Co-CEO, Fluree PBC. Co-founder, Silk Road Technology.
Verifiable credentials, which provide a system for provable electronic facts and documentation through cryptography and public keys, can seem like an abstract concept. We’re so used to seeing our credentials printed out – the driver’s license, the passport, the insurance card – that sticking codified IDs on a thumb drive or online seems odd and unnecessary. And as anyone who has used a cryptocurrency wallet can attest, the early forms of such decentralized IDs are hardly user friendly.
Just as cloud computing and big data seemed initially vague, then ubiquitous, so verifiable credentials promise to appear in our daily lives in the not-too-distant future. (My guess is they’ll pop up in your Apple Wallet one day, and then become normal).
In fact, several industries are already digging in. Here are some of the most visible and promising use cases.
As the economy continues to digitize, workers must adopt new skillsets -- and not necessarily as part of a four-year college degree. As coding bootcamps prove, students can attain employable skills within a matter of months. Yet there is no standardized way to validate candidates' skills, outside of a paper degree or certificate.
96% of employers use at least one kind of background screening, according to a Global HR Research survey. At $20-$200 per candidate, the costs quickly add up. It is also an outdated process. The entire point of background checks is to attain trustable, verifiable information about a candidate, something that a verifiable credential could do for cents on the dollar.
Verifiable credentials could also host the gamut of employable skills, from cash register experience to cybersecurity coding. Such credentials currently exist only on the resume or LinkedIn profile, and are unverifiable unless an employer calls a reference that the candidate listed. Graduate or transfer schools face the same problem when requesting transcripts. Verifiable credentials would, for the first time, provide a foolproof way to tell if skills or classes taken are real.
Just-in-time verifiable credentials take the concept a step further by enabling recipients to monitor credentials over time. A company that hires a college intern, for example, might require a 3.0 GPA over the course of a year-long internship. The school records office could automatically send over the student's GPA every semester for the year. Or a lab could automatically send drug-test results for an employee whose role requires monthly testing. Such verifiable credentials are in the very early stage, and privacy concerns must be addressed. But they are yet another promising use case for the education sphere.
The US has received $2.42 trillion worth of goods at its borders so far this year. Of that, over $1.3 billion was seized, whether due to counterfeiting, safety violations or other concerns.
It takes the same amount of time to review all goods, whether safe or dangerous, counterfeit or authentic. US Customs and Border Protection (CBP) is better off applying manpower to shipments that are higher-risk, while letting in low-risk items with minimal effort. This is especially important for agriculture. It can take days to figure out if a shipment of perishable fruit, for example, contains a pathogen, and by then, entire loads could be lost.
Verifiable credentials promise to solve such border-related problems by providing a trusted digital catalogue of information for each part of a shipped good. They can be used by supply chains in a stacked way, similar to Russian nesting dolls.
Take a metal car door as an example. The first step might be a smelter in Poland. The person in charge of the smelting project obtains a verifiable credential when the load is completed for shipment to Great Britain, where the car doors are stamped. Once complete, the British manufacturer attains a verifiable credential that follows the one in Poland, and the doors are then sent to a BMW plant in Germany for assembly. Once assembled, the German plant adds third verifiable credentials, and then the load is shipped to the US, where the shipping containers get their own credential. CBP can then unstack all the virtual nesting dolls, and determine everything they need to know about parts, tariffs, safety, counterfeits and so on.
Cars already come with a pile of credentials and certifications: insurance, registration, service history, VIN, title, emissions records and the driver's license. Parking tickets, speeding tickets, fast-lane transponders add another layer of identification.
For now, middleman services such as repair shops, car reports and the DMV certify each vehicle's information. Verifiable credentials could put all of a car's information in one place, with the driver sharing selectively, depending on the type of request. Newer types of connected cars could even contain verifiable credentials within the vehicle itself.
This becomes especially poignant given that Millennials, the largest generation in the US, and Gen-Z behind them are buying fewer cars (specifically, they are buying cars later and driving them longer). Meanwhile, the car sharing market is expected to grow 24% between 2020-2026.
Verifiable credentials promise to play a starring role, not only in providing a record of who's at the wheel and when, but in terms of law and policy. For one, verifiable credentials prove the safety and roadworthiness of a car, by keeping its records accessible in one digital place. If a car is in a traffic violation, verifiable credentials prove who was there at the time.
Vehicle ownership is also a big tax revenue item for states. If fewer people own cars, taxes disappear, and roads and infrastructure lose funding. Verifiable credentials, by tracking miles driven, greenhouse gas emissions, and so on, could create new revenue models.
Many websites rely on ad networks to monetize. That model is increasingly showing its limits. Revenue-oriented algorithms feed societal divisions by selecting for what the algo thinks will generate the most money. An increasing number of people find targeted data collection invasive, and employ ad blockers and other privacy tools as a result.
The model is even expensive for advertisers. Half every ad dollar is taken during a transaction. Social media companies such as Facebook collect click, like, and other psychographic and demographic data to build a profile of likely spending habits. That data is then sold to companies wishing to target you.
Despite advances in data collection and targeting technology, results are hit or miss. There is a tendency to see an item advertised that you already purchased, or items that you would never dream of buying.
Third-party data is behind this – the educated guess that Facebook et. al. employ when selling data about your online interactions. First-party data, which you provide yourself, directly to advertisers, would fix this problem.
Verifiable credentials, by anonymizing and proving your identity, would enable you to sell your data, for a price, directly to advertisers. You’d get a paycheck and advertisers would have first-party targeting data (they would sell you stuff you would actually buy). The middleman would be cut out, and both sides would profit.
Real estate is rife with potential for verifiable credentials. Realtors, for one, try to target potential buyers and sellers on specific criteria. Selling data directly to them, via the process mentioned above, would enable better targeting, as well as cash in your pocket.
Mortgage companies, meanwhile, conduct due diligence on employment and pay records. It is not an employer’s business to know whether an employee is applying for a home loan. Verifiable credentials could prevent employers from knowing. A pay stub could be transformed into a verifiable credential, enabling lenders to validate claims of employment without bothering the boss.
Verifiable credentials could also be used during the inspection and appraisal processes, validating who was there and when. They could be used as digital titles. In such a money and trust-intensive transaction, there is an opportunity to transform the entire industry.
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