Decentralized Identity in an Online World

An emerging issue in the information age is proof-of-personhood (PoP), where a protocol or application must determine whether the agent behind a user account is a living human or a bundle of zeros and ones. This issue has proliferated exponentially over the past few years thanks to the expansion of social media platforms and peer-to-peer (P2P) payment applications. It has become increasingly more difficult to ascertain if an account on a network is actually a real human.

Multiple fake accounts on a P2P platform can be utilized for malicious purposes, such as a Sybil attack, where one actor utilizes multiple fake identities to gain more power in a system. A technologically advanced but not-so-distant future will likely require individuals to pass multiple PoP tests, multiple times a day, to perform simple actions, from logging onto a platform to sending a transaction.

In 2014, Vitalik Buterin proposed the idea of a unique identity system that could utilize blockchain for verifiable PoP. A decentralized, trustless network is a prime candidate for being the backbone infrastructure of a PoP protocol, as verified identities can be issued as an anti-sybil token to prove uniqueness. This could be one killer use case for crypto that enables global adoption, where each identity is tied to a specific good or action, such as online voting or even universal basic income.

While multiple teams, such as Proof of Humanity, have attempted to create a framework, there has been little adoption. Worldcoin, backed by OpenAI’s Sam Altman, recently revealed its attempt at a PoP protocol that utilizes biometric data and zk encryption for account authentication. If Worldcoin is the solution to the Sybil problem, it can improve current systems and unlock new value.

Current Solutions

One primitive solution for PoP is the CAPTCHA, where an individual must solve a visual puzzle to prove personhood on an online account. However, as AI continues to advance, CAPTCHAs may soon lose their effectiveness. Another solution is KYC. While effective, it places private information into the hands of a third party, and data breaches pose a significant risk to one’s personal data. Further, nearly 50% of the global population does not have a verifiable ID to begin with, so KYC as a form of global PoP is unattainable.

Ethereum-native Proof of Humanity relies on video verification to expand its membership base, creating a “web of trust,” where users’ public addresses and identities have all been attested for. After submitting a deposit, a candidate can submit an Ethereum address and a video of themselves making a statement to prove their humanity. The deposit is key because it puts the candidate at risk for monetary loss if proven malicious. Individuals who are already verified then review the video to ensure that the candidate is not a duplicate of another account within the protocol. At any point, verified individuals can challenge suspicious users within the protocol, which triggers an onchain dispute resolution system, where participants vote on whether they believe the challenged user is actually a unique human.