Civic

About Civic

Civic is a promising startup pioneering decentralized identity verification technology. The company was founded in 2017 by serial entrepreneur Vinny Lingham, who previously founded Gyft and Yola. The goal of Civic is to enable secure and private identity verification using blockchain technology. This could eliminate many of the security risks and costs associated with traditional centralized identity systems.

Overview of Civic’s Identity Verification System

The core of Civic’s offering is an identity verification system that gives users control over their personal information. Civic uses blockchain technology to encrypt identity attributes like names, addresses, and dates of birth. Users can then selectively disclose specific identity attributes to service providers for verification purposes, without revealing any other personal data.

Service providers pay Civic tokens (CVC) to validate identity attributes, and this validation is recorded securely on the blockchain. No centralized databases are needed to store personal data. This approach offers enhanced privacy, security and control compared to traditional KYC models. According to Civic, it could reduce identity fraud by over 90%.

How Civic Uses Blockchain Technology

Civic leverages blockchain technology in several clever ways. User identity data is encrypted and stored in decentralized identifiers (DIDs) on the blockchain. These DIDs point to off-chain storage locations where the encrypted personal data is held. The blockchain also records a timestamped history of identity validations.

Smart contracts enable Civic to facilitate on-demand, secure identity checks between users and service providers. Parties exchange CVC tokens per the contract terms. This decentralized approach eliminates central points of failure that could expose personal data.

Civic Token (CVC)

The Civic platform revolves around the use of CVC, an ERC-20 utility token. CVC is used to compensate identity validators and pay for identity checks. Users stake CVC tokens to serve as validators. The more CVC a validator stakes, the more verification requests they can handle.

CVC also incentivizes good behavior. Validators get their staked CVC slashed if they are found to verify inaccurate identity data. This cryptoeconomic model aligns incentives for accurate, secure verifications.

Using Civic for KYC Compliance

Know Your Customer (KYC) regulations require businesses to verify the identities of their customers. This is often a costly and time-consuming process that involves manual document checks. Civic offers a more efficient KYC solution using blockchain-based identity verification.

With Civic, customers can securely store validated identity attributes like names, addresses, and dates of birth on the blockchain. They control access to this information using private keys. When a business needs to verify a customer’s identity for KYC, they simply request the necessary attributes.

The customer can grant permission for a one-time disclosure of only the required KYC details. This allows businesses to confirm identifying information without ever seeing or storing sensitive documents. Customers avoid handing over more personal data than absolutely necessary.

All identity validations are recorded on the blockchain, providing cryptographic proof of compliance. Smart contracts also enable automated KYC checks and regulatory reporting.

By streamlining identity verification, Civic can help businesses reduce KYC costs by up to 90% while also improving customer privacy. This makes Civic’s compliance solution appealing for any company that must collect customer information to meet KYC regulations.

Partnerships with Other Companies and Organizations

Civic has formed partnerships with other blockchain projects, cryptocurrency companies, and traditional service providers to expand adoption of its verification system.

For example, Civic partnered with Anheuser-Busch on a promotional campaign that verified users’ identities before distributing free beer. It also integrated with voting platform Voatz to enable identity verification for mobile voting.

Civic recently partnered with Big Four accounting firm EY to provide decentralized identity solutions to EY business clients. Such partnerships lend credibility and signal real-world application of Civic’s technology.

Criticisms and Controversies

Civic has not been without its critics. The company faced blowback after disclosing a security incident in 2018 that exposed about 1% of Civic wallet addresses. However, Civic responded promptly by notifying users and working with blockchain security firms to investigate the breach.

Others have questioned whether Civic’s model truly keeps personal data private and secure. The validity of Civic’s approach likely hinges on honest actors and the maturity of encryption standards. Only time will tell if the technology lives up to its promises.

The Future of Civic and Self-Sovereign Identity

Civic’s vision is an identity ecosystem where users control their personal data and can securely share it in a decentralized manner. This aligns with a broader push toward “self-sovereign” identity enabled by blockchain technology.

Wider adoption of verifiable credentials, decentralized identifiers, and zero-knowledge proofs could make Civic’s model more robust and privacy-preserving. But regulatory uncertainty and blockchain scalability remain challenges.

If executed successfully at scale, Civic could fundamentally change how identity verification works worldwide. It’s an ambitious goal, but the company appears to be on the right track. Civic is one of the most promising and innovative startups working to shape the identity solutions of the future.