Ethereum aims to introduce its own identity standard: ERC 725 & 735
These identity standards might be a critical missing piece of the Ethereum network.
The ERC20 standard has become one of the most important in cryptocurrency. It's the token standard, which ensures better compatibility between different Ethereum blockchain tokens and their systems. This is the standard that made Ethereum the world's primary ICO platform, allows for wallets that can hold any ERC20 token and helps facilitate the creation of complete ERC20 decentralised exchanges, and much more.
Standardisation is an important aspect of any ecosystem, and it goes well beyond token standards. According to Hackernoon, Fabian Vogelsteller (Creator of the Ethereum Mist browser and ERC20 pioneer) has started working on identity standards: ERC725 and ERC735.
They might be right. A user identification system is critical for many real world applications, especially with a regulatory lens tightening over cryptocurrency. Korea has ended anonymous trading and there are growing concerns about the compatibility of cryptocurrency payment systems with regulatory requirements.
Plus the world's current identification and identity management systems are fairly inadequate and stand to be thoroughly and permanently disrupted by blockchain tech. The creation of effective and real-world compliant ID standards for the Ethereum blockchain would be a very practical feather in its cap, especially when combined with ERC20 standard ID management systems like Civic CVC.
"Attaching formal verification proofs would be a great use case for ERC 735. For ERC 725 I would like to see not so serious use cases first, like gamer identities or social network claims, before we start to ask institutions to attach claims officially," Vogelsteller said to Hackernoon.
"Some data could also be in zero knowledge proof containers, where the container will validate certain inputs without revealing the contained data itself."
Some projects are already working towards the yet-to-be-created identity standard, such as R_Block whose mission statement is "To transform R_Block into the world’s first careers ledger & anonymous hiring ecosystem. Establishing Workers as the rightful owner & controller of their careers data. To become the industry standard for proof of employment history & performance across careers and beyond. Utilising Web 3.0 [blockchain-esque technology] to create a proof of credibility identity claim compatible with ERC725."
Identity and an effective ID management are at the heart of current problems with money laundering, terrorism financing, data theft, privacy issues, effective decision-making and businesses having the right information to make decisions about hiring, firing, partnerships and almost anything else.
If Ethereum wants to become a permanent fixture it's going to need an identity standard.
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Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, NANO, SALT