Influence, the Currency of the Next Economy?
Joe El Rady

With the advent of social media, influence (fame/prestige) has gained importance in many people’s lives—important enough to be monetized (high YouTube followings attract big advertising dollars, high numbers of Twitter followers lead to product placement fees) and even used as its own currency by others (Instagram influencers are invited to exclusive parties etc.).

The importance of influence as at least monetizable if not outright currency will only continue to grow as automation takes over the economy. Economists today study a society that operates due to and under the influence of scarcity. Indeed, scarcity is the founding principle of our economic system. But how might society function without scarcity. A society without scarcity has solved the problem of labor—people no longer need to work to sustain themselves because machines complement work, allowing humans to escape the most dreadful effects of scarcity (poverty, hunger, etc.). In a world where robots do most of the work and replication machines (3D Printers, for example) create many of the goods, the marginal cost of production falls to almost zero, making anything affordable to anyone who works even a few hours per week (or even not at all).

In such a world, no one works to increase wealth; people will only work to increase their reputation, their prestige (their place in the world) and, as such, their ability to influence. Rather than working in order to hoard capital, engage in conspicuous consumption, or obtain the necessities in life, people work to increase their reputational capital. Social media has already provided a hint at what that world would resemble. From Instagram to Vine to Twitter, users expend large amounts of time and energy simply to gain a certain amount of reputation. Clearly, the Internet has begun to demonstrate how much people will work, for no money, just for reputation.

Regardless, of whether scarcity, and therefore money, exists in the future, the monetization of influence and the use of reputation and prestige as currency will. In a capitalistic world with a market economy, influence and reputation can be monetized for FIAT or used as an alternate currency. This alternate currency can exist on the Blockchain, denominated by crypto tokens and coins. In a post-scarcity, post-capitalism, post-money world, reputation serves as the very purpose of work. Furthermore, even in a post-money world, some items will remain scarce (such as rooms at a resort in Fiji). Gaining entry to such difficult to schedule locations will require good reputation, and potentially fame. Therefore, such a future requires an element of connections and building good relations—the foundations of which many have started to build on and through social media.

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Digital ID, the Next World Changing Development
Joe El rady

Identity verification comprises one of the biggest problems of modern technology (and life). The transition to a digital economy requires radically different identity systems. Distributed Ledger technologies, such as Blockchain, may hold the key to solving this vexing and lingering problem.

As financial and other transaction disintermediation accelerates with the advent of new financial technologies and infrastructures, portable, scalable, extensible, verified digital identity will become essential. Consumers will need user centric, verified, hard to forge/counterfeit digital identity verification (what Dick Hardt calls Identity 2.0). Most importantly, every person’s digital identity should be consolidated to one record of truth—all the information should live in one place.

Usernames and passwords (existing frameworks such as OpenID, OAuth and SSO) have not and cannot solve this problem. Passwords do not and cannot identify a person, they can only authenticate a person—they can’t prove that you are you, they can only prove that you are a directory entry.

Furthermore, a significant portion of the world’s population lacks the necessary digital credentials to fully participate in the digital economy. Access to health, banking, and education remains difficult for more than 1 billion people, including refugees and displaced populations, without ID. This issue is currently being investigated by the United Nations, Microsoft, the Linux Foundation, MasterCard, Visa and many others. This problem seems analogous to the land-line telephony situation in the Developing World (given the difficulty of constructing landline telephony networks in underdeveloped places such as rural Latin America and Sub-Saharan Africa, the idea was abandoned in favor of cellular telephony—this is called skipping a generation—indeed, a landline network may never be built in these places). In the same way, given the difficulty of providing paper ID to 1.1 billion people, governments may choose to skip a generation of technology and just give them all digital forms of ID.

Where does Blockchain fit here? According to Peggy Johnson, Executive Vice-President of Business Development, Microsoft: “technologies like blockchain can play a powerful role in creating a secure, portable, personal solution”. Almost everything we do today leaves a digital signature. Yet this signature is scattered among different services that use it primarily for their, rather than our, benefit (creating wide dispersion and narrow segmentation, all of which creates economic value for the services that own pieces of our information—Google knows what we look for, FaceBook knows what we talk about, Apple knows where we go). One main promise of blockchain is to rebalance that dynamic so we can reclaim and consolidate our digital identities.

In reclaiming and consolidating our digital identities, we decide who gets to see what and how much. (A great analogy would be showing a Driver's License to a bartender in order to prove legal drinking age—all the bartender needs to see is the picture and and the birthday, but, in the process, he also sees your address. Blockchain would allow us to share only enough information to verify identity and drinking age, without sharing address and other information.)

In fact, one of the breakthrough features of blockchain is its usage of zero knowledge proofs to manage data. This allows users to disclose their ownership of certain certifications and grant access without revealing the information contained within. The dream of this type of encryption is that end-services can verify identity while the data is hashed. For example, imagine a bank running a credit check on you, while only handling your credit history data in encrypted form, so that even if that data were stolen it would be useless. These zero knowledge proofs provide an opportunity for private companies to participate in digital identification, overcoming government inertia. Companies can, for example, create relay services that take identification verification requests from end users, relay those requests to government server repositories, and then relay the only the positive or negative verification with no further information shared. Finally, beyond identifying and verifying people, Digital ID will need to expand to devices and legal entities with the adoption of the internet of things expected to connect 200 billion+ devices to the internet by 2020.

A consortium of companies, including uPort and Microsoft, recently announced the creation of the Decentralized Identity Foundation. One aim of the DIF is to create universal protocols for identity verification— similar to global standards for financial transactions, or DNS protocols, which transcend borders. The time is ripe now for private industry to step in.

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