Worked on digital identity for government services in a variety of ways (public and private sector) and its applications in broader society some years ago, here were my findings:
- identity requires the ability to bear risk.
- an identity not blessed by government bears very limited risk.
- the use case for government issued identity is only in enforcement (fines, taxes, service eligibility, etc.)
- The private sector does not need "strong," identity for anything other than credit/collections, for which banking IDs are the legitimate portal to govt identity today. There isn't a consumer driven use case for "strong" identity.
- "strong" identity reduces to being sufficient to target that person with court ordered violence. Everyone talks around it, but that's what they mean.
- an alternative strong identity provider is a de-facto state. (looking at you, FB/AAPL/GOOGL)
The attribute based models are technically interesting, but what we are really talking about is equivalent to financial instruments and securitization of identity.
The quality of any given individual identity assertion can bear up to a certain amount of risk. A tranche of identity assertions can bear even more risk, as the failure of some does not significantly impact the rest of them, and the cost/benefit of accepting the tranche is greater than the projected loss.
Futuristically speaking, the most likely identity technology two decades from now will be a set of collateralized attributes tied to securities, and ones that are asserted as bearing risk up to a certain grade. The rehypothecation or leverage on that identity will be a part of its score, which relying parties will assess and request additional collateral on accordingly. It sounds complicated, but it's not.
What such a "securitized," identity (so-called anonymous ID) breaks is the income tax and other individual enforcement use cases, where transaction taxes are viable, but tying them all back to a single state issued identity becomes unfeasible. The trade off is like the one we're encountering with cryptocurrency today, where it's useful for everything except state approved markets.
What's most likely is that innovation in identity will happen in countries where mature public services that require income taxes are not an impediment. e.g. the way that "developing," countries leapfrogged rich countries on wireless telecoms because they didn't have sunk costs in copper infrastructure, similar countries will leapfrog rich countries on digital identity and commerce because they don't have as much of a sunk cost in a strong government identity-based taxation model. When you look at how taxation works in resource-based (oil) and tourist (island) economies vs. services economies ("on shore"), they have more opportunity to facilitate digital identity services.
Identity is not dead, it's just that identity is not about identity.
- identity requires the ability to bear risk.
- an identity not blessed by government bears very limited risk.
- the use case for government issued identity is only in enforcement (fines, taxes, service eligibility, etc.)
- The private sector does not need "strong," identity for anything other than credit/collections, for which banking IDs are the legitimate portal to govt identity today. There isn't a consumer driven use case for "strong" identity.
- "strong" identity reduces to being sufficient to target that person with court ordered violence. Everyone talks around it, but that's what they mean.
- an alternative strong identity provider is a de-facto state. (looking at you, FB/AAPL/GOOGL)
The attribute based models are technically interesting, but what we are really talking about is equivalent to financial instruments and securitization of identity.
The quality of any given individual identity assertion can bear up to a certain amount of risk. A tranche of identity assertions can bear even more risk, as the failure of some does not significantly impact the rest of them, and the cost/benefit of accepting the tranche is greater than the projected loss.
Futuristically speaking, the most likely identity technology two decades from now will be a set of collateralized attributes tied to securities, and ones that are asserted as bearing risk up to a certain grade. The rehypothecation or leverage on that identity will be a part of its score, which relying parties will assess and request additional collateral on accordingly. It sounds complicated, but it's not.
What such a "securitized," identity (so-called anonymous ID) breaks is the income tax and other individual enforcement use cases, where transaction taxes are viable, but tying them all back to a single state issued identity becomes unfeasible. The trade off is like the one we're encountering with cryptocurrency today, where it's useful for everything except state approved markets.
What's most likely is that innovation in identity will happen in countries where mature public services that require income taxes are not an impediment. e.g. the way that "developing," countries leapfrogged rich countries on wireless telecoms because they didn't have sunk costs in copper infrastructure, similar countries will leapfrog rich countries on digital identity and commerce because they don't have as much of a sunk cost in a strong government identity-based taxation model. When you look at how taxation works in resource-based (oil) and tourist (island) economies vs. services economies ("on shore"), they have more opportunity to facilitate digital identity services.
Identity is not dead, it's just that identity is not about identity.