Blockchain technology opens up a lot of ways for new companies to disrupt incumbents. Civic (CVC) aims to disrupt the identity verification (IDV) industry by using the blockchain to change everything.
Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific
provider, service or offering. It is not a recommendation to trade.
What Civic aims to do
Civic is set to offer:
- Much cheaper IDV
- Much faster IDV
- Much more reliable IDV that can be securely authenticated
- Much safer storage of personal information
- A way for people to anonymously get their information verified without actually providing the information itself.
- A system that lets users control and check off on verifications in real time as they’re requested
- A system that actually pays users for getting their identity verified, and pays institutions for providing the relevant verification information.
- A way for individual data types get reliably verified without exposing unwanted information. For example, safely verifying age alone without revealing any other information.
Where to buy Civic (CVC) in Hong Kong
How does Civic work?
Civic uses blockchain technology to change identity verification. The people using the Civic system will fall into one (or more) of three groups.
- Service providers. These are the people who want to verify someone’s details by paying for the service in CVC.
- Validators. These are the institutions that hold verified user information, such as banks that have previously paid for verification, or third party IDV services. They can sell this information to the Civic platform in order to recoup previous costs, or offer their IDV services through the Civic platform.
- Users. These are the people who want to get their identity verified. It might be whenever they need to prove they’re at least 18, want to open a bank account or anything else. A set portion of the CVC paid for verification goes to the user.
The system is set up to incentivise all groups to participate in Civic.
- A quicker way of getting verified so they can access the services they want faster
- A much safer way of storing and verifying their confidential information
- A way of profiting slightly from using the platform
For service providers:
- A much cheaper and quicker way to verify their customer info
- A much safer way of doing things, eliminating the risks involved in taking and storing confidential customer information.
- A way of profiting from or recouping the costs of previously verified information, plus getting the same advantages as service providers where needed.
Once a user’s verified info is safely held on the Civic platform:
- Organisations request customer ID. This sends a custom QR code to that user’s civic app.
- The user unlocks their phone with its existing security, and then unlocks the Civic app through biometrics.
- The user can check the ID verification request, including the exact information being requested and who’s doing the requesting. The user can then choose whether to accept or deny the request for information.
This system gives users the final word on whether or not their data is verified.
Anonymity, safety and functionality
The blockchain lets Civic verify user information without actually revealing that information.
For example, a user might confirm their full name, address, date of birth, phone number, social security number and credit score to a company, without actually giving the company any of that information.
Instead, that particular user can simply get it confirmed that all of the information has previously been verified and securely stored on the Civic platform. This can be done with 100% certainty thanks to smart contracts on the tamper-proof and immutable blockchain.
Essentially, a company can simply confirm that all of the information has been provided and verified to the required industry standard, without actually needing to take or check it themselves. This saves the company the headache of needing to operate within an entirely separate industry standard for the management and storage of sensitive customer information.
In simple terms, each piece of customer information on the Civic platform is stored in a kind of tree format. The trunk of the tree is a unique identifying number, while each piece of information itself is a branch of the tree.
For example, you might have a number at the tree trunk, then a branch for the user’s first name, and another branch for their last name.
You can provide the number alone to show that your first name and last name has been accurately verified, or might choose to provide the number and only your first name. Or you can provide the whole tree, or multiple trees, if needed.
The trunk alone is enough for a service to confirm user information in line with industry standards. The blockchain can show the full history of that tree, how it was verified, that the trunk matches the branches, and whether any of the details have been tampered with or changed at any point.
Civic’s evolving approach to IDV
Civic offers Rootstock smart contract functionality, allowing it the flexibility to expand the range of available features and functions it can offer in future. For example, individuals will be able to pay CVC to get documents certified by qualified individuals through the platform.
With Civic, someone will only need to get each piece of data verified once. After that, it can be held securely on the Civic platform for future use.
According to the Civic whitepaper, it usually costs around $15 to $20 to verify the identity of a single person in line with “know your customer (KYC)” laws. Businesses can also choose to do it themselves, but it can be a significant strain on resources.
Under the existing system, the same person will need to get the same details verified over and over again, at a cost to both themselves and the institution. These verified details are then held in a vulnerable and unencrypted form, in multiple places at multiple institutions.
In an efficient blockchain ecosystem, there should be no reason for anyone to need the same details verified more than once, or for such sensitive information to be held in multiple vulnerable locations, in vulnerable formats.
Anyone who’s bought cryptocurrency has probably become quite familiar with this. It can take weeks to finally get verified before you can start buying cryptocurrency, and each new exchange will need to undertake its own brand new, lengthy verification process. And then by getting verified in multiple places you’ve also multiplied your risk of having personal information stolen.
There are some ways to buy cryptocurrency with no verification, but they can be inconvenient and limited.
This is because cryptocurrency services are usually required to verify their customer’s identities under KYC laws, to the same extent as banks and other financial institutions do.
Even in cryptocurrency alone, there might be enough utility for Civic to quickly take off. Some exchanges and initial coin offerings (ICOs) have already shown interest in Civic as a much faster, easier and more cost-effective way of verifying customers.
Other Civic applications
As an extension of its verification functions, other potential applications might include:
- Proof of identity for voters. This might offer an exceptionally effective way of preventing election fraud.
- Communication of sensitive information. Medical records, credit scores and other data all need to be checked, yet kept securely. Companies will be able to get the answers they need more quickly and cheaply, and can avoid the risk of facing penalties for improper data storage.
- An easy way to avoid cases of mistaken identity. An unknown number of people end up being arrested because someone who looks like them committed a crime. Unless their doppelganger is found, most of them probably end up taking plea bargains or serving sentences for a crime they didn’t commit. Civic has the potential to keep countless innocent people out of jail.
- Facilitating economic inclusion. Many Americans have been denied access to services due to inadequate proof of, or mistaken, identity. The high cost of getting identification, and having it verified as often as needed, excludes hundreds of millions of people from full economic involvement and this contributes to the cycle of inequality.
- Safekeeping of sensitive information. For example, a company might choose to keep employee records on Civic as a low-risk and cost-effective third-party service, rather than store it in their own databases.
- Registry of citizens. It’s estimated that millions of people, especially young children in developing countries, have no record of existence. Without being in the system somewhere, there are future generations who will inevitably be excluded from their country’s financial, educational and other systems. Civic can present a cost-effective top-down way of solving this problem at the source.
- Facilitating communication between related entities. Different branches of government could be connected securely. For example, letting a healthcare department reliably pass a user’s medical information onto the welfare department might quickly help to identify malingerers.
What Civic can contribute in terms of security
Civic is addressing the need for an extra layer of security for personal information. Its latest whitepaper reports that, globally, almost 1.1 billion identities were stolen in 2016 alone, roughly twice as many as were stolen in 2015. And the black market for personal information is thriving.
Recent years have been marked with frequent high-profile breaches of user information. In many cases, individuals will have different types of data stolen from different places, which can then be put together.
For example, the 2017 Civic whitepaper notes that over 21 million US Government personnel user identities were stolen in 2015, including names, addresses, social security number and fingerprints. The same victims might then have had their bank account details or credit card numbers stolen from a commercial service, such as in the hack of more than 57 million Uber customers that was widely reported in the news in November 2017.
When the same person has personal data stolen from multiple places it can add up to be enough for a person’s identity to be stolen, their passwords changed or their finances accessed.
The risk of identity theft is growing dramatically, but requiring verification and storage of identity information on the blockchain might be one of the most effective ways of turning it around.
Should I buy Civic CVC?
Civic has an enormous amount of potential, and might be a lot more future-proof than other cryptocurrencies. The need for a reliable decentralised, yet centrally accessible proof of identity and verification service is growing rapidly.
Existing IDV systems are already distinctly outdated and strikingly inefficient, so they probably won’t be able to go too much further when there’s an alternative like Civic available.
The need for IDV can also be expected to grow rapidly in the future.
- There are simply more people. Institutions will need to find ways to verify identity faster going forwards.
- Individuals are increasingly likely to switch banks, jobs, energy companies, move countries and much more. This drives the significantly increasing demand for IDV.
- Regulations are getting more stringent, increasing the time taken to onboard and process the average customer.
This suggests that Civic is well-positioned to enjoy immense growth. It’s also taken care to build in incentives for existing service providers, validators and users to get on board fast, so it might be a more reliable investment than other cryptocurrencies which aim to disrupt existing industries by competing with established services.
There’s no inflation built into the system either. Instead it’s a set supply limit of 1 billion CVC tokens. As demand for Civic services grows, the value of a CVC token will naturally increase as well.
Validators can continue to set their own fees in CVC, and service providers can keep deciding for themselves whether they can save money with CVC instead of sticking with their existing providers. This suggests that the value of a CVC token has plenty of room for growth.
However, the value of the token is directly tied to a service, rather than just market movements, so its growth might be more limited than what people have come to expect from cryptocurrencies like bitcoin.
Also, the only real way to see whether it actually works and can deliver on all its theoretical promises is to see it in action. This is still a long way off.
Civic has an enormous amount of potential, but that doesn’t mean it’s going to see exorbitant price rises. Despite the coin’s potential, an ambitious investor might still prefer to focus on coins with higher potential for larger returns.
Disclaimer: Cryptocurrencies are speculative, complex and involve significant risks – they are highly
volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of
future performance. Consider your own circumstances, and obtain your own advice, before relying on this information.
You should also verify the nature of any product or service (including its legal status and relevant regulatory
requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may
have holdings in the cryptocurrencies discussed.