(CVC) - Civic
What is CVC?
Civic is a company that will be utilizing the added benefits of blockchain technology to their already existing KYC platform. Over the years the need to store and share information digitally has exponentially increased becoming a growing trend. Although, not without a new set of problems arising such as high-profile data hacks, leaks of personal information, and cases of un-encrypted data being lost or stolen. Many government sectors are slow to adapt and many services today have not even upgraded to digital record-keeping. Unfortunately, there isn’t any real reason for this type of stagnation.
Currently, there are many different complications in the IDV (Identity Verification) industry that, Civic can position themselves to begin solving. First, a person who lacks proof of identity may be unable to exercise/access some of their most basic legal rights including; voting, education, healthcare, and welfare. As of January 2016, there are 1.5 billion people who lack proof of identity. Due to the lack of identity documentation, there are many individuals who are underbanked or simply unbanked completely because they are denied access to financial services. Moreover, this has also resulted in a rise of unregistered births in many low-income countries because parents struggle when obtaining the necessary information needed to verify births. For those reasons, one can see that there is a largely growing global demand for IDV services.
In 2016 alone, 15 million adults in the U.S were victims of identity fraud. 16% more than in 2015. Total losses suffered amounted to $16 billion USD.
Globally, almost 1.1 billion identities were stolen in 2016
Personal Identity Information (PII) accounted for 42.9% of data breaches with personal finance information (PFI) accounting for 39.2% of breaches.
How is IDV data acquired and what is the cost?
Because there are differences in regulation depending on location, the information required to verify an identity can vary for different activities. Additionally, the lack of efficiency and varying requirements in the current systems make it impossible to derive a flat cost per customer. For example, it costs a financial institution roughly 15-20$ per customer to verify KYC. Although the process is similar if not identical for most institutions the customer finds themselves repeating the same process every time they need to access another product or service. Furthermore, the time and cost to conduct a KYC are increasing year-over-year as more regulations are placed on the process. Thereby causing a detrimental effect on customer relations while invariably impacting customer acquisitions as well as conversion rates.
“Financial firms’ average costs to meet their obligations are $60 million, some are spending up to $500 million on compliance with KYC and Customer Due Diligence (CDD).”
– Thomson Reuters
CVC Ecosystem / Existing KYC platform
Today, Civic already provides IDV services through their platform known as the Civic Secure Identity Platform (the “SIP”) and it can be accessed by downloading the Civic Secure Identity App. A user sets up their digital identity on their personal device and verifies their identity to become a Civic user. Personal information is stored securely on the users’ phone using high-level encryption and biometric locks thus keeping the users’ data in their control and makes it much more difficult for hackers to gain access to a users personal information.
With the addition of a decentralized blockchain architecture, the Civic App allows people to share and manage their fully verified identity data. The process by which this is accomplished begins when the user submits their personal information to the Civic App which then undergoes a verification process by Civic. Once verification has been approved the data attestations are stored on the blockchain and can then be used to verify user identity and authenticity. In short, users will be able to verify their identity through Civic and that identity information is then stored on the blockchain. So moving forward in the future when that user needs to pass a KYC, they will be able to verify their identity using the blockchain transaction to verify it.
“But how is an identity stored and verified on a blockchain?”
At first, it may not be quite clear how someone could store their personal information in a blockchain transaction so that it is verifiable. Users personal information is stored in a coded in a hierarchy and organized into a Merkle tree. Imagine a data stamp with multiple layers in it where each layer is a node that represents a piece of your personal information. For example, a node called “Name” would contain child nodes with “First Name” and “Last Name” attached to them. In this way, a users’ personal information can be stored in a data transaction that can’t be altered. Two large advantages this structure promotes are enhanced User control by allowing the User to selectively reveal pieces of personal information. Also, it promotes security by integrating blockchain technology to ensure that the information hasn’t been tampered with.
How does the (CVC) token work?
The Civic token or (CVC) will be used as a form of settlement between two parties initiating an identity verification or KYC process. The (CVC) used to pay a transaction is awarded to the Validator and the User as a reward for sharing information. (CVC) will act as a means to incentivize all participants to contribute to the overall ecosystem. Civic foresees that the ecosystem will potentially develop in such a way that third-party providers of identity-related products will offer their services and products to parties participating in the Civic ecosystem thereby allowing users who own (CVC) to purchase those services through Civic. The benefits of using a tokenized ecosystem to facilitate transactions provide numerous advantages over the use of existing tokens in that;
CVC can be used across any number of jurisdictions while retaining a single uniform method of payment.
Settlements can be achieved automatically and irrefutably by utilizing blockchain-based tokens within a smart contract.
How will all of this work together?
The Civic platform will combine the distributed data models, attestations, and (CVC) token into a singular ecosystem that will drastically reduce the costs associated with KYC services whilst simultaneously compensating ecosystem participants, and keeps users in full control of their personal information.
The User (you) needs to use a service that will require them to pass a KYC and verify their identity. They apply for a service from Service Provider (A) and send them the required personal information through the Civic App.
Service Provider (A) verifies the users personal information using its existing verification methods.
Service Provider (A) records an attestation of the Users private information on the blockchain thereby creating an immutable, verifiable, identification record.
At a later point in the the User (you) applies for a service from another Provider (B)
Service Provider (B) requests access either to certain or all user information. The Civic App then determines if the necessary requirements for verification have are met.
Provider (B) and the User (you) agree on a Validator who has previously attested to the Users’ personal information. In this case, Provider (A), who offers a price in (CVC) for its attestation, and Provider (B) accepts that offer to access the data.
The User (you) then provides their data to provider (B) which enables them to locate and view the transaction that was given to them from provider (A) so that they may confirm the users personal information is available on the blockchain. If satisfied, Provider (B) can purchase the attestation and pay for it in (CVC)
Once Provider (B) has paid for the personal records with (CVC). The User (you) will then send their personal information with the requested content in plain text.
As the transaction is completed the user sending their information will trigger the release of (CVC) which is then divided between the User (you) and Provider (A) at a ratio which is previously defined in the smart contract.
Why is Civic – (CVC) a better way?
Because privacy is of the utmost importance it is crucial that users’ personal information is controlled by that User at all times. By storing that data locally on their devices a physical separation is created that makes theft much more difficult because an individual device must be targeted on a person to person basis. Additionally, this will prevent the types of mass data breaches that are becoming more prevalent today. Furthermore, as adoptions grow, Civic believes that the black market value of specific identity attributes will declines over time as more entities move away from previously used methodologies. An example would be that credit card details have value on the black market because transactions can take place with the knowledge of those details alone. However, once a credit cards details must be presented with blockchain-based proof that the value of simply having those details should progressively deteriorate over time as the Civic ecosystem is adopted.
Who is on the team?
– Vinny Lingham, CEO & Co-Founder
A serial entrepreneur who previously founded the gift card platform, Gyft, which was acquired by First Data Corporation in 2014. After over a decade of experience working in e-commerce, he had realized that no one had a universal solution to tackle identity fraud for consumers.
– JP Bedoya, VP of Product & Design
Has over 15 years of experience developing and designing consumer as well as enterprise products. Having previously served as Head of Product Design at The Climate Corporation overseeing all aspects of their product experience and user research for their agriculture platform. Additionally, **He was also the VP of Product at Lifelock.
** (Working at Lifelock is a valuable qualitative factor because it means he has social leverage and could help to possibly influence a partnership which would allow LifeLock to offer their IDV services through the Civic ecosystem)
By proposing the creation of their ecosystem, Civic stands to improve upon vast inefficiencies as well as reduce the costs associated with IDV services to overall streamline the process and create a seamless user experience. Furthermore, organizations will have the opportunity to monetize their KYC process both inside and outside of their core business areas. The longer-term impact seen upon users should be greater privacy and control of their personal and other sensitive data. In time, it will no longer be enough to commit identity fraud simply by using one’s personal data because proof of data ownership will be required as well.
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