Is Identity on the Blockchain a Good Investment?

Does Identity Matter?

Is Identity a Good Investment?

One of the areas seeing tons of investment in blockchain is Identity. We don't think much of identity in the US because we have birth certificates, Social Security numbers and many different ways people identify us including phone numbers and email addresses.

But for most people in most countries, they don't have these methods of identification. The problem for us here in the West is we are identified by means that are unsafe and not supportive of Identity like cell phone numbers. This Inc. post and this Medium post are just 2 recent examples of hacking a cell phone number that was used as a 2nd-factor authentication for better security. The number is ported away from the owner, who is then hacked with Bitcoin stolen.

If you think companies are adequately protecting your data, think again. From US cell phone carriers like these examples above to Facebook to the huge Equifax hack to the hack at Quora & Marriott, companies are not doing enough to protect your data.

So Westerners want a better, more secure identity with control over who gets access and when, while the rest of the world wants a quality identity they can use in their country and outside of it.

We have an environment where people and businesses are more mistrustful of people that hold their data. Group that with an environment where people want to invest in blockchain and we could have a recipe for a successful investment.

Investment in Identity

Two of the first cases that come up on investments in blockchain for identity come from the EU and Microsoft. The EU is looking at Ethereum and ETH development group Consensys to develop 'user controlled self-sovereign identities for its citizens.' The EU admits that building these types of identities while protecting data in centralized (read: government) systems has been difficult and unsuccessful. Yet, this is a worthy goal to pursue with more decentralized technologies. Microsoft wants to provide blockchain based digital IDs into its Authenticator app that some use for 2FA (2-factor authentication) for better security while storing the IDs in a decentralized manner.

Here are 4 projects making some inroads in Identity. They all have a token or another way you can invest if you like the project.

 

SelfKey

Selfkey is one of the more interesting Identity projects. Selfkey, as the name implies, wants you to own your Identity like you own your private key for your Bitcoin. SelfKey has a wallet for holding your key as well as any and all Ethereum tokens you may have.

Another pretty cool feature is their marketplace where SelfKey aligns with companies that might need your KYC/Identity information like a bank or an immigration office so you can immediately generate a key for them to see your information for a limited period of time. I love this idea.

SelfKey's key token (symbol: KEY) is an ERC-20 token that you can buy.

 

TheKey

 The Key's goal is a completely decentralized identity. They use 'multi-dimensional Identification technology.' TheKey is working closely with the Chinese government (see Announcements page) on how to properly identify the almost 1.3 billion people in China, a tough task.

TheKey's token (symbol: TKY) is listed on the NEO blockchain. NEO is a Chinese based blockchain, which makes it a smart choice for this China and Asian focused firm. NEO is working to be the "Ethereum of China" if you want to buy this token.

Civic

 Civic might be the best-known project on Identity. It certainly seems that way on Crypto-Twitter. That's because Vinny Lingham is one of the founders. Vinny was also instrumental in the founding, development, and sale of one of my favorite Bitcoin projects, Gyft with Guillaume LeBleu (who was on a panel I ran at a conference a couple years ago). I always liked that project even before I met them.

Civic's goal is decentralized identity, reusable KYC for things like bank accounts and ID codes to verify individuals and/or businesses you are thinking about going into business with like an investment advisory. Unlike the other services we have seen, Civic wants to verify organizations as well as people.

The Civic token (symbol: CVC) is an ERC-20 token that you can buy.

uPort

 uPort is working on reusable credentials for confirming your identity. They are using the Ethereum blockchain as well and want to 'form an identity layer for the decentralized web.'  Like many of the others, part of their goal is to build a system letting others seek, view and manage their credentials with people and businesses they allow.

One major difference is that uPort does NOT have its own token and it uses ETH gas to use its app.

Are Identity Tokens a Good Investment?

Of the 4 projects we looked at here, 3 of them have their own token and one does not. Are these tokens a good investment? You could show your support for uPort specifically, and really the 3 projects here that run on Ethereum by going long ETH and holding as an investment. Maybe you have some already, maybe you don't. If you like Identity, then Ethereum is an investment to consider.

For the other 3 tokens, let's take a look: (in all the charts the green line is the USD price)

SelfKey went from 3c and a market cap of $69 million in January of 2018 to its current price of 0.26c and a market cap of $6.8 million. While the crypto bear market is affecting everything and ID tokens are not excluded, as you can see from the chart, prices have been pretty steady since August.

TheKey went from 2c  and a $95 mill market cap in May 2018 down to 0.2 c and a $9.8 million market cap today.

 

Civic went from a high of 47c in May 2018 with a market cap of $161 million down to its current price of 5c and market value of $18 million. It's held up pretty well during this 'crypto winter' that everyone is talking about.

 

You can see from the charts that no one is immune from the bear market in cryptocurrencies. It can also mean that more research by you on one of these projects could mean you are buying at a discount. Digital Identity and control of your own data is one of our big questions moving forward and is the reason why blockchain is getting so much investment in this area. Are any of these going to be the winner? or maybe a project that hasn't been created yet? If you think Identity is important, then these projects are worth a look to see if they fit into your crypto-portfolio somewhere.

Lastly, as a disclaimer, at the time of this writing, I don't hold a position long or short in any of the projects mentioned.

About the author

Stu Stu Lustman, the author of this post, is a Credit Analyst by trade trying to bring Commercial Credit Analysis techniques to the world of Peer to Peer Lending. Check me out on Twitter, LinkedIn and Google+

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.