Why I’m Building an Optional Identity Verification Service Next

The EarthBucks blockchain was launched on November 4, 2024. Currently, we have approximately one hundred daily active miners. All miners are using consumer GPUs, as intended. There are still important pieces that need to be implemented, particularly the wallet and the p2p network. However, I have decided the next most important piece is the (optional) identity verification system. Here is why.

Mining Advantage

The top reason I want to build an identity verification system now is to enable verified individuals to get a mining advantage of up to 10x. The way this will work is that if you verify your real-world identity, you will get 10x as many shares per swipe, and therefore 10x as much EBX per block. Obviously, this feature requires some kind of real verification, because if I simply asked “are you real?” all the bots would say “yes”, and the mining advantage would mean nothing. There must be a real-world identity verification system in place to make this work.

Recovering Lost EBX

The second reason is because users lose their private keys all the time and need a way to recover their EBX. Having built or worked on several Bitcoin and cryptocurrency wallets in my life, it is apparent that even the most sophisticated users will lose their keys and need a way to recover. For this reason and others, I have added a recovery feature into the standard scripts used on the blockchain. The way this works is that UTXOs that are not cycled by the user become accessible to a recovery service (currently, earthbucks.com) which will either send the EBX back to the user’s current keys or to a new set of keys that the user can activate by proving their identity. When a user loses their keys, which will inevitably happen on a regular basis for many users, they will be able to re-verify their identity and initiate the recovery process leading to full recovery of their EBX (possibly minus a fee to be determined).

Preventing Sybil Attacks

The third reason I want to build the identity verification system is for all the other features that make sense for individual users where sybil attacks may be a problem. Consider the Block Messages app where users can post messages. I want to allow users to post long messages with links, but if I don’t verify identity, this is likely to get filled with spam. By verifying identity, I can throttle the total message volume, and if someone breaks the rules, I can ban them, and the ban actually means something. If there were no identity verification, it would be impossible to ban bots, because they could sign up again with a new account. Fundamentally, identity verification is necessary to prevent sybil attacks.

Enable a Referral Program

Similar to all other features that can be sybil attacked, I want to add a referral system where I will pay users to refer new users. Because the funds for the referral program will come from my business, not the users, it is important that all users are real. If I don’t verify identity, the referral program will be sybil attacked and will not work. In other words, scammers would refer themselves and steal money. To prevent this, all participants in the referral program must verify their identity.

Future Regulatory Reasons

I’ve done everything in my power to limit the need for regulatory compliance for the launch version of EarthBucks, but over the long-term I will need to comply with regulations pertaining to money transmission and other areas in order to add certain features to EarthBucks and other apps. Regulatory compliance will require identity verification for users to gain access to these new features. For example, many countries around the world limit cash transactions with no identity verification to approximately 200 USD. Users who wish to send more than this, depending on their country of origin, may be required to verify their identity. For this reason, I want to build the identity verification system now so that it is in place when I need it.

Scare Crypto-Criminals

The term “KYC”, which stands for “know your customer”, is a scary term to criminals in the cryptocurrency industry who try to use cryptocurrency to evade the law. I have no interest in serving criminals, so being upfront about the use of (optional) KYC will help to curate the culture of EarthBucks away from crime. Criminals should be aware they are not welcome here, and all regulations pertaining to identity will be followed, which may mean that criminals are reported to relevant authorities.

Fiat Currency Revenue

As much as I would love to pay for my bills with EBX, the reality is that all of my business bills currently require payments in USD. Thus, setting up a service that earns money via credit cards allows me to pay the cost of hosting the service while the EarthBucks ecosystem is bootstrapped. Eventually, it would be great to pay for AWS or other hosting providers directly with EBX, or at least to be able to sell the EBX into a liquid market and be able to reliably get USD with which to pay the costs, but for the time being the only realistic way to pay the costs is by having a source of fiat currency revenue, provided by a consumer-facing identity service.

Respecting Privacy

The purpose of the identity verification system is to enable features that require identity verification, not to spy on my users. I have no interest in collecting your personal information. I would rather not have to have any of this information, and plan to encrypt all data client-side wherever possible. All identity verification is optional (although it will be required for certain features) and privacy is always respected. Users who wish not to share any verification information will still be able to mine and send EBX, albeit with certain limitations.

Introducing InternetKYC

The new identity verification features will all be hosted at a new service I’m creating at internetkyc.com. The reason why the features are split away from EarthBucks is to create a single location where the user can verify themselves and then re-use that same verification across all EarthBucks apps, or any other apps created by entrepreneurs who use the InternetKYC API. Once you have verified at InternetKYC, you will not need to verify again. For instance, if you verify once for EarthBucks, your same InternetKYC verification can be re-used at Compucha, NinjaButton, and other apps I or others create.

Conclusion

Privacy is critically important to me, but some features require identity verification to prevent sybil attacks or for regulatory compliance. As such, I am building a new service called InternetKYC to build a user-focused identity verification service where all data is encrypted client-side wherever possible and user privacy is respected. The new service is under active development and will be launched and announced soon. Stay tuned.