Decentralized identifier systems are key to tokenized economies | Opinion

As someone who has spent years navigating the complex world of digital identity and privacy, I must say that the developments showcased at this event are nothing short of revolutionary. The China RealDID system represents a significant leap forward in how we manage government-issued digital identities, offering both convenience and enhanced protection for users’ personal information.

As a researcher, I would express this in my own words as follows: During a Bitcoin Conference in July, President-elect Donald Trump expressed his intention to establish a national Bitcoin reserve, expanding on the approximately 203,000 BTC already held by the U.S. government, which were obtained through asset seizures during high-profile criminal investigations. This move aims to position the United States as a global leader in cryptocurrency and a dominant force in the Bitcoin world.

To head the United States Treasury Department, one of the most powerful positions within government responsible for shaping tax policies, managing public debt, regulating international finance, and imposing sanctions, President Trump has chosen Scott Bessent, a former macro hedge fund manager who worked under George Soros. Notably, in September 16, 1992, Bessent bet against the British pound (fiat currency sterling) while it was part of the European Exchange Rate Mechanism – a fact I learned during an interview with Scott Bessent at Soros Management in the year 2000.

Following the US elections, Bitcoin’s price has surged by approximately 40%, nearly reaching the $100,000 mark for the first time on November 21st. This remarkable increase occurred as larger investors (whales) sold and smaller ones (guppies) bought, following the lead of Scott Bessent. Notably, some significant Bitcoin holders (whales) also shorted MicroStrategy stock, Bitcoin ETF shares, and Bitcoin mining stocks. Moreover, Wayne A. Jacobs, special agent in charge of FBI Philadelphia, cautioned that as the use of cryptocurrencies grows among investors, cybercriminals are becoming more adept at devising intricate strategies to mislead and defraud the public.

Let’s all remain alert as we move around in this environment, and if you suspect any fraudulent activities, kindly inform the Federal Bureau of Investigation (FBI) via their Internet Crime Complaint Center at ic3.gov.

Based on the 2023 Cryptocurrency Fraud Report from the FBI’s Internet Crime Complaint Center, I’ve found that over 69,000 complaints were made about cyber-enabled crimes and financial fraud involving cryptocurrencies. These crimes encompassed a wide range of schemes like data breaches/identity theft, government impersonation scams, SIM swap-related crypto theft, tech support, confidence and romance, investment, and business fraud. The total reported losses amounted to over $5.6 billion. Given the escalating frequency of these cybercrimes, people are growing more cautious about sharing their personal data with centralized businesses due to security concerns. For instance, when signing up for an online service or downloading an app, users often need to provide details such as their name, email address, home address, phone number, and so on. Regrettably, these centralized entities have struggled to ensure the secure storage of this sensitive information against hacker attacks.

More recently, authorities have indicted five suspects, four of whom are American citizens and one British national. These individuals are believed to be part of the infamous hacking group known as Scattered Spider or its aliases Octo Tempest, Muddled Libra, 0ktapus, UNC3944. This group is associated with significant data breaches, identity extortion schemes, and crypto theft using SIM swaps, targeting approximately 100 multinational corporations in sectors like gaming, outsourcing, telecommunications, and cryptocurrency. Often, they work alongside the notorious Black Cat/ALPHV ransomware group.

It appears that Scattered Spider has a wide presence, with their activities stretching far since March 2022 as seen from CrowdStrike’s perspective. Their tactics include social engineering, utilizing existing system resources (living off the land), and Remote Monitoring and Management (RMM) tools before they execute ransomware attacks or engage in extortion.

— adam_cyber (@Adam_Cyber) September 15, 2023

As per FBI reports, a group of five young adults, all in their early twenties, have been accused for their involvement in a complex sequence of identity theft and phishing activities. Their objective was to deceive employees of specific companies into providing access to company systems using stolen data, thereby obtaining intellectual property and personal employee information. This data was then utilized to breach the victims’ cryptocurrency wallets, accumulating millions in ill-gotten funds. US Attorney Martin Estrada stated, “We claim that this cybercriminal group executed a highly intricate plan to swindle tens of millions of dollars’ worth of intellectual property and confidential information, as well as personal data belonging to over half a million individuals.” He further added:

From the example at hand, it’s clear that phishing and hacking techniques are growing more advanced, leading to significant financial losses. If any aspect of a message, email, or webpage appears suspicious or odd to you, there’s a good chance it actually is.

DDID networks protect against identity theft and data leaks

Over 100 countries use national IDs,  and many countries are exploring to operate decentralized digital identity (DDID) networks. Because identity impacts virtually every aspect of one’s life, from using online services, attending school, opening a financial account, voting in elections, obtaining medical services, buying property, securing employment, and getting concert/airline tickets. Vitalik Buterin, co-founder of Ethereum (ETH), at the Devcon 2024 event in Bangkok,  pointed out that DDID networks are key to the global economy which is tokenizing, with “Ethereum [becoming] the world computer, an incredibly large and diverse on-chain economy, and an incredibly large and diverse global community…all at once.”

Digital identity is one of the world’s most significant technology trends, with the total addressable market for reusable identity in 2026 estimated to be somewhere between $133B and $533B globally. Governments worldwide recognize the strategic advantages of transitioning from traditional physical identification to more adaptable digital ID systems that include reusable identity designed to keep data under the control of its owner, reducing the risk of unauthorized access and preventing identity theft. These systems allow individuals to securely control their personal data, storing it in a digital wallet on their own device and only sharing specific information with verified entities when needed, thus eliminating a central point of vulnerability where hackers could steal large amounts of data. As more governments adopt DDID networks, traditional document-based identity verification that is subject to identity theft and data leaks will move toward obsolescence. 

China launched the RealDID system 

At the DID-Based Cross-Border Identity Summit held in Hong Kong on November 8, 2024, Red Date Technology collaborated with China Mobile, OpenWallet Foundation, IDA, Flare, and Terminal 3 to debut a nationwide blockchain identity system. This marks a significant milestone for the advancement of privacy-centric blockchain identity solutions, boasting four innovative cross-border functionalities.

Track #1: Implementation of China’s RealDID System for Identity Verification at the Border with Hong Kong. The distinctive bond between Hong Kong and mainland China has led to advancements in blockchain-driven decentralized identity platforms. Introduced last year by China’s official identity management body, RealDID is a nationwide blockchain-based decentralized identifier system developed by Red Date Technology, a state-supported company specializing in decentralized cloud infrastructure, under the Blockchain-based Service Network (BSN) of China.

The RealDID system, a revolutionary technology that authenticates cryptographic keys using real names for both online and offline interactions without revealing any personal identifiable information, is pioneering a new method for border crossings. This means Hong Kong residents can enter Mainland China, and Chinese residents can enter China without the need for physical entry documents. By 2024, it’s anticipated that RealDID will issue 5 million IDs. Yifan He, CEO of Red Date Technology, expressed pride in leading the initial trials of this groundbreaking system outside Mainland China. He further stated:

Reaching this milestone establishes a robust base for authenticating and verifying identities anonymously between two countries, showcasing the global possibilities of China’s blockchain technology in preserving user privacy while maintaining regulatory requirements.

In a conversation with me, Tim Bailey, who holds the position of Vice President of Global Business and Operations at Red Date Technology, elucidated the following points: (This version maintains the formal tone while making the sentence easier to read.)

RealDIDs from China have the ability to function across multiple platforms and services, providing effortless identity verification that transcends borders. At present, China’s RealDID offers a viable and affordable solution for privacy-focused identity authentication and verification. This method could serve as a model for global implementation, where each nation develops its own national DID system, stimulating both local and international exchange of anonymous identity data.

On a privacy-focused digital wallet for regulated stablecoins (Track #2), as well as Track #3 which enables the purchase of financial goods backed by tokens that automatically comply with tax regulations, were managed by blockchain companies Flare, IDA, and Red Date Technology.

As a researcher, I can express it like this: “In my observations, the China RealDID system showcased its unique capability to authenticate identities internationally while preserving anonymity in ‘Know Your Customer’ and tax compliance procedures. Remarkably, users could register for regulated stablecoin applications and acquire tokenized financial goods without disclosing sensitive documents such as passports or ID cards. Instead, their identities were verified via the China RealDID platform.

Hugo Philion, CEO of Flare Labs, commented that the trial demonstrated a successful combination of adhering to regulations while maintaining privacy. He expressed enthusiasm about spearheading the introduction of decentralized solutions in emerging markets, particularly China, where the opportunities are immense.

Track #4: Anonymous “Travel Rule” compliance between financial institutions. 

Via RealDID, a mechanism was established to ensure adherence to the Travel Rule among financial institutions when it comes to transferring stablecoins anonymously.

In a series of four experiments, each addressed a practical situation involving privacy and identity verification using China RealDID. The trials illustrated that a Chinese traveler to Hong Kong could utilize their China RealDID in place of a physical travel permit, thus securely verifying their identity – symbolized by a sequence of random numbers – to enter Hong Kong and complete KYC, tax compliance procedures for regulated digital asset financial services. Throughout these four trials, the Chinese traveler’s identity remained completely anonymous, safeguarded against data breaches or cyber attacks, with only authorized government authorities allowed to connect the visitor’s Digital Identifier (DID) to their real identity after following due legal processes.

Read More

• POL PREDICTION. POL cryptocurrency
• Smino and Samara Cyn To Hit the Road on ‘Kountry Kousins’ Tour
• PYTH PREDICTION. PYTH cryptocurrency
• Hong Kong Treasury says crypto is not a ‘target asset’ for its Exchange Fund
• Ananya Panday claims ‘its tough being Bhidu’ after working with Jackie Shroff; find out why
• The Vampire Diaries Nina Dobrev Reunited With Co-Stars To Recreate Throwback Photo, And I’m Not The Only One Loving It
• Blockaid new dashboard to track Web3 activity and threats
• AI16Z PREDICTION. AI16Z cryptocurrency
• SEN PREDICTION. SEN cryptocurrency
• Solana L2 Sonic includes TikTok users in airdrop

2024-12-08 14:51