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Making a hash of it

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I’m having lots of discussions about tokenisation and cryptocurrencies, and it often boils down to hashing the data. Hashing data is taking the source information which may be your account details or card information and shortening it into a machine-readable link that doesn’t share the original data. It’s a little like when I tweet a link and it gets shortened into an address that links to the original but is not the original address.

This is obviously useful for payments and account information as it means you can share the data without offering the actual details, keeping all secure. It’s even more important when it comes to digital identity schemes, as you want to avoid compromising your details.

This gets into a complex discussion about the best form of identity scheme. I’ve seen many developing from Evernym to RippleNami to the work in Estonia to even the gorilla called IBM. What these developments have in common is self-sovereign identities that you own, recorded on a distributed ledger and shared as a hash on an as needed basis. No one owns your identity except you, and when you share your identity it is provided to those who need access as a truncated and encrypted version that only shares the part of your identity that needs to be accessed at that time. You never give your whole identity and never share your identity data. The fact that it is decentralised protects it, and the fact that it is shared as a hash secures it.

However, one thing that these schemes do not have in common is blockchains. I wrote a while ago (2016) about digital identity and blockchain, and have realised over time that a lot of what is being developed in the digital identity field has a lot to do with distributed ledgers but not necessarily related to blockchain. In fact, some claim that blockchain is meaningless:

While most people would agree that a blockchain is a digital ledger, many blockchains do not have an associated cryptocurrency and are not recorded publicly. Some would even argue that a blockchain needn’t be digital.

In fact, some blockchain-related discussions have nothing to do with blockchain, depending upon how you define it. For example, Estonia’s system actually predates blockchain. It began in 2007, over a year before Satoshi’s bitcoin paper appeared. David Birch in discussion with Estonia’s CIO, Siim Sikkut, shows that Estonia’s system is actually not a blockchain:

“I asked him where this ‘Estonian blockchain ID’ myth came from since I find it absolutely baffling that this urban legend has obtained such traction. He said that it might be something to do with people misunderstanding the use of hashes to protect the integrity of data in the Estonian system.”

It just shows how confusing this space can be. However, there are two schemes that intrigues me today. One is in Finland and the other is in Sierra Leone.

In Finland, there has been an influx of refugees. Not a huge number – just over 40,000 between 2014 and 2017 – but in a country of 5 million people 40,000 is a reasonable number. The World Economic Forum noticed what was happening in Finland and recently reported on it:

For those granted asylum, key challenges remained. Without identification papers, they faced a long wait to get work permits or bank accounts. And without access to financial services, they couldn’t bank their wages, pay bills, or start to recover their identities. So one Finnish start-up came up with a solution.

MONI has developed a prepaid debit card that circumvents the need for a bank account or identity papers. The card is linked to a unique digital identity stored on a blockchain — the same technology that underpins Bitcoin and other digital currencies.

Two years ago, MONI partnered with the Finnish government to provide refugees with their monthly allowance, which until then had been paid in cash. The cards mean that the refugees can also receive money — including salaries when they get jobs — and pay bills, without the need to open a bank account.

MONI is using Ripple and Stellar for sending and receiving euro tokens along with the , an Ethereum-based system. This is linked to the Finnish immigration authority’s system, an Ethereum based service that enables third parties proof of card program compliant identity without revealing the customers true identity to any third party.

The other digital identity scheme I find of interest is the RippleNami developments in Sierra Leone.

RippleNami provides a cloud-based blockchain data visualization platform that allows a low-cost digital identity scheme to operate for emerging and developing markets. In September 2017, they signed a deal with the President of Sierra Leone to roll out a nationwide digital identity scheme.

The reason why RippleNami intrigues me is that I blogged two years ago about the United Nations Sustainable Development Goals (and an update in January 2018) , that discussed the idea of a prototype being developed by Accenture and Microsoft. Interesting as, whilst the big guys develop a concept, the small guys are rolling out the solution.

Watch that space.

Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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