that you
have this income they actually needs to
know that and you know when it comes to
the KYC naml they actually need certify
the authorities to do that so so you
know again it's like you you need to
think about how what the application is
as you design the identity reputation
layer the final thing I wanted to talk
about is security tokens which have been
getting a lot of you know attention
recently and the case makes sense you
know so the idea is that there's all
these real-world illiquid assets like
real estate art private company equity
and you can tokenize them you can open
them to global markets
you know people can people can own
fractional amounts and and you know it
seems like a value add and maybe this
would open up ownership to you know
people who aren't in the US you know
someone could own a piece of an American
company even if they live in Asia or in
Africa so we actually like looked into
this because we were kind of researching
identity broadly and it turns out that
if these issuers are in regulated
countries themselves and because this is
like in the name as a security token the
compliance means that they're actually
on the hook for who buys these tokens so
they need to you know run all the
traditional processes that they would
have to in the real world on the buyers
so you know kyc AML accreditation o fact
list debarment lists and and that's fair
enough
and you know then you think about what
you could really change on the identity
layer and you realize that again
peer-to-peer identity is don't
because this issuer is actually legally
on the hook like they will go to jail if
they if the government realizes that
someone did in half the KYC AML so they
need to rely on certified authorities to
do that and another kind of nuance again
that emerges is so you could you know
you say that you know let's put let's
put the KYC AML self sovereign the user
host them and this is what you know
awesome company like bloom is doing
right now so it's the station's come
from regulated authorities but the user
actually holds them they reveal them
when they want but there's other things
you need to navigate here so the these
providers the K the tester is actually
there incentives are right now you know
if a user is going to buy five different
tokens each of those platforms does the
KYC wants and this like provider like
makes money from that so by putting this
stuff on chain you're actually like
lowering the redundancy so there's a lot
of kind of case-by-case nuances that you
need to navigate and so just wanted to
kind of give some context you know
beyond the key management and the user
experience and these things which are
all really important and we need to work
on to make this stuff viable for people
who aren't you know born in the space
like so they can actually use this stuff
but we need to actually think about what
use cases we're building for and design
with with that in mind from the
architecture layer and that's what I'll
leave you with
[Applause]
yeah we we do say they have about four
minutes to anyone have once to ask a
question okay down there
hello demetria's Pollak knows is safe
let's imagine that you have solved most
of the problems that you you are talking
about in this in this case what would be
the major problems for the adoption of
the decentralized identity decentralized
meaning it's not pegged on the real
world it's emerges from the network
maybe in this case like maybe it depends
on the problems that you were talking
about but in a sense what would be the
adoption barriers for yeah so the
question is what would be the adoption
barriers to an identity system and I
think there's you know you there's
multiple aspects to this one part of it
is you just need to have like a very
compelling use case where people are
coming in and using you know because
this technology still it's it's hard to
use and one thing you notice is that
identity in the web 2 world has always
emerged as a byproduct of an application
that people actually want to use so
there's been attempt to build more self
sovereign identity on web to you know
from 10 15 years ago but eventually what
became people's identity was their email
address because they were just using it
to communicate with everyone it was
their facebook login because you know
everyone had it and people had
originally joins to build relationships
and stay in touch so I think a key part
is actually having use cases that pull
people in and then beyond that it's you
know security so you know having you
know there's a lot of good ideas around
having different keys with different
levels of permissions different key
recovery mechanisms because you just
can't you can't you know lose your
identity and most people aren't gonna
aren't going to like have the level of
understand
the SEC knowledge ease like be able to
do that stuff hands-on and the user
experience so you know even having to
understand you know claims or
transactions or delegation or all these
things need to get abstracted over time
which I think I'm hopeful will happen
given how many great people are working
on in this space but it's all stuff we
need to figure out thank you we're
working in the south sovereign identity
space and would be curious what's your
opinion about the major challenges to
get the the current understanding of
south sovereign identity either the
approach of you port or sovereign or
whoever where do you see the major
challenges to get its owner on a broader
level towards people even here in the
room so basically take take that crowd
and not just the ordinary person yeah if
you like I think this speaks to why it's
important to think of the design
consciously up front so you know if you
let it purely emerge as a byproduct of
the application then you don't really
know what's going to happen you know
all these claims might be on chain and
like it might be you know might complete
lack privacy or you know some the the
dominant service that's getting all the
traction might just store all the
information in a centralized server so
it's good that we're thinking about it
up front I think I mean I've seen some
approaches that are pretty interesting
like again talking to the bloom team
while you're here would be like they
have a pretty interesting go to market
strategy yeah I think is Hughes cases
user experience security it's kind of
things