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Blockchain technology opens up a lot of ways for new companies to disrupt incumbents. Civic (CVC) has stated that it aims to disrupt the identity verification (IDV) industry by using the blockchain to change everything.
Civic is set to offer:
Civic uses blockchain technology to change identity verification. The people using the Civic system will likely fall into one (or more) of three groups.
It should be noted that the system is set up to incentivize all groups to participate in Civic.
For users, Civic states that it aims to provide:
For service providers, Civic seems to want to offer:
For validators, the Civic developers point to:
Once a user’s verified info is safely held on the Civic platform, the following process appears to follow:
This system seems to give users the final word on whether or not their data is verified.
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 allow the confirmation 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.
According to Civic’s design, 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 your first name and another branch for your last name. You can provide the number alone to show that your first name and last name have been accurately verified, or you 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 offers Rootstock smart contract functionality. This will presumably allow Civic the flexibility to expand the range of available features and functions it can offer in the future. For example, individuals will be able to pay CVC to get documents certified by qualified individuals through the platform.
Civic notes that 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 white paper, 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 customers’ identities under KYC laws to the same extent as banks and other financial institutions do.
Buyers who are considering a CVC purchase should consider whether there is enough utility for Civic to grow. 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, but there is still a need for caution.
As an extension of its verification functions, Civic states that other potential applications might include:
Civic is proposing to address 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 more than 21 million US government personnel user identities were stolen in 2015, including names, addresses, Social Security numbers 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.
Civic may have potential and presents itself as being a lot more future-proof than other cryptocurrencies. This comes at a time when the need for reliable decentralized 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. Civic wants to make itself available as an alternative.
Civic should be considered in light of the expectation that the need for IDV will grow rapidly in the future.
This suggests that Civic may be well positioned to grow. It has taken care to build in incentives for existing service providers, validators and users to get on board fast. Buyers should weigh whether this makes it a more reliable purchase than other cryptocurrencies that aim to disrupt existing industries by competing with established services.
Another consideration is that there’s no inflation built into the Civic system. Instead, there’s a set supply limit of 1 billion CVC tokens. As demand for Civic services grows, the value of a CVC token may 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. Buyers need to think about whether this will cause the value of a CVC token to increase. 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.
The only real way to see whether Civic works and can deliver on all its theoretical promises is to see it in action. This is still a long way off.
Civic has potential, but that doesn’t mean it’s going to see exorbitant price rises. Despite the coin’s potential, an ambitious buyer might still prefer to focus on coins with higher opportunity for larger returns.
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