we need to get together we need to work
together we need to be challenged and we
need to basically figure out what this
whole block train is doing and how we
can use it to innovate the big companies
and work together with the startups and
that's going to happen now but what are
we going to do with it what are we going
to do with this blockchain with all
these different perspective and it all
starts with one thing with trust and on
the other side identity you know
blockchain is trust but they only have
what is going on with identity how can
we make sure that all these regulations
because she didn't get us from the hooks
he didn't say okay everything is allowed
no we want privacy we want monitoring
money-laundering we need to protect it
to everything all the normal rules apply
to the blockchain and how can we
basically do business in the secure way
and also deal with identity and I'm
happy very happy to report that that
very issue we have mr. identity Europe
here in the room David birch who's
basically written two old books about it
and he's basically going to think about
it and he's going to talk about it how
we're gonna do that so give him a big
hand the body phone speaker David birch
right is there a thing for their slides
yes Merrill can I give that to you
did you have that oh there we go thank
you okay
yes so what I'm going to talk about this
morning is is much more specifically so
last year this was a great event and I
remember sort of talking at a very high
level as many people did and I thought
this year it would be good to sort of
focus down on more specific topics and
one of the most interesting topics I
think is identity I was at consensus in
New York actually I was going to say was
anybody else a consensus but I can't see
anything because of the lights I've lit
I have no idea if there's an audience
left in the room at all so I won't i
won't say that but the point is I was at
consensus and one of the key topics
which kept coming up again and again was
this issue of identity and in particular
and there and there have been some
subsequent conferences and discussions
about whether you know putting identity
on the blockchain is a good thing or not
and how we're going to do it and I have
anybody that follows me on Twitter will
see I've got into some arguments with
people about this recently over the last
few weeks because the the reader should
we put identity on the blockchain has to
there are two issues that need to be
discussed within that so one is what is
identity and the other one is what is a
blockchain so once we've got those two
things sorted out then I think we can
move the discussion forward so so I'm
going to try and cover both of those
today which I think would be and I
should say I'm I am genuinely curious
because I know nobody knows the answer
to what how exactly when and do this I
am genuinely curious as to what you
think about the model that I'm going to
present and I genuinely welcome the
feedback on it
so so please post on Twitter what you
think so I'm going to do it in three
parts I'm going to talk about a model of
identity and in particular model of
digital identity because I think it's
impossible to take the discussion
forward unless everybody in the room has
some shared understanding of what of
what I mean by identity so I know your
heart sinks mine does whenever the
present wherever the presenter says now
what is identity I know I know what a
horrible thing but we can't have any
discussion unless you understand what I
mean by identity so we're going to have
a little model of identity I'm going to
talk about why some form of shared
ledger for identity transactions might
work and I particularly want to frame
the discussion in that context and then
I'm going to I'm going to look at a
practical example of how it might of how
it might work so those are my three
areas to cover okay so stage one is to
have a model of digital identity and the
way I formed this model is based on a
couple of a couple of ideas to actually
go back quite a long way to some of the
chapters in this book and I just want to
highlight three points in order so that
you understand where the thinking is
coming from so the first thing is and
you'll have seen this from anything I've
written about this I am a very big fan
of pseudonymity so a pseudonymous
transaction is a transaction where the
counterparties may not know who each
other is but somebody knows who each
other is right so to give the very
simple example so Connie looks me up on
Ashley Madison and when she looks me up
on Ashley Madison and the first thing
she wants to know it was I'm guessing I
don't know the first thing she wants to
know him this is a rhetorical purposes
the first thing the first thing I think
she should want to know is am i a real
person or not right that's a very simple
you do have any idea how
that question is to answer on the
internet right now just thats it is this
a real person or not right so let's
imagine so Connie wants proof that I'm a
real person
so I send her something from Barclays or
ABN or something like that which says
that I'm a real person and she knows who
ABN are and she could trust ABN she
doesn't know who I am but she knows that
somebody knows who I am that's what I
mean by pseudonymous so my first
principle is the online interaction
should be pseudonymous it's a
fundamental if we're going to have any
kind of privacy or manageable existence
in the online environment we must have
pseudonymity to any of those people who
are talking about we must have internet
driving licenses and whatever they're
absolutely insane they don't know what
they're talking about the second point
is that these pseudonymous identities
which will be the virtual identities
that we interact with in cyberspace are
very easy to link to digital identities
so we can have lots of them depending on
what a digital identity is of course so
the idea that we interact online but we
interact online through lots of
identities for specific purposes is a
very important part of my model and the
third part is that we want people to
have lots of these identities now so
when I'm interacting with you whether I
choose my ABN identity or my football
club identity or my hobby identity or my
home ident or my family identity or
whatever I expect people to have a whole
bunch of identities just like they have
a whole bunch of credit cards or debit
cards right now and it's an important
thing so we want to get away from the
idea that you have an identity and
somehow this identity has to be used in
all circumstances otherwise we can't
have any kind of legal certainty that's
just plain wrong so these are sort of my
basic principles now in order to in
order to sort of just realize why it's
called truths so so the argument against
all this people say well if you let
people have pseudonymous virtual
identities then you have the problem of
troll
right because people are anonymous on
the internet and they say horrible
things to each other and all all this
kind of thing right it was total prom
trials and my point is that's not true
that depends on how you implement things
so if you implement things properly with
a secure infrastructure there's no
reason why people cannot interact
pseudonymous ly and you don't have to
have trolls on historical stuff and I
won't talk about that today okay so so
here's the model I'm going to use then
the reason the model looks like this is
because my assumption that people will
have lots of virtual identities right so
on the left-hand side you got lots of
virtual identities and some of those
identities are controlled by more than
one mundane our real identity on the
right hand side okay and argue a simple
example will be the virtual identity of
consult Hyperion the virtual identity of
consult a period isn't controlled by one
mundane identity there are several
executive officers of the company that
can do things with that virtual identity
so there's no one-to-one mapping between
virtual identities and mundane
identities right so you have many
virtual identities on one side and many
mundane identities on the other side and
if you try to link those together a very
basic rule of systems analysis I know I
know systems analysis isn't fashionable
anymore
I know you're all agile and nobody
bothers with requirement specifications
anymore no one tries to work out what
they're supposed to be doing before that
I know all of this okay but when I was
growing up we used to do a thing called
systems analysis and in systems analysis
one of the iron rules of systems
analysis was you can't have many too
many entity relationships if you have a
many-to-many relationship that means
there's something in the middle you
hadn't thought about and so this is in
this instance I want the many-to-many
where I want many virtual identities
many mundane identities the missing
identity of the missing entity in the
middle that's digital identity so I'm
very sweat when I say digital identity I
mean something very very specific by
digital identity okay so in this model
you have a digital identity which I mean
you can think of it as being a key pair
for sake of argument so think of a
digital identity as a key pair
this is the easy way to think about
things so in the middle of a digital
identity and you might have several
people several mundane identities that
can control that digital identity
several people that have access to that
private key and on the other side the
public key can be used to create a great
many virtual identities or what you
would think of as public key
certificates right so on my right-hand
side here I've made two examples I've
got I've got my digital identity which
is dgw Burch and from that there are two
virtual identities created one from the
BBC and one from ANZ and remember what I
said about the creation of the virtual
identities so taking the public key from
my digital identity and making a virtual
identity from that which is essentially
by signing it with your own private key
so so my BBC identity is my public key
signed by the BBC's private key and
because of the way public key
photography works anybody in this room
can check the BBC public key and so
therefore they can tell that that's a
real virtual identity that's inexpensive
cryptographic operation we can have lots
of those now I don't want to go into it
now but one other point about this of
course is those virtual identities can
say that contain the same public key so
they can be matched so that's why I
don't think people will just have one of
these because you don't want necessarily
your identity to be tracked across the
multiple virtual identities if I have a
virtual identity that I use for
financial services right so it has the
same public key in the virtual identity
from ANZ and Barclays and Credit Suisse
that might be absolutely fine right but
there might be other circumstances where
I don't want them to be tracked I don't
want it to be to be matched across
different virtual identities so
therefore I would have a different
digital identity by a different key pair
now in practical terms those key pair
which are the heart of all of this kind
of thing the ownership of the digital
identity depends on the ownership of a
private key I'm sure you can all see
where this argument is going so the also
in it to do anything with the digital
identity you have to control the private
key and this issue of control of the
private keys is what comes back to or
how are we actually going to
really implement this kind of thing so
um oh sorry
now I've divided the use of these
identities across three domains which is
very familiar to anybody that works in
the identity space so we have an
identification domain right so
identification so in my world
identification means binding the private
key to a mundane identity right
identification means something really
specific to me not a general term so in
the identification domain we need a way
to connect that pub to connect the
private key to something in the real
world that is complicated and expensive
because that's you having to go to the
bank with a passport and driving
licenses and God knows what else so we
want we want to minimize the number of
interactions in the identification
domain because identification domain
complicated and expensive and also by
the way every time you're forced to
reveal your real identity in in the
domain that opens up the potential for
identity theft it's not done properly so
we want to minimize those interactions
in the middle you have the
authentication domain so authentication
means demonstrating that you have
control of the private key so again I'm
not using these words generically I mean
something very specifically by
authentication authentication means
demonstrating that you have control of
the private key and then we have the
authorization domain which is where
stuff gets done okay so we transfer we
transfer our our interactions into this
authorization domain and that means all
of the interactions are between virtual
identities that are allowed to do stuff
so we don't have any more who are you
questions in the authorization domain we
have the what can you do questions are
you allowed to access this bank account
can you open this door can you drive
this car
we don't ask who are you we get that out
of the authorization debate we don't
want to use your identity in
transactions wherever possible so so the
first part of my model is we now have
the real identity the digital identity
the virtual identity the three domains
and they mean something specific I'm not
using them as generic
terms so that's the okay so now we can
move on to we can move on to what we're
going to do with that okay so I don't
want talk about so in the identification
domain yeah it's complicated and
expensive authentication it getting easy
because of mobile phones and Fido and
stuff like that so that's nice and
straightforward and in the authorization
domain the switch to apps and mobile
phones and online or whatever means
these things are actually easy to
implement they really are right because
it's all to do with just moving these
keys and certificates around I always
spend time talking about that okay right
so given that we now have a model of I I
mean you have to agree with it but just
for the sake of argument let's just go
with it
right so I now have a specific model of
identity so the next question is what
are our options for connecting that
model of identity to some form of shared
ledger so here's here's my shared ledger
at the bottom and here's my identities
at the top how are we going to connect
those two things together well the next
part of the model I want to put in front
of you here is that the ledger a ledger
is not a record of things that would be
like a database or something a ledger is
a record of transactions right so if
we're going to store things in the
ledger what we need to store in the
ledger are transactions so what are the
transactions that are associated with
what identity that we're going to store
in the ledger right so to again I want
to get away from generic terms shared
ledger is a record of transactions so
what are the identity transactions that
we're going to store in the ledger well
and from the way I've set it up you can
see there are three kinds of identity
that we could put in the ledger so the
first thing we could do is we could take
the real identities and put them in the
ledger okay so a crud means create read
update delete so it just it doesn't mean
nonsense it means create read update
delete so I could take your real
identity and I could put that in the
blockchain okay and this is the sort of
nonsense that you read about quite a lot
at the moment we can give everybody in
the
world and identity because we can take
their fingerprints face DNA whatever and
put it on the blockchain for no
conceivable reason I could imagine I
can't think of any viable use case which
would make sense to store people's
actual identities on a blockchain
somewhere I mean that just seems to me
to be inviting trouble right with what
we want to keep your real identity
locked up safe away from all of this
kind of thing so the idea of taking your
real identity and putting it on a shared
ledger a blockchain or the blockchain
I'm not sure about that I'm not sure I
can see any real reason for doing that
ok when when Connie and I connect up on
Ashley Madison she's not looking for my
DNA not at first ok what she's looking
for is so connecting to the real
identity doesn't help it because it
doesn't answer the important question
you know also the thing is if you start
putting things like DNA on block chains
then you can start so for example I was
at a conference a couple of weeks ago
and somebody from Department of Homeland
Security was talking about DNA testing
at points of entry not for
identification purposes but familial
matching right so if I turn up at an
airport with a kid and I say yeah this
is my son knit for you whatever they can
take cheap swabs and they can do DNA
testing now and it only takes two hours
which i think is pretty impressive it
takes two hours to get the familial
match like are you related to this kid
and and so it would be fun like if
everyone's DNA was on the blockchain you
know you could run these matches all the
time to find out who was related to her
Bria and that might considerably
increase the Gaiety of the nation that's
all I'm saying it might be I don't think
Neeley will be very happy with it but it
the point is it would be funny wouldn't
it because you know you fill out that
form when you go to America how many
family members are traveling with you
you know
and then you get to the desk and the guy
says guess again you know so so I'm not
sure about putting real identities on
the blockchain it's a possibility but
I'm not sure about them what about
putting digital identities on the
blockchain that's an interesting idea
because remember the key problem that I
alluded to if if this is a good model of
identity
if digital identity is essentially a key
pair at its heart then the problem of
looking after that private key becomes
the key digital identity problem right
so I create the digital identity dgw
burch do I really want the
responsibility of looking after the
private key right now a consensus nobody
liked my idea but my idea was I can take
my private key I can convert it to a QR
code like you saw this morning and then
I can have it tattooed onto my scrotum
and I thought that would be a very
effective way of managing the private
key and making sure that it was yeah
blah r j-- li private right but also so
that I wouldn't forget it because you
know if it's if it's in something I can
forget they move this has got no future
because if you can lose that private key
you absolutely will look why haven't we
Bitcoin with all the people who like
they were worried about big going
schedule so they printed out their their
keys and they put on pieces of paper and
then the dog ate it and that's your
bitcoins gone right we don't want to be
in that sort of world so the problem of
what to do with the private key is a
serious problem okay
and I'm not sure that putting it on the
blockchain solves the problem because if
I put it on the blockchain then the
ownership of the private key that owns
the private key becomes the problem all
I'm doing is moving that problem on one
step I'm not solving the problem in any
way speaking as a member of the general
public and not one of the blockchain
Illuminati that they're in front of me
speaking as a member of the general
public I don't want the responsibility
of managing a private key I don't I want
the private key to be managed by a
regulated financial institution that I
have legal recourse against if something
goes wrong I'd
one the stress of looking after a
private key
I want the bank or somebody else to do
it for me right and have their own
authentication mechanisms for me to
access it so putting the digital
identity on the blockchain that doesn't
feel to me like you're solving a problem
because I've still got the problem
looking out to the other private key so
the third possibility would be what if I
took the virtual identities and put them
on the blockchain now that kind of makes
more sense to me right so I've now got a
virtual identity that comes from ANZ
Bank which says minimal things lit says
basically it says I exist I must have
done right in order to have that virtual
identity I must have gone through kyc
with ANZ so I'm a real person and I have
a bank account that's all it says about
me bit for an awful lot of purposes
that's enough right so now I put that on
the blockchain okay
and when I'm on Ashley Madison Carney
says prove that you're a real person and
I can point to an identity on the
blockchain and say that's me I'm Luke C
I'm a real person
ANZ donor and that could solve some
problems I could see that could work so
if I take the identity transactions that
are associated with that virtual
identity the creation to read the update
the delete of that virtual identity and
I put those on the blockchain now I can
see that we're getting somewhere okay so
now I come to open an account with ABN
ABM want to know if I have an account
with another Bank I point to my account
with ANZ they can just go and look at
the blockchain they'd have to talk to
ANZ because the crud the creation the
reading the update deleting of that it's
all on the blockchain
so now if they want to see for example
does that account still exist or has it
been deleted all they've got to do is
look along the blockchain for that
virtual identity and see if there's a
delete record so it kind of makes sense
to take those identities and put them
onto the blockchain right so we have we
now have the bank looking after my
private keys or associate with digital
identity we have another Bank that's
age of virtual identity that's linked to
that I've put that virtual identity onto
the blockchain but my real identity and
my real digital identity those are
locked away and looked after and taken
care of right you know when I go and
stay in a hotel the first thing I do is
I take my identity I take my passport
and my credit cards and I lock those up
in the hotel safe when I go out for
dinner I just take a prepaid card that
doesn't have my name on it
I keep my identity locked up and for
transactional purposes I use something
else and I think this takes us in that
direction okay so for the final part of
the presentation I want to answer the so
what question so I can store my virtual
identities I can store the crud of my
virtual identities on the blockchain so
what I can store them in a database I
can store them in the bank what are you
guys going to do differently with this
kind of identity that we couldn't do
using other technology and my answer is
this right if you look at my model of
the shared ledger I divide the shared
ledger into two parts we have the
communications the content consensus
that we talked about last year and on
top of that we have the appalling lis
badly mislabeled contract layer right I
hate the word contract they're not
contracts if they were called someone
else we'd never have got into this mess
with a theory i'm in the dao they're not
contracts and they're not smart
contracts is a stupid word for
distributed applications but i've kept
it because it begins with c and so it's
easy it's easier for everybody to
remember the model if they will begin
with C if you're understand one point
now my point is there's a break between
the bottom layers and that top layer
which I call the Bouvier Sam's boundary
so the bottom layer is about the shared
ledger but the top layer is about the
applications we're going to run on the
shared ledger the bottom three layers
are about this new kind of computer that
we've created the consensus computer
that we've built using these
proof-of-work protocols or other
consensus protocols other ways of
managing practical byzantium fault
tolerance what we've effectively
is a new kind of computer the consensus
computer and on that new kind of
computer we can run a new kind of
application the shared ledger
application now my point is that if
we're going to do something really new
and really different in this space we're
going to do it through those
applications those applications are the
new way of doing stuff what does that
mean for my model well I'll give you the
example here's how I'm going to
influence my shared ledger so I've got a
shared ledger of identity transactions
so those entries are the crud that go
with the virtual identity is the
creation update read and delete if the
virtual identities we're actually going
to implement that in a real way we could
implement it in lots of different ways
I'm going to implement it in a
blockchain because that's what the
conference is about
so I map my entries up here down to
entries in a real blockchain this is
exactly how the block stream identity
layer works this is a very good way of
doing it in other words you build
applications that use the shared ledger
for identity the virtual one and then
you have different implementation
choices about how you want to put it
onto real shared ledger technologies or
blockchains
and so here's my point so when you
actually do the create the see when you
create one of these virtual identities
and you put it onto that shared ledger
you're really creating two things you're
creating the ledger entry itself which
contains that virtual identity or an
encrypted version of that virtual
identity and you're creating the smart
contract entry that goes with it okay
and so my suggestion to you the model I
want to leave you with is what if we
built I'm going to use the example of
kyc what if we build our identity
interactions on the basis of this right
not the identities themselves so in
other words if connie wants to know
whether I'm over 18 what really happens
under the hood it may not look like this
in her mobile app but under the hood her
smart contract is sending a transaction
to my smart contract and my smart
contract is responding appropriately
right so there are certain questions
that my smart contract will accept are
you over 18 is one of them and it will
respond back to Connie with a yes or no
and the shared ledger can have access to
on ledger data the virtual identity
itself which might be an encrypted form
or it can have access to off ledger
databases which the smart contract knows
about and can have access to but are not
themselves present on the blockchain so
here's the point of the model what we're
putting on the what we're putting on the
ledger is the crud of the virtual
identities and the way we access them is
through the appalling Lemus named smart
contracts okay right so I want to finish
with a practical example I haven't got
any time for breakfast example I should
have put that picture in MIDI that's
that's a real picture I like using this
picture in security talks that's because
I had a meeting at a bank and in it and
it's a real picture this is a meeting at
a bank and it happened to be on the same
day that there was like a g20 or g8 or
g6 or g9 or something and and there were
protesters out in the streets protesting
about things in general I don't know
what specifically they were protesting
about it was somebody with you and so
the bank sent us an email to say please
don't come to the meeting today wearing
a suit because it will inflame the
protesters right which you could
understand I mean I look pretty good in
a suit
you got to if I was a protest right
being flamed by this wouldn't you it's a
Ralph Lauren of course you're being
cause you'd be upset by it so so I
thought well the way to not inflame the
protesters then would be to go dressed
as a protester I thought this would be
the most sympathetic thing I could do so
I went dressed completely in black from
head to toe I was wearing black gloves
dark glasses black burr I went
completely in black from head to toe and
I walked into the bank and said oh I've
got a ten o'clock with whoever
and they let me in look there's the
visitor's pass they gave me to say so my
point is the reason it that's not the
security that we want like that's not
real security that's pretending it's
security
all right you know I signed the visitors
but I could be anybody I'm dressed as a
protester folks it's because we're
English if you say if you politely ask
too late
it doesn't matter if you're dressed as a
terrorist if you're polite people will
let you in that's the English that's the
English way we don't want that security
we want real security right we don't
want no looking at driving licences or
whatever we want some real security and
my suggestion to you is it's plausible
at least that the shared ledger will
imply that the shared ledger will
implement that real security and if we
think carefully about the identity model
and the way that we implement that using
the shared ledger we can have real
security and real privacy it's an
attainable goal if we're smart thank you
very much for listening
did I understand that you really still
see a role of financial institutions and
banks and help you to help us to have
all this mirrored of identity levels
suitable to to handle those I I think in
the future a bank will be a place where
you store your identity not your money
and the money will just be a store money
anywhere money's not important but your
identity is important that's why you
want to store it in the bank
okay David Burridge thank you