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One of the biggest players in the cryptography industry is experimenting with ways to give their users more control over their personal information.
Cryptographic exchange transformed into a corporate unicorn Coinbase has a team of 17 people who are currently exploring decentralized identity solutions. B Byrne, the product manager of Coinbase's identity team, told CoinDesk that he wants to "help people get more out of who they are online".
Revealed exclusively for CoinDesk, Byrne's approach is based on creating bridges between Coinbase products, such as its mobile wallet, with a decentralized (app) integrated application for decentralized exploration. He explained:
"I'm watching dapps, and which of our customers are using which ones, etc. This is probably a good indicator of what types of activity [our customers] I want to do it in an on-chain way ".
In Byrne's mind, the best way to start is to identify a small segment of Coinbase users who would get real value from checking more personal data, rather than Coinbase collecting and storing information from their know-customer repeatedly (KYC ) through the platform products.
Over the next 12 months, Byrne said that his team is aiming to downsize these experiments from a few users to a "significant group" of first-time users. In addition to tech savvy users, Byrne said that identity solutions could have a more immediate impact on customers who "can not access things because it's too difficult".
Byrne added:
"We think it's an important part of our future and we're thinking about the tools we need to ship for this."
As such, Byrne said his team is talking to projects such as the W3C Credential Community Group. W3C member and encryption veteran Christopher Allen told CoinDesk that the group aims to launch a decentralized identifier working group (DID) in January to recommend standards through the World Wide Web Consortium, based in Massachusetts.
Although Allen is pushing companies like Coinbase to take a more proactive role in these standards-building efforts – arguing that at least 5% of a technology company's budget should be dedicated to community contributions – Byrne said that Coinbase is hesitant because these efforts are still too academic and could distract from the daily priorities of serving customers.
In fact, the vice president of Coinbase for business and corporate development, Emilie Choi, told CoinDesk that there are no plans to delegate part of the $ 300 million E series that Coinbase raised in October to the identity team or related projects Community – apart from perhaps the recruitment of at least three other digital identity experts.
Joseph Weinberg, president of the Shyft data network, told CoinDesk that the entire industry must "understand and formalize the best ways" to standardize patterns of development related to digital identities. Shyft is already working with government agencies in Bermuda and Mauritius to test data and privacy technologies.
"It is also necessary to focus on the part of governance [of development] because these are systems that people work with, "Weinberg said." This is the problem that we're not so good at in our space. "
Experimentation mode
Starting with some users of Coinbase Wallet, the Byrne team hopes to find niche groups that could benefit from partially decentralized identity solutions in specific regulatory settings. The key word here is "partially".
"We want to protect [Coinbase] users and make sure it's really safe, "Byrne said." I spend some time thinking about the Social Security Administration or the DMV [Department of Motor Vehicles]because they are the suppliers of so much identity today ".
Based on their experience in building compliant and international privacy solutions, Shinft & # 39; s Weinberg told CoinDesk that it does not think that decentralized identity solutions will ever allow crypts to swap users to check all their data.
Regardless, Weinberg said that companies can cooperate to give users the right to choose how data is shared. He added:
"I have no problem paying for a service where I know how [identity data] is used."
When it comes to building such systems, Allen, the co-founder of W3C, emphasized the importance of distinguishing authentication – "the relationship between digital data and a real person" – from the authorization – "the ability to do different kinds of things" like buying titles.
Generally, Coinbase's Byrne agrees with this distinction, adding "at this point, there does not seem to be a clear standard on which we have agreed that it solves a problem." He said it would be a strong commitment to Coinbase to be involved with every group that is currently working on their own identity standards.
However, in Weinberg's mind, collaboration could actually make it easier for companies to expand services in all jurisdictions, which is a priority for Coinbase.
For example, if Kraken's cryptographic exchange was already operational in a Caribbean country, then if companies like Coinbase entered the region, they could simply query the international ID network to overlay data instead of relocating users from the beginning.
It takes a village
Although the Byrne team develops identity solutions that reduce the friction between different platforms or increase customer privacy, these solutions will likely be based on existing public tools and protocols as well as Coinbase.
"It's not a zero-sum game at this point," Byrne said. "Regardless of the rules we agree on, maintenance will be essential."
To underline this same point, Allen mentioned the infamous Heartbleed vulnerability that affected different types of open source software in 2014. The chain effect in the technology industry started because only one person was updating the OpenSSL code years after its initial creation. In the end, a critical bug came up.
"I do not want to see that problem replicated in the bitcoin world," Allen said. "I would like customers to say: I do not want to hire a qualified custodian unless you are contributing with the common goods".
In addition, Allen said, official working groups such as what his project for a W3C community intends to become, can create international standards that are cited as authorities by regulators and technologists.
Without commenting on any specific resource or priority, Byrne agreed that Coinbase should be committed to maintaining the infrastructure for future "healthy" solutions. Byrne also expressed curiosity about how Coinbase could one day take a more active role in the community's efforts.
"A failure mode of the identity of the past has tried to conquer it and to possess the identity of all completely, instead of working in standardized ways that decentralize and distribute that power," Byrne said, adding:
"Everyone is still starting."
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