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Free KYC for businesses: Brave Browser to use Civic blockchain ID

Andrew Munro 24 September 2018 NEWS

Brave would probably be in a tough spot without Civic's free KYC system.

These days all money is tracked and accounted for to theoretically prevent criminal and terrorist financing. It doesn't work very well, but everyone has a legal obligation to kind of just roll with it.

But cryptocurrency is money too, which leads to some interesting legal anomalies. For example, you'll often need to provide ID when buying bitcoin miners but not when buying GPUs which can also be used to mine cryptocurrency.

This is also a pain point for many cryptocurrency projects, which are often all about rewarding people with cryptocurrency incentives. If only there was some way to quickly and automatically verify user identity without paying a cent.



An impossible problem

Brave browser and its Basic Attention Token (BAT) cryptocurrency is one of those projects in the awkward position of technically paying people money. It aims to reward people for viewing ads through a revenue sharing agreement where advertisers buy BAT to spend on ads, and that BAT is paid directly to publishers and ad consumers.

But technically, those browser users and publishers are getting paid. This means users actually need to provide identification to the Brave browser before they can opt in to ads, while publishers are similarly obligated to provide identification. It's a strange future where people provide ID to a browser before surfing the web.

Traditional methods obviously wouldn't be feasible for anyone. It would be a ridiculous point of friction for new users, while also being inordinately risky and expensive for Brave.

It will often take days and thousands of dollars in labour costs to verify a single domestic individual. It only gets even more complicated and expensive when the individual is overseas, or when you're trying to verify a corporate entity. There's a reason global financial institution annual KYC costs are measured in the countless billions of dollars.

This puts Brave in a seemingly impossible position. It needs to conduct timely KYC checks on its opting-in publishers and users without causing undue friction, without taking too long and without paying too much, all while maintaining complete user privacy.

On 21 September, at Consumer Identity World conference in Seattle, Brave announced that it would be using Civic KYC.

Describing it as nifty doesn't really do it justice. It's a free KYC solution, available right here right now, for businesses or anyone else who needs to verify identities online.

How Civic works

A KYC check takes two parts.

The first is to get information from a user. In the case of a financial KYC check this includes full name, address, date of birth and other things.

The second step is to verify the information provided. This is commonly done by asking for a picture of the user's driver's licence or other ID. This is then cross-referenced with the issuing institution (the DMV in the USA, the RTA in Australia, etc) to make sure it's legitimate. Smaller businesses will often outsource these procedures, while larger businesses might have hundreds of employees to handle it.

Once the information has been collected and verified as being accurate the company can say it's done its due diligence. The exact amount of due diligence required will depend on the situation.

Civic is a way of automating this process by giving people re-usable digital identities which can be verified just as legally and accurately without everyone needing to go through the entire KYC song and dance every time over and over again.

Individuals can upload their documents to Civic (the information providing stage), and these can then be verified by "validators". A validator might be, for example, a bank which has previously verified that person's identity and can therefore attest to the legitimacy of their driver's licence, or anyone else who can legally verify the information. They are paid for their trouble with the CVC cryptocurrency.

As such it's a way for existing businesses to recoup some of their previous IDV expenses, as well as a potential revenue stream when someone is being verified for the first time.

Typically this cryptocurrency would be paid by the businesses that want to verify a user, but Civic is covering the costs for the rest of the year to help seed the system with a large user base and verified identities, hence being a $0 KYC service. The attestation only needs to be provided once, and then it can be attached to the user identity in the Civic app, where it's good until it reaches the relevant expiry date, or until someone changes addresses and that needs to be re-verified, or similar.

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The end result is a system where the legwork can be done once, at which point users can provide KYC-compliant verification instantly. It's infinitely better than the painful and wasteful current system where everyone needs to constantly re-provide and re-verify information over and over again.

For the user, these verification events take the form of requests arriving on their phone through the Civic app, saying something like "Brave browser is requesting your verified name, address, etc, so you can participate in the paid publisher program".

The app itself is unlocked through biometrics to ensure the match between the app user and their personal digital identity.

One of the best upshots of this entire system is that users don't need to give out their actual data to be verified. So, for example, instead of entrusting Brave with all their personal information and a picture of their driver's licence, they can just send over bits of information that say something like "I have been verified in line with AML regulations for this particular service, as verified by that institution".

This further reduces costs for companies that want to use it, by removing the costs of storing sensitive consumer data and the cost of brand damage when it inevitably gets stolen.

It's one of those kinds of systems that's only possible with distributed ledger technologies like blockchain. And it's here just in time for platforms like Brave, which would have an impossible headache without it.

These unique types of application are why identity itself was inevitably going to end up on the blockchain.


Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VET, XLM, BTC, ADA

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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