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Digital identities - how and why we are where we are, what it's proposed we do about it and whether it will work.

The fintech world is at last waking up to the biggest problem facing real-world businesses: how to perform KYC on customers you will never physically meet and who live lives which do not intersect with your own except for one specific purpose - the provision of a service. Of course, being tech-driven, fintechs are looking for a tech solution and they've even got a name for it - Digital Identities. The world is full of "White Papers" but there are no practical applications nearing real-world testing, so far as we can ascertain. It appears that, as in so many cases, people are starting with the tech and trying to make the problem fit it, rather than looking at the problem and trying to build tech around reality, says Nigel Morris-Cotterill.

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**This article has been updated for spelling, grammar and one or two additions or amendments performed to improve clarity.** 11 November 2019.

Allen says

Why do we need this vision now? Governments and companies are sharing an unprecedented amount of information, cross-correlating everything from viewing habits to purchases, to where people are located during the day, to where they sleep at night, and with whom they associate. In addition, as the Third World enters the computer age, digital citizenship is providing Third World residents with greater access to human rights and to the global economy. When properly designed and implemented, self-sovereign identity can offer these benefits while also protecting individuals from the ever-increasing control of those in power, who may not have the best interests of the individual at heart.

Allen argues that identity is not only one's name, but everything about one, including personality. "However, modern society has muddled this concept of identity. Today, nations and corporations conflate [e.g.] driver’s licences, social security cards, and other state-issued credentials with identity; this is problematic because it suggests a person can lose his very identity if a state revokes his credentials or even if he just crosses state borders. " He argues that identity on the internet is both a challenge and an opportunity "The models for on-line identity have advanced through four broad stages since the advent of the Internet: centralised identity, federated identity, user-centric identity and self-sovereign identity."

Questions as to identity on the internet are far from new. In 1999, in a paper called "Use and Abuse of the Internet in Fraud and Money Laundering," I looked at the question of identity on the internet, along with many other relevant topics. I said

The most obvious problem with the internet is that, in Cyberspace, everyone knows your name but no one knows who you are. Anonymity is not merely easy but almost automatic. The internet actually promotes the use of false identity. In this way it is no different to the "Citizen's Band" radio craze of the 1980s. Everyone had a "handle" - a self-chosen nickname. A false name.

That, and related comments were all true and there were some other statements that are important and set context.

"In the USA, the question of regulation [of the internet] has reached a crossroads. Only a few months ago, the main issue on the internet appeared to be driven by fiscal concerns: "will goods and services delivered on the internet be taxed?" .... however, in early 1999, the American concern was over a much more American topic: that of free speech."

Incredibly, today, 20 years later, the taxation position is still being debated in many countries. And the question of free-speech has come to haunt, in particular, American-based platforms.

Both of these questions depend on one simple point: knowing who is who and being able to place obligations on them. That is precisely the same issue as faces anyone who is doing non face-to-face business.

Why do we care? Because we can demonstrate that where we are today is where we were in the 1990s. Nothing has changed.

If the Basel Institute is Big Bertha, then Facebook is Leviathan. In its "white paper" on the proposed crypto-currency Libra, there is this statement: "An additional goal of the association is to develop and promote an open identity standard. We believe that decentralised and portable digital identity is a prerequisite to financial inclusion and competition." It is a puzzle as to why Facebook would have named its plans after the Greek Goddess of Justice (the one atop many court buildings). Reading its objectives, it's not about truth and justice but about what Facebook wants everyone to believe is freedom, in which case it should be spelt Libre. Yes, Libra has had many of its initial supporters depart when the inevitable (and in my view fully justified but not necessarily properly reasoned) backlash started but the objections have not focussed on the unwritten threat in the proposal - and if that threat was not unwritten, but spelled out for all to see, some of its opponents may not have been so vocal or, possibly, opponents at all.

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