Blockchain-based reusable KYC – The Cryptonomist
Cheqd CEO Fraser Edward explained how blockchain-based reusable KYC would be the “breakthrough” for security in Web3.
The rationale is that it will improve the user experience while unlocking new use cases.
“Blockchain-based reusable KYC is particularly valuable in Web3”: words of Fraser Edward
In an interview with Bitcoin.com, Fraser EdwardCEO and co-founder of the public permissionless network Cheqd, talked about blockchain-based reusable KYC, describing it as “especially valuable in Web3.”
Specifically, Edward talked about how the mandatory process of identifying and verifying a customer’s identity when opening an account, KYC (or Know Your Customer)would become more efficient and reusable if it were blockchain-based.
In this regard, here are the exact words of Cheqd’s CEO:
“By going through the KYC process once and obtaining reusable identification, users can use these credentials with different service providers multiple times. Implementation of such a system will significantly speed up the onboarding processes and increase user satisfaction, especially compared to the current approach.
It also allows people to use parts of the digital ID for other purposes, such as proving that they are over a certain age to, for example, buy alcohol, tobacco or lottery tickets, without revealing everything in the ID.”
Edward also talks about the European Commission’s survey which showed that 21% of respondents have switched markets or exchanges in the last 5 years, with a lower percentage switching current accounts or spot investment products.
Not only that, many of the financial service providers outsource their KYC requirements to third-party providers such as Onfido, Jumio or Trulioo, who perform the checks and provide the results.
This means that every time users must repeatedly provide their KYC information directly to the platforms they modify or to the third-party providers handling this part.
Here is where a blockchain-based reusable KYC would streamlining the entire traditional processin addition to unlock new use cases.
Reusable blockchain-based KYC and Trusted Data Market with Cheqd
In addition to talking generally about the benefits of blockchain-based reusable KYC, Edward also talked about the Trusted Data Market, Cheqd’s market is infrastructure.
Initially, Edward explained how in this data-driven world, trust and security of data is essential.
It is a shift in value from generic data to “reliable data” characterized by data that is transportable, cryptographically verifiable, with guaranteed origin and traceability. And actually more reliable data, the more customers are willing to pay to get it.
“Reliable data” also means the “signals” that support risk reduction with respect to lending i DeFi.
And so, such data can include on-chain transaction history, signals and social proof such as DAO contribution history, real-world asset ownership, and even Web2 credit scores and borrower KYC data.
In this scenario, the lender (verifier of reliable data) can use Cheqd’s payment infrastructure to pay the issuer of trusted data (for example, a consumer credit bureau) in a privacy-preserving mechanism.
With Cheqd, the transaction (loan) remains untrustedbut the relationship between borrower and lender has signals that support trustwhich enables a more efficient crypto lending market while maintaining what makes crypto lending unique.
Cheqd: nominated for startup of the year
Taking a look at Cheqd’s official Twitter profile, the startup continues its expansion, communicating its presence at several conferences.
Not only that, HackerNoon’s famous technology open community has nominated Cheqd as the startup of the year.
As the company tries to make itself known, the CHEQ token is trading at $0.054 at the time of writing. A 10% dump from a week ago price of $0.060.