2 years ago
According to Fraser Edward, the CEO and co-founder of the nationalist permissionless network, Cheqd, 1 of the main hurdles faced erstwhile attempting to determination information stored connected Web2 servers to Web3 is “establishing a wide and scalable gross model.” Edward nevertheless suggested overcoming this hurdle volition unlock caller usage cases which facilitate economical activities wrong the Web3 ecosystem volition beryllium unlocked.
The Trusted Data Market
The Cheqd co-founder besides told Bitcoin.com News that successful today’s data-driven world, greater accent is present being placed connected obtaining close and verified data. This displacement successful worth from what Edward labeled generic information to trusted information is evidenced by users’ request for information that is portable and cryptographically verifiable. According to Edward, it is this request for assured information that has fixed emergence to what is present known arsenic the “trusted information market.”
Meanwhile, successful the remainder of his responses to questions from Bitcoin.com News, the Cheqd CEO touched connected the alleged “bot paranoia” and however a decentralized estimation strategy tin beryllium utilized to combat bots and impersonators. The CEO besides offered his thoughts connected blockchain-based re-usable KYCs arsenic good arsenic however these tin beryllium utilized successful the existent world.
Below are Edward’s answers to questions sent to him via Telegram.
Bitcoin.com News (BCN): What is simply a Trusted Data Market and what occupation does it lick for businesses and individuals?
Fraser Edward (FE): In today’s data-driven world, spot and assurance successful information are critical, particularly considering the expanding measurement of data, the emergence of precocious connection models similar ChatGPT, and the rising measurement of fraud. This displacement successful worth from generic information to “trusted data” is characterized by information which is portable, cryptographically verifiable, assured provenance and traceability. Since trusted information has value, recipients volition wage the issuers of the information for that value, incentivising them to supply much trusted information wherever possible.
Let’s see the illustration of a Web3 lender looking to pull caller users from Web2, and clasp existing users successful Web3 by lowering collateral ratios connected crypto loans: Suppose a borrower approaches a lender, either successful the cefi oregon defi space, seeking a loan. Traditionally, lenders necessitate important over-collateralization (>140-200%) owed to the chartless hazard associated with an idiosyncratic borrower.
In a caller scenario, lenders and protocols tin connection appropriately collateralized loans if the borrower provides signals that enactment a perceived simplification of risk. These ‘signals’ are trusted information which whitethorn see on-chain transaction history, societal signals and proofs similar DAO publication history, ownership of real-world assets, and adjacent the borrower’s Web2 recognition people and KYC data. The lender utilizes these signals to measure the hazard of the loan. The much signals the borrower provides, the little the perceived risk.
This enables lenders to connection competitory indebtedness presumption portion maintaining their hazard profile. Moreover, it enhances the ratio of superior markets, stimulates maturation done caller wealth creation, and establishes cryptocurrencies arsenic a viable alternate to fiat currencies. As the indebtedness is repaid, the lender tin supply punctual outgo credentials to the borrower, which the borrower tin stock with different lenders to show bully behaviour. The caller lender past compensates the aged lender and the borrower for these credentials.
Cheqd supports this information marketplace by ensuring the lender (the verifier of the trusted data) tin utilise Cheqd’s outgo infrastructure to wage the Issuer of the trusted information (let’s accidental a user recognition agency) successful a privacy-preserving mechanism. The transaction (the loan) remains trustless, however, the narration betwixt the borrower and the lender has signals that enactment trust, enabling a much businesslike lending marketplace successful crypto whilst retaining what makes crypto lending unique.
Lastly, let’s research the exertion of credentials successful the discourse of DAOs: A DAO commissions an anonymous creator for a circumstantial artwork. The creator successfully completes the enactment and receives outgo from the DAO. The DAO provides the creator with a credential endorsement stating their professionalism, prime work, and timely delivery. The creator tin past anonymously stock this credential with aboriginal projects oregon DAOs erstwhile applying for a job. In this scenario, the caller DAO oregon task whitethorn compensate the erstwhile DAO for the recommendation, arsenic it helps de-risk their hiring process. By leveraging trusted information credentials, businesses and organizations tin heighten spot and streamline onboarding to velocity up work.
BCN: The alleged “bot paranoia” often makes users question whether the idiosyncratic they’re talking to successful the integer satellite is truly who they assertion to be. Can a decentralized estimation strategy lick that occupation for users? If so, how?
FE: A decentralized estimation is built connected assorted signals that lend to its credibility. These signals encompass a wide range, including KYC and liveness credentials, societal media past (such arsenic relationship property and posting frequency), and endorsements from different individuals oregon organizations. Users person the flexibility to harvester and selectively stock these signals to beryllium their reputation. While each awesome could beryllium manipulated individually, attempting to bash truthful for each signals would beryllium highly challenging and time-consuming.
Moreover, since each recipient of the estimation (i.e., the observer) tin prioritize antithetic factors, impersonating idiosyncratic would necessitate covering each bases, adding important clip and effort to the process. While impersonation remains theoretically possible, the time-consuming quality of specified attempts makes it economically unviable. For instance, it would impact maintaining accordant societal accounts implicit the years, demonstrating a regular history, and acquiring endorsements from reputable organizations and people.
BCN: Your institution is said to beryllium gathering a marketplace wherever holders, issuers, and verifiers tin speech and monetize verifiable data. Can you archer our readers who these holders, issuers, and verifiers are arsenic good arsenic however the speech and monetization of information works?
FE: Absolutely. One nuance present is that “holders, issuers, and verifiers/receivers” are roles and truthful often overlap, particularly for organizations. Let’s see an example: An concern DAO employs idiosyncratic to analyse companies and projects for imaginable funding. The DAO gives the idiosyncratic oregon radical credentials truthful they tin beryllium who they enactment for to the companies and projects truthful they tin beryllium trusted and forestall scamming.
In this scenario:
- Issuer: DAO
- Holder: Person
- Verifier/receiver: Bank
Then, erstwhile the DAO has invested, it issues credentials to the institution oregon task truthful that it tin beryllium they are trustworthy and reputable to different investors oregon imaginable concern partners without needing to impact the DAO each the time.
In this scenario:
- Issuer: DAO
- Holder: Company oregon project
- Verifier/receiver: Other investors oregon imaginable partners
BCN: Much of the world’s information is inactive stored connected Web2 servers. Bringing them to Web3 successful a verifiable and privacy-preserving mode could assistance unlock caller usage cases oregon astatine slightest amended the existing ones. What are the challenges of bringing verifiable Web2 information specified arsenic recognition scores to the Web3 ecosystem to facilitate economical activities?
FE: One of the superior humanities hurdles of releasing information to the power of individuals has been the commercialized aspect. Traditionally, companies collect, aggregate, and analyse data, generating gross by selling either aggregate information oregon insights derived from their analysis. Transitioning to the caller information paradigm, wherever individuals person power implicit their ain data, requires caller technologies, which entail costs for businesses. Without a viable gross watercourse associated with these changes, commercialized feasibility is constricted unless mandated by regulations.
Therefore, the cardinal situation lies successful establishing a wide and scalable revenue/commercial model, which is precisely what we astatine Cheqd are straight addressing. Our absorption is connected incentivizing the merchandise of information from existing servers and silos backmost to the power of the individuals to whom it pertains. By solving this challenge, we tin unlock caller usage cases oregon amended existing ones, facilitating economical activities wrong the Web3 ecosystem.
BCN: The KYC process is sometimes seen arsenic a large stumbling artifact successful the fiscal services sector. It tin beryllium clip and resource-consuming and the information tin beryllium fraudulent. Do you deliberation a alleged blockchain-based re-usable KYC tin lick this occupation and perchance amended the idiosyncratic experience?
Absolutely, re-usable KYC is peculiarly invaluable successful Web3, wherever users are highly mobile and prone to switching betwixt aggregate exchanges oregon marketplaces. For example, the European Commission found 21% of survey respondents had switched providers, i.e. exchanges oregon marketplaces wrong the past 5 years, higher than for immoderate different merchandise oregon service, e.g. existent accounts oregon fiat concern products. It did not inquire astir switching aggregate times wrong this play oregon utilizing aggregate providers which anecdotally we cognize astir radical do.
Currently, galore fiscal work providers outsource their KYC requirements to third-party providers similar Onfido, Jumio, oregon Trulioo, who execute the checks and supply the results. As a result, users often find themselves repeatedly providing their accusation to the aforesaid third-party supplier erstwhile registering with antithetic fiscal work providers.
By undergoing the KYC process erstwhile and obtaining re-usable credentials, users tin utilize those credentials with antithetic work providers aggregate times. Implementing specified a strategy would importantly expedite onboarding processes and heighten idiosyncratic satisfaction, peculiarly erstwhile compared to the existent approach. It besides allows radical to usage parts of those integer credentials for different purposes, similar proving they are implicit a definite property to bargain alcohol, baccy oregon lottery tickets for example, without exposing everything successful the credential.
What are your thoughts connected this interview? Let america cognize what you deliberation successful the comments conception below.
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