Contents and Ideas
Abstract/One Pager/Summary
The Evolution of Identity
Identity Verification Today – How It's Done
The need for a new identity – The Digital Age
Pain points
Market Analysis
Changing Habits
How people’s changing habits across the world demand a new approach to identity
Rise of privacy concerns / Impact of Privacy
People are more aware of the use and misuse of personal information happening in the world
People really want the governments and the corporates to become accountable for how their personal information is used
People want control — they want to influence who has access to their PII — they want the power back
How the world is responding to the new demand
Blockchain – What it is and How it can help
Benefits of blockchain that can be immediately realized in context of IDV
What is blockchain?
How is blockchain different?
Features of blockchain
Smart Contracts on blockchain – how they can solve the problem (decentralization, no down time, secured, etc)
Privacy on blockchain – Zero-Knowledge-Proofs
VelixID – Trusted Identity Ecosystem
A high-level overview of ecosystem
Velix blockchain and its properties
How Velix works – Use Case
Advantages of Velix over traditional systems
The future – How will it look like
Discuss new use cases that can be enabled
Identity Theft fighting
Hardware loaded with Velix ID SDK
Technical Implementation Details
Merkle Tree
Verification Stamps
Introducing Velix Token – Its Purpose
Privacy on VelixID Blockchain
Alternative usage of tokens
Marketplace of services like background verification checks, remittance services, etc
Team
Conclusion
Blockchain – What it is and How it can help
As we noted above, the primary reason why the disruption in IDV space has not yet happened — is the lack of a tested/proven trust framework on which all institutions, globally, can rely upon for sharing the costs and liability of identity verification.
Blockchain, the decentralized ledger concept, has certain aspects of technology that make it possible to solve the problems faced by various institutions that conduct identity verifications. Smart contracts on the blockchain, also called self-executing contracts, are computer code with an ability to automatically enforce obligations and terms of an agreement without requiring an intermediary — essentially relegating control to a computer to a computer program — a very important requirement for establishing any kind of trust framework with parties who don’t otherwise trust each other. This gives blockchain technology an important advantage for use in IDV industry. The relative advantages of this new technology compared to existing ones are summarized/discussed below.
Infographic —–>
Low-Cost
Immutability
Transparency
Irreversibility
Pseduonymity
Security
Using blockchain technology, Velix.ID is able to decentralize the whole infrastructure in a way that every institution can verify and prove authenticity of transactions of information exchange — recorded on a transaction ledger. By using a certain concept, Velix is also able to provide proof of authenticity of information that has been exchanged without any knowledge of the information itself. As for the privacy of the transacting parties from other users of the service — Velix.ID uses zero-knowledge-proofs for ensuring transactions are anonymous for other users on the blockchain.
Bitcoin
Ethereum
Smart Contracts
dApps
Privacy on Blockchain
Blockchains are a powerful technology, as regular readers of the blog already likely agree. They allow for a large number of interactions to be codified and carried out in a way that greatly increases reliability, removes business and political risks associated with the process being managed by a central entity, and reduces the need for trust. They create a platform on which applications from different companies and even of different types can run together, allowing for extremely efficient and seamless interaction, and leave an audit trail that anyone can check to make sure that everything is being processed correctly.
As seductive as a blockchain’s other advantages are, neither companies or individuals are particularly keen on publishing all of their information onto a public database that can be arbitrarily read without any restrictions by one’s own government, foreign governments, family members, coworkers and business competitors.
The most powerful technology that holds promise in direction is, of course, cryptographically secure obfuscation. In general, obfuscation is a way of turning any program into a “black box” equivalent of the program, in such a way that the program still has the same “internal logic”, and still gives the same outputs for the same inputs, but it’s impossible to determine any other details about how the program works.
Zero-Knowledge Proofs
Zero-knowledge proofs allow a user to construct a mathematical proof that a given program, when executed on some (possibly hidden) input known by the user, has a particular (publicly known) output, without revealing any other information. There are many specialized types of zero-knowledge proofs that are fairly easy to implement; for example, you can think of a digital signature as a kind of zero-knowledge proof showing that you know the value of a private key which, when processed using a standard algorithm, can be converted into a particular public key. ZK-SNARKs, a novel form of zero-knowledge cryptography, on the other hand, allow you to make such a proof for any function.
SNARKs are short for succinct non-interactive arguments of knowledge. In this general setting of so-called interactive protocols, there is a prover and a verifier and the prover wants to convince the verifier about a statement (e.g. that f(x) = y) by exchanging messages. The generally desired properties are that no prover can convince the verifier about a wrong statement (soundness) and there is a certain strategy for the prover to convince the verifier about any true statement (completeness). The individual parts of the acronym have the following meaning:
Succinct: the sizes of the messages are tiny in comparison to the length of the actual computation
Non-interactive: there is no or only little interaction. For zk-SNARKs, there is usually a setup phase and after that a single message from the prover to the verifier. Furthermore, SNARKs often have the so-called “public verifier” property meaning that anyone can verify without interacting anew, which is important for blockchains.
Arguments: the verifier is only protected against computationally limited provers. Provers with enough computational power can create proofs/arguments about wrong statements (Note that with enough computational power, any public-key encryption can be broken). This is also called “computational soundness”, as opposed to “perfect soundness”.
of Knowledge: it is not possible for the prover to construct a proof/argument without knowing a certain so-called witness (for example the address she wants to spend from, the preimage of a hash function or the path to a certain Merkle-tree node).
If you add the zero-knowledge prefix, you also require the property (roughly speaking) that during the interaction, the verifier learns nothing apart from the validity of the statement. The verifier especially does not learn the witness string.
VelixID – Trusted Identity Ecosystem
Overview
VelixID is purporting to become an ecosystem of all stakeholders in the IDV industry — by offering an open, secure, reliable and trusted blockchain smart contract that can become the base of a trust framework subscribable by all the stakeholders — identity verifiers, identity holders, verified identity providers and the verified identity seekers. A bare-bones architecture of such an ecosystem is provided below:
Identity Holders
Anyone and everyone among the ever increasing 7 billion people of the world classify as identity holders in the VelixID ecosystem.
Verified Identity Seekers
Primary examples include banks, financial institutions, telecom service providers, government agencies, etc.
/* Identity Verifiers
Any institution or a business that engages in the process of verification of identity related information of an individual or a business qualifies to be an identity verifier on the VelixID blockchain.
*/
Verified Identity Providers
This is a new class of institutions/businesses VelixID aims to create/add that never existed in the ecosystem for reasons we discussed earlier. This class includes those institutions who have already verified an identity and are now willing to share it with other institutions/businesses/enterprises/individuals who may have a reason to verify that identity for some known purpose.
Velix blockchain and its properties
All stakeholders (identity holders, providers and seekers) are essentially “Users” on the “Velix blockchain” with different roles. Each of them holds a unique VelixID that is assigned to them when they create an account with Velix. The VelixID is a string of alphanumeric characters that contains no information about the user.
It isn’t possible to determine the owner of any particular VelixID via the Velix blockchain. However, any user can prove ownership of a VelixID as the user is in possession of the “private key/password” given at the time of account creation. This is an inherent feature of blockchain that provides first-level of privacy.
The identity holders on the Velix blockchain, i.e., the common people, shall update their personal information on the Velix app like first name, last name, phone number, email, etc. This information is then verified thoroughly by Velix itself by different means such as email verification link, SMS code, Voice based verification, etc. Once verified, users will be able to share this information with anyone including businesses and institutions that require proof of identity. To do so, they simply can share their VelixID or scan the Velix QR code of the requesting party and “Authorize” the sharing using their biometrics.
Velix will never store this information or user’s any private information on the “blockchain”. We believe that user is the sole owner of his/her data and he should be in complete control of when and where is that data is being used or stored. The user’s data shall reside always on the Velix application installed on user’s device (mobile/tablet/desktop), in an encrypted format, viewable using user’s biometrics only and walled within the app’s boundaries so that no other application/software can access or decrypt the information for any fraudulent purpose. Additionally, the data can be backed up to the user’s personal cloud for recoverability in case the device gets lost or stolen. Thus, only the user is in possession of his/her data at all times (whether on device or cloud). Velix will never store user’s PII on their servers or blockchain. All PII stored on user’s device or backed up to the personal cloud will be encrypted following industry best practices.
The verified identity providers on the Velix blockchain will provide the verification stamps for the user’s personal identity information (PII). Whenever a provider will verify the identity of a user who is on Velix blockchain, the provider shall create a “verification stamp” of the information that has been verified and put that on the blockchain. The “verification stamp” is a hash computed on the information and hence, itself will not contain any user’s personal information. While it is possible to re-compute the same hash with the same information, it is virtually impossible to do the reverse due to the nature how hashes work and are computed.
The identity seekers on the Velix blockchain are any institution or an individual that have an economic reason to verify the identities of users on the Velix blockchain. They can save significant amount of time and money by seeking for “verification stamps” from reputed providers, of identities that they need to verify. Such transactions shall be authorized on-the-go by the user. This keeps the user in loop and in control of how and when his/her personal information is being utilized or shared and with whom. Instead of spending hundreds and thousands of dollars and unproductive days and months in verifying the identities traditionally; Velix encourages them to check if users have pre-verified identities on the blockchain. They can save time and money if they find any, by simply purchasing “verification stamps” of pre-verified identities from the “verified identity providers”, s
How Velix works – Use Case
The Trusted Identity Ecosystem enables participation from all stakeholders for the smooth and almost instant process of sharing verified identities among all. We’ll take a simple use case scenario/example to understand how it works. A Velix user wants to signup for a web service that is asking for user’s name, email address, phone number and country code. The original flow looks like this:
Infographic à
User on website -> Fill Form -> Signup -> Check email for verification link -> Click link to verify -> Check mobile for SMS/Call -> Verify using code received -> Signup complete.
Using Velix, this gets reduced to:
Infographic à
User on website -> Signup with Velix -> Scan QR code / Enter VelixID -> Authorize on Velix App -> Signup complete.
Since Velix has already verified the information of the user, the website doesn’t need to do anything of that sort again. Simply by using Velix services, website will be able to request verified information along with a verification stamp from the provider.
Although this looks very similar to what Google and Facebook provide as of today as well; there’s a stark difference in how this will scale in the future. Google and Facebook are merely verified identity providers, both of which have a place in the overall Trusted Identity Ecosystem of Velix. Using Velix, user will be able to provide identity verification from any provider, be it Velix, Google, Facebook, Banks, Telecom providers, or anyone that is listed on Velix blockchain. And the best part – The user is in complete control and knowledge of who has the information and how is it being used. The EXTRA benefit of such a system is that it is a single interface and does not require its users to remember any passwords.
Advantages of Velix over traditional systems
The relative advantages of Velix over traditional systems include:
1) VelixID is global while other systems are limited to one’s nation or a proprietary service
2) Almost instant access to any service globally for a user whose identity is verified with Velix
3) Lowest cost to verify identities globally
4) Users get back control of their personal information – shared only when authorized
5) Users know who has their information
Technical advantages of Velix over traditional implementations include:
1) A decentralized system of storage and computing using blockchain VS a single point of failure
2) Does not store user’s PII on its servers – dis-incentivizing hackers to try sabotaging the ecosystem
3) Transparent – Anyone can see any transaction on the blockchain
4) Provides verifiable authenticity for every transaction on the blockchain
5) Smart contracts govern the behaviour of the system – can’t be influenced into anything
The future – How will it look like
As we had discussed in the earlier sections, the biggest roadblocks to instant access to services and seamless movement of people around the world is the cumbersome and time-consuming process of identity verification. With the introduction of Velix, that can be considered taken care of. So, what’s next? How else is this going to affect our lives? In this section, we speculate how the world may look like once Velix is in full adoption.
[Need contribution from Manav and Balwant]
VelixID SDK for hardware integration
An NFC enabled VelixID physical token as proof of identity can be given to all VelixID users so that they can seamlessly check-in to Hotels and Airports by just providing the physical token as an identity proof anywhere in the world.
Technical Implementation Details
The whole idea and ecosystem of the Velix blockchain relies upon the fact that there are verified identity providers who want to share and monetize their “verification stamps” with their identity seeker counterparts, thereby, reducing time to verify to seconds instead of days and weeks, sometimes months. It is thus, important to understand what are these “verification stamps” and how are they used.
Before we discuss “verification stamps” (better word?), it is customary to understand a very popular concept known as “Merkle Tree” that is very relevant to this discussion.
Merkle Trees
Merkle trees are a fundamental part of what makes blockchains tick. A Merkle tree, in the most general sense, is a way of hashing a large number of “chunks” of data together which relies on splitting the chunks into buckets, where each bucket contains only a few chunks, then taking the hash of each bucket and repeating the same process, continuing to do so until the total number of hashes remaining becomes only one: the root hash.
The most common and simple form of Merkle tree is the binary Merkle tree, where a bucket always consists of two adjacent chunks or hashes; it can be depicted as follows:
So, what is the benefit of this strange kind of hashing algorithm? Why not just concatenate all the chunks together into a single big chunk and use a regular hashing algorithm on that? The answer is that it allows for a neat mechanism known as Merkle proofs:
A Merkle proof consists of a chunk, the root hash of the tree, and the “branch” consisting of all of the hashes going up along the path from the chunk to the root. Someone reading the proof can verify that the hashing, at least for that branch, is consistent going all the way up the tree, and therefore that the given chunk actually is at that position in the tree. The application is simple: suppose that there is a large database, and that the entire contents of the database are stored in a Merkle tree where the root of the Merkle tree is publicly known and trusted (eg. it was digitally signed by enough trusted parties, or there is a lot of proof of work on it). Then, a user who wants to do a key-value lookup on the database (eg. “tell me the object in position 85273”) can ask for a Merkle proof, and upon receiving the proof verify that it is correct, and therefore that the value received actually is at position 85273 in the database with that particular root. It allows a mechanism for authenticating a small amount of data, like a hash, to be extended to also authenticate large databases of potentially unbounded size.
[Needs more explanation in relation with Velix]
Introducing Velix Token – Its Purpose
Velix will introduce its own token (VLX) that shall be primarily used for facilitating all identity related transactions between ecosystem stakeholders on the Velix blockchain. The number of tokens paid in any transaction shall be distributed among the User and Provider, in a ratio as per the defined smart contract of the blockchain. It is through VLX tokens that the verified identity provider shall be rewarded for providing the “verification stamp” to an identity seeker.
VLX shall also be used to incentivize the participation of all users on the Velix blockchain. For example, when an identity seeker wishes to seek identity information of a Velix user on the blockchain; he/she is required to pay a number of VLX tokens equivalent to those specified by the provider as his cost. Most of it goes to the provider, a small part of it goes to Velix as transaction fee and a similar part of it goes to the User who has provided the information as an incentive for participation.
Velix believes that the ecosystem will develop such that many identity-related product and service providers will start providing services to Ecosystem users in exchange for VLX tokens.
Also, directly through Velix interfaces, specially designed for users, it shall be possible to purchase such products and services using VLX tokens. Velix users who own VLX tokens shall take benefit of such facility to spend their acquired tokens for useful products and services.
Why VLX tokens only? Why not existing tokens?
There are significant benefits of having one’s own token on its blockchain than trying to use a public currency like Bitcoin for transactions. Some of them include:
1) Using one’s own token enables fast and automatic settlements within a smart contract
2) It is easy to move digital assets/information among the Users of the blockchain as no exchanges will be involved in the process
3) A blockchain token can be used across all jurisdictions
4) Own token is protected from volatile nature of other tokens
5) It becomes very simple to reward participation in a fixed number of tokens.
VLX tokens will be fixed in number when created during the token sale. There will not be any mechanism in the smart contract to create more tokens in the future. These tokens will follow the ERC20 standard.
Privacy on VelixID Blockchain
[A Zero-Knowledge Proof implementation diagram and its steps – from Balwant]
Velix takes privacy very seriously. The whole purpose of the existence of Velix is to give users control over how and when their information is being utilized. More importantly, Velix also has to ensure that nobody other than the transacting parties should be able to figure out who transacted with whom; so as to save the Velix Users from any kind of spam in the future; should a malicious actor get to know the identity behind a Velix ID.
Velix uses one of the most modern concepts of privacy on blockchain, known as zero-knowledge-proofs to guarantee that.
Alternative usage of tokens
Velix intends to give users the ability to use VLX tokens outside of the Velix ecosystem so as to ensure liquidity for the token holders. Velix plans to offer 2 such ways for users as explained below:
1) Convert VLX to BTC/altcoin via an exchange
2) Redeem VXL tokens for astonishing deals on a marketplace designed especially for this purpose
Team