The Proton blockchain was designed to be compliant with future regulations, especially those that pertain to identity verification for on-chain financial transactions. In much the same way that banks, wire transfer companies, and most other financial institutions are required to verify the identity of fiat currency senders and receivers, we fully anticipate that cryptocurrency companies will soon be required to do the same.
We see the future for what it is and understand what is coming. However, we don’t want to sit passively by and let new regulations be created solely by people who don’t understand cryptocurrency the way that we do. For this reason, we are making strides to not only comply with what we anticipate will be future regulations, but to set the industry standard ahead of time and guide other projects towards it.
Regulations are coming. Our goal is to influence their creation in a way that protects the spirit of crypto.
Our CEO, Marshall Hayner, spoke about this several months ago in an op-ed published by The Hill, where he outlined that moves by FinCEN – the Financial Crimes Enforcement Network – to tighten identity verification around crypto is an expected change for this industry. Basic KYC standards ensure funds are not being sent to scammers, terrorists, human traffickers, and other criminals.
In order to protect the spirit of cryptocurrency, we need to develop a way to verify identities, while still protecting user privacy. That’s where the Proton blockchain comes in.
Proton provides a pathway for users to prove their identity to one trusted party. By doing so, they can receive a verified identity trust mark attached to their unique @name, allowing anyone who interacts with their wallet to know that they are a verified user. These interactions don’t result in the user’s identity being handed to anyone else; rather, they simply show who is in, and who is out.
Think of how you make everyday transactions using legacy financial systems: you provide every seller with your name, financial account information, address, and more. This is a lot of information to provide to a random merchant, and represents a significant security and privacy risk to the user in the form of data breach, identity theft, and reuse or resale of their personal information. Proton is designed to change this experience by putting the control of personal information back in the hands of the human that it belongs to. By using the Proton blockchain, the opportunity for identity theft is drastically decreased, while known bad parties can be cut out of the financial system.
We are serious about building a human-centric identity ecosystem. Last year, we demonstrated how human identity can be used to secure elections and make voting more accessible. We’ve started work on a production version of this capability that will allow anyone who uses the Proton blockchain to enable secure voting on-chain. Recently, we provided a pathway for users to verify their identity while retaining even more privacy. To build on this momentum and to tie together our existing efforts surrounding account identity and privacy, we’re excited to announce that Robert Capps has joined Metallicus to serve as our Vice President of Identity.
Robert brings more than two decades of expertise in privacy, security, and identity to our team. Known for his work in financial services and commerce, Robert’s detailed know-how will allow us to accelerate the pace of innovation surrounding our verified identity technology. In this way, we will set the industry standards for other cryptocurrency projects to comply with upcoming KYC regulations, and set the standard for human identity, on-chain and off.
To understand the perspective that Robert brings, we held an informal Q&A with him and recorded his answers below. Here’s what Robert has to say:
Question: What is the importance of verified identities for cryptocurrency? Isn’t the whole point of crypto just being anonymous?
Robert: Verified identities are a requirement for financial services transactions, to counter the threat of money laundering, terrorist financing, and cybercrime. While this knowledge of a participant’s identity is a requirement for nearly all financial transactions, it can and must be balanced with privacy and security for the person interacting with the system. Blockchain technologies bring critical capabilities required to manage this balance in a transparent and permissionless way. The elements that make up any given human identity should always be in the control of the human that they belong to. The basic human right to identify oneself, how and when they want to identify, must be preserved in any identity system.
Question: How is Proton Identity different from existing identity frameworks?
Robert: Existing identity frameworks operate mostly in the offline world. Attempts to apply offline identity to online transactions have produced lackluster results, and have left a lot of slack in the systems that are regularly exploited by cybercriminals flush with stolen consumer information, to hijack legitimate accounts and commit fraud. Addressing this disconnect between online and offline identity will require a fresh look, and new ideas.
The Proton Identity is designed to put a digitally assertable and verified human identity into the hands of the person it belongs to, while building an ecosystem of independent Identity Providers and Verifiers that providers of on and off-chain services can rely on to comply with regulatory requirements. A Proton Identity user will be able to choose how and when they identify themselves, at the point where a service requests knowledge of their identity. Using the Proton Signing Request, Proton users will simply connect to a new service with their Proton wallet, and select the identity elements they are willing to share in order to meet the service’s identification needs. Users who lack an appropriate verified Identity during service registration will be given the opportunity to enroll one in a user friendly and trustworthy way, and this verified identity will be maintained in their Proton wallet for future use. For services that only need certain facts about a user rather than their full identity, the Proton Identity will allow verifiable proofs to be provided in place of the sensitive data underlying those proofs. With such a system in place, users can satisfy age and residence requirements without providing their name, address, or date of birth to a remote site, greatly reducing the amount of sensitive data shared, and further reducing the risks associated with sharing sensitive data with third parties.
Question: Are you working on any new and exciting projects for the Proton blockchain?
Robert: YES! My first project and #1 priority is getting a global KYC platform ready for regional expansions that will come with regulatory approvals to operate and native transfer of fiat value to the Proton blockchain. We expect further regional expansion in the USA, with more states pending regulatory approvals – and internationally, with most European countries expected to be available as soon as we obtain regulatory approval to operate there. We’re in the final stages of developing the Proton Identity standard, and the required ecosystem of Identity Verifier and Provider partners to launch this service. Finally, we are developing a production ready on-chain voting system that can be leveraged by any participant on the Proton blockchain, with flexible vote weighting and voter requirements that will be configurable for each initiative to be voted on.
The Proton blockchain has always been focused on solving real-world problems and making life better for people around the globe. We aren’t content with just building a product that works in its own little bubble; our goals are far-reaching, and we won’t stop until we are making a difference worldwide.
Have questions about what Proton is or what we’re building? Be sure to check out our website here where you can learn more about staking, yield farming, our roadmap, and more. Our Twitter account is a great way to stay up to date on the latest news about Proton, so don’t forget to follow us there. If you would like to read this blog post in Korean, you can visit our official Proton-Korea Medium page by following this link.
Welcome to Proton, we’re glad you’re here.