IAME Deconstructing the Identification Process
Abstract
A decentralized identification system that would allow parties performing blockchain transactions to verify, on a primary level, the identity of each other without having to disclose non-essential sensitive personal information to the counterparties; and on a secondary level the source of the Cryptocurrencies in the transaction. Identification would be conducted by a multitude of independent third party validators, each verifying fragments of information that together would constitute a complete verification, such that only the original owner of the sensitive personal information retains her/his data in a wholesome and useful way. The result of the identification process would be hashed onto a designated blockchain and made accessible on a public repository such that the identification status and source of the cryptocurrencies associated with specific blockchain addresses can be consulted, without compromising the unique identification data.
Building on the previous identification process, the same mapping functions can be achieved without the party disclosing any non-relevant data to a counterparty - by delegating the mapping functions to unrelated third-party Validators. The statement, supporting evidence and functions, would first have to be fragmented in such a way that third-party validators would be confirming fragments of data that, on their own, cannot be used by any malicious third party. However, together, the sum of confirmations would constitute a complete identification process.
To operate the IAME Identification Network, a functional token will be issued, known as the IAM Token, which would operate as a validation token to initiate confirmation requests for validation packets on the IAME Identification Network. Parties would spend the token through the IAME Identification Network client and after deduction of equivalent blockchain hashing costs, the balance of IAM token would be paid out as reward to third-party validators who operate the validation processes on a for-profit basis.
This would attribute not a store of value to the token but a market value based on natural demand and supply for identification processes. The value of the IAM Token would be, in essence, determined by 2 factors:
The cost of validation, which would be proportional to the financial cost of hashing the requested amount of data on the designated blockchain, setting a price floor for the token
Market demand, which would be proportional to the demand for blockchain identification based on the IAME Identification Network
Because of the the ephemeral aspect of data validation in the field of identification, market demand would remain recurring and would only increase with an increased adoption of the IAME Identification Network.
Reward and Ranking Mechanism
As a continuation to the Trial Algorithm, there is a need for a reward and a ranking mechanism in such a way that good third-party validators are rewarded and bad third-party validators penalized. For this mechanism, two reward systems are proposed: a token reward system and a node ranking system.
The token reward system allocates a pool of IAM Tokens to the third-party validators for completing the fragmented validation process akin to mining
The ranking system attributes an internal ranking system to third-party validators within the IAME Identification Network, such that higher ranked validators receive a higher proportion of the tokens, which is indicative of their ranks..
In principle, the determination of the allocation of any IAM token pool would be a function of the outcome of the Tribunal, while the ranking system would be a function of the outcomes of the Appeal and the Control Tribunal. Due to the application of a double blind procedure, the third-party validators would not be at any time aware of whether they are in a Tribunal, an Appeal, or a Control Tribunal - further reducing any risk of gaming the system. Third-party validation would be open to the public and, in the long-run, poorly ranked third-party validators would be banned from acting as nodes.
The biggest source of security risk to persons identifying themselves is through the sharing their personal data with counterparties. Encryption and conventional security measures can work only to the extent that counterparties that handle the information are secure. However, in an economy where the number of electronic transactions a person conducts is constantly increasing, the number of points of potential vulnerabilities increase exponentially, decreasing any advantage gained from security innovations.
Using the proposed IAME Identification Network laid out in this white paper, we seek to resolve the problem parties face in blockchain transactions by having to identify themselves with a multitude of counterparties, while both preserving the anonymity of the transacting party, and satisfying the need for counterparties to conduct a certain level due diligence on clients.
There is both a practical imperative and commercial need for a non-invasive identification system for decentralised blockchain technology and we believe that the IAME Identification Network will be the bridge that will link blockchain technology to the regulated world.
TEAM
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