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  • Published on: 14th September 2019
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Financial Services. Banks, hedge funds, insurers, payment processors, and investors. As well as enabling customers (businesses or individuals) to access funds and information while protecting against fraud, the two key considerations for these companies are Anti Money Laundering (AML) and Know Your Customer (KYC). Driven by heavy regulation, KYC and AML represent a significant burden to financial institutions. A recent Thompson Reuters study found that the average bank spends $60 million a year to comply with AML and KYC, with some spending as much as $500 million.27 The opportunity here is to reduce operational burden, operational risk, and increase customer experience— probably all at the same time.

• Background Checks. A cover term for a regulated group of companies that are able to research you and sell on your information in specific use cases, and under the umbrella of federal and state regulation. Background checks are completed primarily for employment, tenant, and volunteer screening, as well as security clearance. The opportunity is to increase reuse, transparency and speed. According to IBISWorld, this is a $2 billion a year industry.28

• Access Management. Also called Identity and Access Management (IAM), this industry allows individuals to access the right things at the right time for the right reasons. This includes software access as well as physical access to places and things. This is one of the fastest growing segments in identity, growing at 14% CAGR, and already at $20 billion a year.29 The industry is led by all the large tech players such as IBM, Microsoft, Hitachi, Oracle, Salesforce, and new entrants like Sailpoint. As IoT increases and technology continues to specialize and fragment, this industry will have tremendous opportunities for disruption.

• Biometrics. Fingerprints, retina scanning, etc.: biometrics moves identity from “what you have” to “who you are.” The global industry is expected to more than triple from $10 billion in 2015 to $33 billion in 2022, driven by increased adoption in banking, healthcare, and government sectors—all of whom are facing increased regulation and data security risks each year.30

• Location Services. Like biometrics, location will play an increased role in identity due the rise of the mobile smart phone. This $10 billion industry has a CAGR of 22.5% and will be $34.8 billion by 2024.31 The opportunity is to link location to core identity on the user's behalf for access management, anti-fraud, and other services.

• Healthcare. Healthcare, perhaps more than any other industry if possible has identity at its core. The problem is that almost everything documented in healthcare is privileged information and as a result is highly sensitive. It's also highly regulated. Healthcare spending is at around 7% of GDP of developed nations. There were over 100 million

27 Thompson Reuters, 2016 Survey, https://www.thomsonreuters.com/en/press-releases/2016/may/thomson-reuters-2016-know-your- customer-surveys.html

28 IBISWorld market report, available at https://www.ibisworld.com/industry-trends/specialized-market-research-reports/advisory-financial- services/other-outsourced-functions/background-check-services.html

29 Orbis market report, available at http://www.orbisresearch.com/reports/index/identity-and-access-management-global-market-outlook-2016- 2022

30 Markets and Markets market report, available at http://www.orbisresearch.com/reports/index/identity-and-access-management-global- market-outlook-2016-2022

31 Berg Insight market report, synopsis available at http://www.gpsbusinessnews.com/Berg-Insight-LBS-Revenue-to-Grow-to-34-8-billion-in- 2020_a5627.html

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records of data breached last year in healthcare, and this is a rapidly increasing the black market for healthcare information. The opportunity to reduce risk, reduce cost, and provide better service is significant.

• Government. Governments have long been the issuer of tamper-proof, trusted, multi-use identity documents. The US government has separate programs at the federal level for Social Security, passports, optional passport cards, and military IDs, and at a state level for birth certificates, drivers' licenses, and voting cards; not to mention security clearances for 5 million Americans and 22 million government employees at all levels that need credentials to do their jobs. Add to this the ever-increasing cost of making things tamper proof and storing data. There are significant opportunities in the governmental arena to leverage new technology and bring clarity and efficiency.

• Customer Identity Management. CIM, not to be confused with IAM (above), is all about the retail customer. This industry comprises targeted marketing, loyalty cards, market research, and commerce in general. Markets and Markets estimates this will be an $18 billion industry in 2019. This industry is tracking very different datapoints to the others listed here, including a much wider use of very small data points for small amounts at a large volume (i.e. everyone that has been to a website in the last week and clicked on a certain product but not bought.) This market is always looking for ways to increase sales and have the clearest cost-benefit use-case for buying individual data.

• Social Media. Although not root identity yet, social media is becoming a significant metrics driven tool in developing identifiable insight on individuals. Creating online personas for use in daily life has become commonplace and enables economic transaction and various other interactions as well. This is particularly valuable in CIM. This industry was worth $26 billion in 2016.32 Projections are that social media consumption will steadily increase in concert with continued global uptake of mobile smart technology.

• IoT. The Internet of Things, or IoT, is a world where devices are connected to an intelligent network, from your refrigerator to your car, to nodes on a power grid, to moisture sensors in every basement in the world. IHS Markit estimate there are already 20 billion connected devices globally, and that this number should rise to 75 billion by 2025. McKinsey estimate this market will be worth $3.7 billion by 2020, up from $900 million last year.33 These devices have an ‘identity,' that can be interacted by humans with the right credentials. Although this is still in the early days, there is massive growth for the identity industry in this area.

 32 Statista, https://www.statista.com/statistics/562397/worldwide-revenue-from-social-media/

33 Forbes, “Roundup Of Internet Of Things Forecasts And Market Estimates, 2016”, https://www.forbes.com/sites/louiscolumbus/2016/11/27/roundup-of-internet-of-things-forecasts-and-market-estimates-2016/

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Self-Sovereign Identity

The average American is becoming a digital serf living in the crypto estates of mighty tech baronies. At best the current model puts individuals at risk to the data practices of others. At worst, it captures every individual to the mercy of powerful multinationals (who can completely monitor them and possibly delete them or take advantage of them). From our perspective the identity system represents massive risks that are becoming more urgent and as such also represents a massive ecosystem with tens of billions of dollars of opportunity.

The vision we are seeking has been described by others as self-sovereign identity (SSID).

What is SSID?

Self-sovereign identity puts individuals back in control of their identities. Although the term is just a few years old, there is growing consensus on the meaning as a system that allows individuals to determine their own identity destinies, rather than being at the mercy of governments, technologies, and corporations.

One of the earliest references to self-sovereign identity comes in 2012 from Moxie Marlinspike, who debates that we have the current identity model backwards. “Administration systems do not give us ‘identity'. Individuals use their IDentity (sic) to administer Society.”34 In provocative language, Marlinspike claims that the current model forces citizens to be “dogs” of the government, instead of the government answering to the people. Self-sovereign authority, he says should be “a perfectly accountable legal construct.”

Christopher Allen from Blockstream, in a seminal piece on the path to self-sovereign identity, explains the problem and the solution as a way to protect the individual:

Today, nations and corporations conflate driver's licenses, 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. I think, but I am not.... Self-sovereign identity is the next step beyond user-centric identity, and that means it begins at the same place—The user must be central to the administration of identity. That requires not just the interoperability of a user's identity across multiple locations, with the user's consent, but also true user control of that digital identity, creating user autonomy.35

The Sovrin Foundation, a non-profit leader in SSID established by Evernym, also wrote a detailed white paper on self-sovereign identity in 2016 that is worth reviewing (aptly titled “The Inevitable Rise of Self Sovereign Identity).36 They explain the solution as a “new public utility— precisely what the ‘internet for identity' should be.”

34 The Moxy Tongue, “What is Sovereign Source Authority?”, http://www.moxytongue.com/2012/02/what-is-sovereign-source-authority.html

35 Coindesk, ibid

36 Sovrin, “The Inevitable Rise of Self Sovereign Identity”, https://sovrin.org/wp-content/uploads/2017/06/The-Inevitable-Rise-of-Self-Sovereign- Identity.pdf

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Features of SSID

Self-sovereign identity (SSID) is a concept, rather than a framework, to empower individuals to reclaim their digital and legal personas. In order for SSID to work, there are several features that must be present in any solution. Any self-sovereign identity solution must ensure that the user has complete control of their own data. This model is the opposite of the current data model that underpins most modern business and government models:

1. Access: The user must have complete access to the information and complete control over who else has access (even the network or technology provider should not be able to see anything without the user's permission)

2. Persistence: The identity cannot be turned off by anyone except the owner

3. Mobility: The identity must be transportable—it should be able to go where the user

wants it to go, including hosting and usage. This means agnosticism and significant

leverage for the user

4. Accountability: The owner of the identity must have complete visibility into and

accountability from any technology or service provider that touches any part of their SSID. None of these providers should be able to make decisions that materially affect the owner of the identity without their consent

As Evernym explain: “If anyone other than you can ‘pull the plug' or change the rules for your identity, it isn't self-sovereign, it is siloed–even if it uses ‘blockchain' technology.37”

Benefits of SSID

The implications of SSID are profound. A truly self-sovereign world is one with increased democracy, access, and trust, and creates a more accessible and vibrant global economy.

Democracy. “Of the people, by the people, for the people,” becomes weaker when those in control have complete visibility of the people. Knowledge is the precursor to control in any totalitarian state. If your identity can be altered, deleted, or restricted, by any group, democracy fails as groups or individuals can be excluded from rights, employment, opportunities, or even the ability to participate in the democratic process.

Access. A broader definition of identity can go a long way to reducing financial and market inequality. In a world where we can better articulate and share trust networks, we can provide better opportunities for everyone. The developing economies of the world do not have a money problem, but an access problem. In the past, it has been difficult to share verifiable information in a tamperproof way. In the new model of identity, such verifications can be made about ability, status, and other basic claims across any field of human interest: from employment to initiating a loan, to buying a house, to volunteering for a charity. Additionally, this can break down barriers around who can vouch for information: in the past we have used organizations as assessors and validators of claims. Technology now makes a person to person validation possible on a massive

37 Evernym, https://www.evernym.com/solution/

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scale. It is problematic in many developing systems to apply traditional Western banking models due to lack of records and verifiable information. This means that approximately 2.5 billion people are excluded from the formal economy. Solving this problem would mean a massive boon for the world's economy.

Trust. Our world economy is built on trust. Trust that money has value. Trust that goods and services will perform as advertised. Trust that each worker in the chain will do their part of the work. Trust that employers will pay you after you have worked. Trust that investments will be paid back. As Steve Knack, a senior economist at the world bank found in over a decade of research, reported in Forbes38 : “trust is worth $12.4 trillion dollars a year to the U.S., which is 99.5% of this country's income (2006 figures). If you make $40,000 a year, then $200 is down to hard work and $39,800 is down to trust.” Facilitating people to explain who they are, and vouch for one another through extended, verified, trust networks, will increase commerce universally— in turn accelerating the economy and producing more wealth for everyone.

Fraud. If adopted universally, a SSID platform will significantly reduce identity fraud as we know it. We have come to believe that we are our identity markers. We are not. The value of an identity marker is not in the information itself, but in the validation of that information. In the future, a SSN or a DOB will not be enough to get a loan: the information will require a token from a trusted network to prove that the person who gave you the number is that person. As this adoption increases, the information alone becomes irrelevant: It's no longer important if hackers acquire your, because they can't do anything with it if they are not you. Imagine a world where you have fewer concerns about unauthorized individuals and corporations maliciously using your personal data in a form of an identity or part thereof?

Vibrancy. Currently a lot of your personal data is tracked, but it resides in silos and does not interact with other data about you. Most people resist the lure of putting all their information in one place. If there was a universal data repository that consumers had confidence in (i.e. trusted was secure and self-sovereign), data could be used in more varied and rich use cases to benefit everyone's lives. Imagine combining DNA data with location data, income data, and fast food purchases, for example. This would be incredibly powerful in creating the products, services, and cities of the future to benefit everyone. Additionally, and counter-intuitively, the more data you put into this wallet actually makes you more secure, not less. For example, if your self-sovereign identity wallet is tracking your location, associates, and buying habits, the moment you deviate from the pattern, smart algorithms will immediately know your ID has been cloned, hacked, or you have been physically abducted, and will be able to immediately—in real time—alert you and those you trust. (This is despite a blockchain SSID making the first two extremely difficult.)

Why Now?

Identity has transformed from a personal network to documents to digital—and therefore back to network as in social media. Along the way, many companies have tried to solve the “identity problem,” including titans of industry like Facebook, Google, and Microsoft. Strikingly they have

38 Forbes, “The Economics of Trust”, https://www.forbes.com/2006/09/22/trust-economy-markets-tech_cx_th_06trust_0925harford.html 21

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failed. We believe they have failed because each time they have violated the fundamentals of self-sovereign identity. 39

Microsoft tried with Passport in 1999, Facebook with Connect in 2008. Powerful consortiums also have tried with OpenID (2005), OAuth (2010), and FIDO (2013). Some of these are still in use in specific use cases, but none have become universal.

We believe the central issue of any centralized identity platform is trust. Consumers guard their identities—including the concept of an online identity—fiercely. To provide someone with everything about you, is to give that person complete control over you. No company is that universally loved nor trusted. Any identity platform that does not let you move your identity at will, can turn it off or change the rules at their own pleasure, and has any interest in reading it or selling it, can't be trusted and therefore can't succeed. The question remains in consumers' minds, why is this company collecting my information—for my benefit, or theirs?

A second issue is root identity. We all have multiple identities, i.e. a social network identity or a legal identity (who the government says you are for voting or tax purposes). You can't use your Google+ account to vote, because the government isn't sure who set up the Google account in the first place.

Decentralized, unowned, truly self-sovereign identity, was not technically possible until blockchain, because however good the company, the company were still in charge. In effect they own your digital self.

The Mission

Glyph, at its heart, is not a technology looking for a solution, but has been a mission waiting for technology. Rather than approaching the problem as technologists looking for somewhere to use their invention, we approach the problem as industry experts, using emerging technology to achieve a vision that dates back hundreds of years—that every individual should be in control of their own data, their identity and therefore their destiny. In the next section, we'll talk about how technology allows us to do this now.

 39 Coindesk, “The Path to Self Sovereign Identities”, https://www.coindesk.com/path-self-sovereign-identity/ 22

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Section Two: The Solution

The Ecosystem

Now we have introduced all the necessary background, we are able to more fully dive into the particulars of our solution and approach, which we believe are unique. A recent investigation found over twenty companies tackling the SSID opportunity, or parts of the chain. Although this alarms some, we see the infrastructure that needs to be built as so widespread and so fundamentally different to what is in play today, that there is a need for many strong companies to tackle the problem simultaneously. The main opportunity here is to choose the right part of the emerging ecosystem.

A Self-Sovereign Powered World

A mature SSID industry will be large and diverse. Perhaps a great example of this is the payments industry (which itself is an application to solve identity), with its relative sub-segments of issuers, processors, gateways and card networks. The diagram below shows the “major” players in the traditional credit card industry (a part of the wider payments industry).40

Figure 5: Major Credit Card Processors

There are several segments within this one ecosystem. Each segment has a dozen or more companies worth more than $1 billion, with many on the list worth upwards of $20 billion in market capitalization.

One World Identity explains the identity chain as five major segments, describing the problem sequentially an end to end process from creation to use:41

40 Business Insider, “These are the leading credit card processing companies”, http://www.businessinsider.com/list-credit-card-processing- companies-2016-11

41 OWI, Ibid

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1. Creation—Who are you?

2. Verification—How do you prove who you are?

3. Authentication—How do we know it's still you?

4. Authorization—What do you get once we know it's you?

5. Federation—How can you tell other people it's you?

Looking at the emergence of an end-to-end SSID ecosystem, a lot of emphasis has been put on protocol and blockchain. However, as with payments, there is an entire supply chain that needs to be established to support the new method of proving identity, from creation of a new digital asset, to points of sale. This will provide significant opportunity.

We propose the following high level value chain as a framework for discussion for getting SSID from abstraction into the hands of American consumers on a day to day basis:

Figure 6: SSID Future Ecosystem

  Analytics

Point of Sale Access Management Marketplace Agents and Sharing Infrastructure Storage Initiation

Assessment of the industry and trends in order to improve products, service, efficiency, and security. May include external bodies and investors.

Creation of a network of technology to enable a marketplace. Hardware or software enabled, but analogous to the ubiquitous “Visa accepted here”

Using SSID to access software, physical spaces, and things. B2B point of sale with lower adoption hurdles and more business

A two sided marketplace with defined rules and universal adoption, to enable users and companies to interact

Sharing infrastructure, including the ability to share specific claims, knowledgeless proofs, monetization, and artificial intelligence

The ability to quickly, reliably, and securely access identity information in a way that does not compromise any core SSID tenets

Secure storage of SSID that enables security, control, immutability, and accuracy

The creation of a digit asset, either initially (creation), or by updating previously existing data (additional attestation)

   We see the new ecosystem as being divided into four main areas: identity, platform, market and value add. Almost exclusively, other blockchain enabled SSID companies focus on the technology stack, and do not mention the market stack. We believe this is an oversight, and a tremendous opportunity.

Focus on Market

If we were to draw an analogous ecosystem diagram for the current internet, we would find some similarities. Core technology such as protocols, routers, servers, and networks, (the technology) empowering apps, markets, and business solutions which interact more directly with

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Foundational

Application

Level of Abstraction

Identity Platform Market Value Add

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end users (the market). In this model, early players in the technology later found themselves in a highly commoditized space. (Although it's not a perfect example, compare Cisco, largely an infrastructure company, with a market cap today of $165 billion, and Amazon, a marketplace, with a market cap today approaching $500 billion. Clearly both have value and huge success, both in highly competitive markets where neither have a monopoly on IP).

This analogy is important because, for SSID to work, like the internet, it must also be free for the individual. The technology layers, although compelling, must provide SSID with zero lock in to survive and thrive. If consumers believe that they are being monitored, locked in, or railroaded into certain uses, they will switch to another provider, creating a commodity-like market once technology adoption matures among all players.

We believe this will result in three early approaches to creating SSID solutions, as early companies tackle the enormous opportunity and problem.

1. Create pseudo SSID

2. Focus on network

3. Focus on market

Pseudo SSID: In this model, the company creates an SSID network, but ‘owns' the identities by locking them into their solution. The network is capable of SSID, but the permissioned blockchain layer is owned by the company, so the data is not exportable or truly sovereign. This is akin to creating a walled garden, where everything consumers need is inside, but they can never leave. Anything the user builds inside the garden is owned by the landowner. Perhaps in time, the walls are taken down, once the community is self-sustaining—but whether this happens, and the timing, is chosen by the company.

Network: Give away the first two layers of technology, in order to make money on the agent and sharing layer. In this way, the storage and control of the data is truly self-sovereign. The value is created in how that identity can be used, as this is an area where first mover and strong IP advantage can translate into significant market share. (There is also a belief that controlling huge amounts of how, also translate to where the system can be used.) This is akin to an open source technology model, where the company provides the core for free, and makes considerable returns at much larger scale, for the last layer of value.

Market: This model supposes that the greater value is in controlling the end user, than concentrating on protocols. There is more value in where the data is used than how it got there. An example of this is AOL, who created no internet and built no infrastructure outside of its CD— a portal for normal Americans to access the new technology of the internet. A market solution builds a place for everyday Americans to access their SSIDs and use them on the day to day market. Interestingly, at the time of writing, we are aware of zero SSID companies tackling this approach—which we believe is the most valuable, and which we are also best positioned to tackle.

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The Case for MORE Competition

The internet is free. It provides untold value, so much so that the UN declared it a Human Right in 2011. Early attempts to control it were met with excitement, but long term failure, because it was uncontrollable. Likewise, we believe that in the coming years SSID will be declared a Human Right for its ability to enable all people to self-determine their own lives. In this model, there will be an entire ecosystem created, akin to the payments system described earlier.

For SSID to work, there must be multiple providers. Consumers must be free to take it wherever it works for them. If there is no trust, it will not work. Imagine using a credit card where there is only one provider. The market is actually stronger because Visa, MasterCard, American Express, and others all compete side by side. You can use all of them in all the same places. They all do basically the same thing. But all have value. Consumers don't overly think about which one they are using, but they receive extra benefit because all compete. Meanwhile the market capitalization of the big three credit card companies range from $80 billion to $300 billion.

Meanwhile, on the market side, companies like Amazon, who manufacture nothing, don't own the internet, are not the only place for people to buy things online, somehow own 50% of US online retail. How do they do this? Brand, convenience, scale, user experience.

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Focused Adoption Model

We are focused on building a marketplace for identity data that provides architecture, incentives, and applications under one roof for any kind of identity information. This is a partnership model, anchored by strong relationships already in place. We will provide a user experience and convenience the same way Amazon Marketplace provides a user experience for physical goods without owning any of the individual stores. Another analogy is that we want to help companies access blockchain identity resources same way Ethereum has helped companies access blockchain investment.

We believe we will win the adoption battle through our existing relationships, outstanding user experience, incentives built into the core model for individuals and companies to participate, and a growing network effect.

Relationships

In order to build a two-sided marketplace, it helps if you first have a significant portion of one side of the market. Through our existing relationships, we have the potential to put tens of millions of identities into a blockchain identity marketplace every year (see p29). Our strategy is built on how to engage other companies with identity products that can be added to the platform—this ethos goes into our design, business model, partnerships, communications, product, even our company culture.

Figure 7: Building a Two-Sided Marketplace

User Experience

According to Thomson-Reuters,42 14% of applicants abandon an application process for an account at a financial institution due to poor experience. On the web, visit-to-lead conversions can be 400% higher on sites with “superior customer experience.”43 Our prototype has met with

42 Ibid.

43 Forrester Research, https://www.forrester.com/report/The+Six+Steps+For+Justifying+Better+UX/-/E-RES117708

 Phase 1: bring one side of the market to the marketplace in disproportionate numbers. Glyph will bring millions of users to a market with only 1- 2 applications. Possible if you have a captive audience of either side of the market (zero acquisition cost).

Phase 2: use the disproportionality to attract the other side of the market. Once millions of users are in the marketplace for one solution, it becomes very easy to attract other vendors to the marketplace as the business case is clear. Phase two is a focus on B2B sales to attract vendors.

Phase 3: fill out the marketplace. Now both sides are growing in size and have clear value propositions, continue to scale both.

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unanimous praise for its user experience. On top of this, our sign-on process has less than half the steps of other's processes, and contains almost zero data entry. We believe it's important and possible to not just turn a chore from a negative experience to a bearable one, but to make it enjoyable. Once people have been through our sign-on process, they want to do it again.

Figure 13: Adoption Model

 Others' Models

Cost $100s per person in advertising & PR Takes personal time and tech investment Glyph Model

In order to see your own info which is already there: sticky, tantalizing, interesting All verified information is prepopulated

    Hear about SSI, or feel a need

Receive email from trusted source

Hear about a specific company

Download the APP

Put in information

Have info verified

Use the app to verify identity

    Download the APP

Use the app to verify identity

  Incentives to Participate

By switching the model for data ownership back to the individual, we enable companies to monetize previously inaccessible data that is locked by privacy laws. Companies may not share or monetize a background check, but there are no laws about what an individual can do with their own background check data—nor do we suppose there are likely to be. The Glyph model drives engagement by incentivizing both the data provider (who did the original work) and the data owner (the individual), by paying both when the data is read. This enables the data provider to make higher margins (do the work once and get paid 4 times), and the individual to receive payment also.

Growing Network Effect

It will be important to provide new users with immediate places they can use their identities a second time. For example, if a user has been verified as part of a KYC process for an ICO, they will be in the Glyph app. They should immediately see a list of other ICOs they can participate in without having to re-verify. In other words, 5 more one-click ICOs. This will grow the story around Glyph and drive engagement, provide additional revenue, and encourage more and more partners into the ecosystem.

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Our Competitive Advantage

TazWorks

Glyph has been created through the founders' association with several other significant identity data partners. The first of these is TazWorks, a connector within the background screening industry that is uniquely positioned to execute on the vision of Glyph. It arose from a frustration that recipients of background checks could not use their background check for another purpose because the data is not owned by the individual and not sharable due to regulation.

Glyph have a perpetual license agreement to integrate with the TazWorks platform to provide CRAs with blockchain identity solutions.

TazWorks is a data connector, connecting some 360 CRAs (and growing about 15% a year) to 30 data sources (representing federal, state, and county court records, state DMVs, Social Security Administration, etc.). These CRAs use the TazWorks system to conduct over 800,000 record searches a month and are on track to break a million searches a month by spring 2018. In addition, TazWorks enables CRAs to connect to hundreds of HR Information Systems (HRIS), Applicant Tracking Systems (ATS), and Property Management Systems (PMS).

Switching the CRA Model

In the current model, the CRA conducts the background check and provides the information to the employer, with a copy to the individual. Currently, the widely accepted best way to furnish this to the individual is to print a copy of the findings and mail it to them. Glyph gives the CRA a mechanism to provide the information in a more secure manner to the applicant that is safe, tamperproof, and instant.

Figure 8: A SSID Powered Backround Check

 A: Current Model

CRA B: Future Model

CRA

Employer

Applicant

Applicant

Employers

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In the new model, once the individual has their report, they are able to share it with anyone they wish, without fear that they tampered with it. This removes waste, duplication, and frustration (often background checks are long affairs that delay potential employees from starting new roles—frustrating for both the employer and employee once the match is agreed). The net outcome is a process that is highly beneficial to the applicant and the employer.

Consumer Copy

One point worth highlighting here is that CRAs are required by law to provide a copy of the completed background check to the applicant. This is called the consumer copy. Currently this is printed and mailed. It would be cheaper and faster to share the information in an electronically secure way, such as via a blockchain-powered SSID solution.

At Glyph, we have the ability to provide millions of unique individuals a verifiable SSID a year at zero cost. This SSID will be fully populated, from a reputable, regulated source, this is extremely powerful and trustworthy.

Model Implications

As we reverse some of the fundamentals in the value chain for background checks, we have the ability to provide new incentives for CRAs. Traditionally, CRAs are paid one time for work completed. In a SSID world where blockchain stores ID data, the CRAs will be able to be paid every time that information is used. So, initially less screenings might be performed but this will correct and develop into exponential growth of screenings as individuals regularly initiate checks to keep their SSID ‘fresh' or current resulting in a more ‘valuable' SSID in the proposed marketplace. The ability to use a check multiple times splits the payment for the first time from creation, and allows the asset to continue to be monetized.

There are a few developments in the CRA's world that make this new model attractive. Firstly, in the long run, their job will be much reduced no matter what they do. SSID will ensure that most data points, such as birth certificates and social security numbers, are already loaded onto a blockchain by others, which will mean the CRAs have less to check. There are several data points that will always need to be checked for recency. For example, a criminal background check, or a driver's license check, or a credit check, will all need to be completed regularly and especially at the time of decision, so the CRA role will never completely go away as some have imagined, but it will morph.

This new model will turn CRAs into verifiers of claims, and give them a significant role in the new ecosystem. Other SSID models concern themselves with who can verify the data, and many have users put in their own information, which is later verified at point of use. At Glyph we have the perfect population to act as wardens in a SSID ecosystem, the CRAs. CRAs are independent, knowledgeable and highly regulated. We are proposing a model in which individuals are not able to put their own information into the system—which according to our current understanding is unique. The great value of the SSID provided by Glyph is that it has been moderated and verified

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GLYPH CONFIDENTIAL & PROPRIETARY

by a CRA who is governed by federal law and regulation and will upload the information on the individual consumer's behalf.

We predict the system will change from a transactional model, to a more stable monitoring model. CRAs will be paid not just for one background check every 3 or 4 years for a new employee, but will be paid monthly for monitoring services to keep certain pieces of data updated. In order to understand why this will happen, it's important to understand the new cashflow model of a SSID platform.

New Cashflow

A central tenet of any SSID model is that the user should be able to benefit from the monetization of their own data. After all, the information is theirs—the only thing stopping them from monetizing is a mechanism to do so. Blockchain is that mechanism.

We foresee a world where an individual's SSID contains numerous datapoints, each one tagged by who put it in, and when, which can be monetized on aggregate, or individually. A simplified table of such data could look something like this:

    Field:

    Value:

   Input By:

    Date Updated:

   Legal Name

   John Doe

  Fantastic CRA

   1 June 2018

   DOB

   4 July 2001

  Fantastic CRA

   1 June 2018

   SSN

    111-22-3333

    Fantastic CRA

    1 June 2018

    Clean Driver's License

 Yes

 CRAs-R-Us

 17 October 2020

   Clean Federal Courts

   No (+ Details)

  LegalAddict CRA

   5 May 2019

   Current Address

    123 Default Street

   CRAs-R-Us

   17 October 2020

 In this example, John Doe has six datapoints in his SSID. In reality, this will be as large and as varied as the market requires, and could include positional data, health data etc. What's interesting is that this data appears to have been updated on 3 separate occasions. Fantastic CRA appears to have done an initial background check in June 2018, which may have pulled all 6 datapoints. This was updated later by CRAs-R-Us in October 2020 to recheck the status of Joe's driver's license, and May 2019 LegalAddict CRA checked his criminal history up to that point.

If Joe had a marketplace to monetize this data, each field would have its own value, derived by the market. Fantastic CRA, because they were the first CRA, and his name and DOB have not changed, will likely receive a small residual payment every time his name and DOB fields are read by a third party. If his federal court history is also required, LegalAddict will also receive a payment for having most recently updated that information. So, for example, if Joe was able to sell his background check to a new employer, the math could go something like this:

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GLYPH CONFIDENTIAL & PROPRIETARY

Party

Old Model

New Model

Employer

Pays $50

Pays $50

Employee44

Receives $25

NewCRA

Receives $50 ($20 profit after redoing all the work)

Fantastic CRA

Receives $7 for core information

LegalAddict CRA

Receives $15 for recent court background check

Glyph and Tech Partners

Receives $3 for empowering the network

 Although these automatic micro-transactions were previously impractical, they are exactly what blockchain was designed to do.

Value to Everyone in the Chain

This all sounds very nice in theory, but why are each group incentivized to participate in the new ecosystem:

• Employers. Already have an established business case to conduct background checks. The new system provides speed. A typical background check can extend the recruiting time by two weeks. This process is instant. It allows employers to provide a slick and competent hiring process, which is vital in attracting the best talent. In the long run when adoption reaches a critical mass, adoption of the system will be forced as a price of business because employees will quickly be able to compare companies that do this, with those that do not. This SSID can also be leveraged multiple places in the workplace.

• Individuals. Much has been said about this already. Control. Self determination. The ability to monetize your own data.

• CRAs. Early adopters will be heavily incentivized to offer new services to their customers and earn additional revenue. Over time, their model moves from a high volume, volatile, transactional model, to a more stable, higher margin monitoring and support business.

• Glyph. Receive a percentage of transaction fees in order to power the network and marketplace.

Marketplace

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