With the bitcoin growth remaining fairly slow, it is interesting to see that applications are trying to see how they can make use of the technology sustaining the bitcoin, the blockchain.
By 2016, the market for smartphone users is forecasted to be 2 Billion consumers worldwide (eMarketer) and according to StatCounter, the number of mobile phones being used to have access to Internet increased by 67% over the last 12 months. These numbers just briefly show the impact the mobile industry has on today’s economy. The startup ecosystem is persistently trying to tailor the mobile phones to customers' needs, meaning that users start relying more and more on their phones to provide them with products and/or services they need on a daily basis. With mobile wallets such as ApplePay, Google Wallet etc. on the market, phones slowly become the only object people really need to carry with them as everything can be stored on it and so can their identity. But in how far is it safe to store the ID on mobile phones?
During the TechCrunch Disrupt NY event ShoCard showcased their solution to this specific matter that is supposed to revolutionize the way banks review individual’s identities. Indeed, the co-founders of Shocard, Armin Ebrahimi and Jeff Weitzman explained how they use the technology behind the bitcoin called blockchain to encrypt and store the user's identification information.
Could the blockchain remodel the way private information is safely stored?
“Identity has always been a problem on the internet” said co-founder Jeff Weitzman. Safety has always remained the top priority for banks and even more so with technology being embedded in almost everything we do today. Thus ShoCard’s process of creating an ID starts by users scanning and signing their identity via the mobile app. The identity credentials are then handled in a very unique way, as ShoCard does not rely upon a third party. It rather uses the decentralized blockchain technology to store this information very confidentially. Rather than sitting on a server, this technology distributes the information through nodes across the bitcoin network by generating a set of identical keys (private and public) to seal the records. The information is kept private through enterprise-grade encryption. Basically one can refer to the blockchain as a secure database, which stocks all the documents. Once the ID has been established it will provide individuals with a proof of identification. For instance when doing an online purchase some websites are more sensitive than others and require user identification and these security checks can very often be complex and confusing to the user. ShoCard would enable users to easily approve transactions via the use of the mobile app. Instead of being redirected or having to answer security questions, the ShoCard app will notify the user of the occurring transaction and will ask the user to either accept of decline the purchase.
Is Shocard going to disrupt the conventional management system of banks?
Potential partnerships with banks could lead to a more convenient user experience. If for instance anyone would want to certify that another person is holding the correct ID, in this case a bank,they’ll send them their ShoCard, which allows the bank to verify that the user holds the data matching the sealed records which can be proved through the private key the user has. The bank will then issue its own set of private keys, encrypted as well, that will tie to the user's ShoCard and will allow the bank to identify their ShoCard whenever they use it for a transaction. The same benefits apply also of course to credit cards and in case of a stolen credit card, users will be alerted immediately and have the ability to instantly block the transaction.
Other startups such as miiCard, a European based startup or Jumio, located in California, are also offering identity verification processes however none of them have used blockchain, which is ShoCard’s main differentiating factor. It remains to be seen how well the newly founded company will perform but if they were to be successful, there could be a major cutback of $27 billion losses caused on a yearly basis through identity theft (InsideBitcoins). Given this figure, it could be very interesting for financial institutions to have a deeper look into the benefits of the use of blockchain when storing personal information.