In a move not surprising from a partner organization of DATA (the organization that assisted New York state employees to write the “BitLicense”), ID3 has announced the release of new identity-tracking software that they hope cryptocurrency companies will make a pre-condition for customers wanting to do business.
The software was “collaboratively written with public and private stakeholders.” Translation? Governments, who are globally known to be online spies, had a hand in the software’s development, too.
And what is it exactly? The ID3 software, called Open Mustard Seed, wouldn’t just contain your name, home address, birthday, government tracking numbers, etc. It would also contain “biometric” and “behavioral” trackers, and all this data would be fused with every online transaction you ever used it for.
Sound a little nightmarish? Don’t worry, silly skeptic—ID3 crosses their hearts that the contents of your identity pack will remain anonymous to third parties. When you cough up your identity pack to Overstock to buy that groovy lava lamp, for example, all Overstock will see is “Buyer Identity Verified.”
ID3 wouldn’t dream of sharing this mass of private data about you with others—unless, of course, the third party requesting the data is a government employee, by ID3’s own admission.
In fact, the software developers have a vision of an entire Internet built on trust—which, as you’ll remember, is exactly the opposite of how cryptocurrency works. A statement by ID3 Managing Director Dan Harple is especially revealing:
“The next phase of Internet growth requires a re-tooling, with identity and trust at the foundation.”
Identity? Trust? One has to wonder if Dan Harple has ever even used Bitcoin.
Surprising (or Not so Surprising) Cheerleaders
ID3 claims that they there are many Bitcoin-based businesses who are wild about their new identity-tracking software, including BitPay, Bitstamp, Delta, Ripple Labs, Swarm, Xapo and ZipZap. This isn’t surprising, as some businesses choose to be more responsive to governments than they are to customers.
And governments have been itching for a way to track individuals online as closely as they attempt to track them in the physical world. ID3 may have just created the End to Online Anonymity 1.0—that is, for those who opt-in.
This means that there’s likely going to be a divide among Bitcoin businesses—those who “comply” and cut off services to customers who don’t pony up their flesh-and-blood identities first, and those who continue to serve their customers the way they always have—more or less anonymously.
While the shape of this divide remains to be seen, what is obvious is the lesson that cryptocurrency has taught us: that online transactions don’t require trust or identity. That in fact, we’re all safer without them.
Identity is Unnecessary for Online Transactions
Online transactions have two purposes and two alone: that the seller delivers what he promised to deliver and the buyer pays what he promised to pay. That’s it. Real-world, flesh-and-blood identity has nothing to do with this process.
Think about eBay—buyers and sellers frequently have no idea who the other party actually is, and the process works pretty well. They’re able to make good decisions based on reputation ratings alone. Even better, escrow services as practiced by the likes of BitPremier and others make transacting online even safer.
The idea that your flesh-and-blood identity is somehow necessary to using cryptocurrency online is designed to trick you into complying with those who wish to spy on you. Dramatic guises of government campaigns are used, called “Know Your Customer” (KYC) or “Anti-Money Laundering” (AML). Under all the fanfare, however, is simply the bad idea that you are somehow “safer” when you give up private information to third parties and give them the power of your trust.
It bears repeating: Power corrupts, and absolute power corrupts absolutely.
An Evolving Internet Based on the Principles of Satoshi’s Whitepaper
Many are already building a new Internet foundation that requires no identity and no trust. Think MaidSafe and Ethereum, due to be released within months. Or the already available OpenBazaar and NXT FreeMarket. Why were they built? Because so many understand that the less we have to trust one another or divulge our identities, the safer we all are.
The trustlessness of a decentralized Internet is what most of us will choose to use in the coming years. Emerging alternative Internet protocols are the future. ID3 and all others who cling to old trusted third party models are cementing themselves in the past.
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