HID [HypersignID]: Token Utility

The Hypersign protocol will mint 50,000,000 HID tokens. What will be their utility?

The main challenge is to provide IAM at an ‘affordable cost’ to customers in order to disrupt the Identity management industry.

Although this is fairly simple to achieve from a technology perspective, on the business side there are multiple whales trying to consolidate control. For Example, governments, as well as major corporations (Cisco, Microsoft, Gemalto/Thales), charge an arm and a leg to their customers for all these products and features.

On the other hand, we have Facebook and Google (consumer-facing) who literally provide all the Authentication and Authorization services for free. And we all know their business model really well. FB and Google are able to make money by violating user data privacy, this is the only way these organizations are able to give away this service for free.

On the Decentralize side, Sovrin solves some of these problems and also a direct competitor to us. But Sovrin lacks a good token economy. Sovrin has a stewards program

Stewards are organizations and businesses that voluntarily operate the validator nodes running the network after complying with rigorous vetting and agreeing to governance requirements that keep the network independent.

But this steward program is not working because the stewards have no benefit from running the nodes, hence Sovrin is in dire need to have a token model.

So we believe a good token economy can help us do the following things.

1. Paying for credentials

• FIAT is insufficiently fast, affordable, and divisible for the micropayments required for the credentialing outlined in the Sovrin white and yellow-papers.
• Equally, cryptographically secure, on-chain, proof of payment is not otherwise possible on the Sovrin mainnet.

2. Network incentives

• The Sovrin mainnet has no direct incentive to run a node other than the goodwill of Stewards and their requirement for a functioning network to exist.
• Tokens allow block rewards for network maintainers, motivating node operators to keep the network live.
• FIAT is again insufficiently affordable, divisible, and fast enough to be used for block rewards, but the token native as designed is fit for purpose.

3. SSI must be universal, affordable, and non-permissioned

• SSI should be available to all.
• The current Sovrin mainnet demands that its users have a bank account to participate which immediately makes it inaccessible to the world’s 69% ‘unbanked’.
• This makes it in conflict with the ‘identity for all’ narrative and aims championed by the Sovrin Foundation.
• A token has no such barriers to entry and maintains the open and non-permissioned promise of SSI.
• Most importantly this is why any token must be a utility token and not security which would directly restrict who can use it: e.g. in the US for example only accredited investors based on income and net worth.

4. SSI must have very high privacy standards, including in its economic layer

• Value exchange for verifiable credentials enables commercial use cases.
• Without a native network token, value exchange is possible but will compromise the transaction’s privacy and security.

The by-product of good token economics would reduce the cost of credential management which intern will reduce the cost of the IAM solutions.

Currently, with the existing model every merchant needs to pay IAM providers by setting up payment gateways, there are 3 major problems with this.

• It restricts the market to only the highest-value credentials. ( Only rich can have good security)
• it favors the largest providers who are the biggest targets for data breaches (e.g., Equifax).
• it prevents the use of powerful new privacy preservation technologies like selective disclosure that could further protect personal data.

How does the HID token solve this?

• We lower the cost of credential creation/management to a fraction of cents (paise).
• Credential issuers of all types and sizes can enter the marketplace.
• This new marketplace can support GDPR compliant privacy preservation.

Apart from this with respect to privacy, Hypersign zero-knowledge payment protocol helps issuer gain no knowledge of either who is using a credential nor where it is being used — only that the issuer is being paid the asking price in HID tokens.

The verifier can pay for credentials directly from the owner and the owner can do the same with the verifier

This results in a marketplace of trust where the source of truth can be traded effortlessly without giving away privacy.

References

• https://outlierventures.io/research/p-didi-project-did-initiative-an-rfp-for-a-tokenised-ssi-network-based-on-the-sovrin-architecture/
• https://sovrin.org/wp-content/uploads/Sovrin-Protocol-and-Token-White-Paper.pdf
• https://uploads-ssl.webflow.com/5e7b1a27d160ce49af1c24e1/5f1596b2f7b9a32ffb25797c_tokenpaper.pdf

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Hypersign is a product of Hypermine Labs

Authors:
Vikram Bhushan
Vishwas Anand
Irfan Khan

About Hypermine:
Hypermine is an avant-garde technology and research organization that is dedicated to building trust and transparency in the real world.

Using ‘Distributed Ledgers’ as our core technology coupled with ‘Machine Learning’, we are creating digital economies to create a new world for enterprise, government, and consumers.

Our vision is to create a world where privacy is a fundamental right, where our data is secure and belongs to us. A global currency that has real value; where piracy does not exist and freedom of expression is encouraged. Where wealth is shared to reduce poverty and all governance is transparent and trusted to make life better for everyone.

This document is copyright and belongs to Hypermine ©, 2020.
All Rights Reserved.