A Letter from CMO: Let’s talk about Verifiable Credentials

Dear Reader,

It’s an absolute pleasure to e-meet you. My name is Anastasiia, the CMO of PureFi, and today I would like to talk to you about one of the building blocks of our project, a Zero-Knowledge Proof method.

The beauty of cryptography lies in endless opportunities in so many different ways. Even the ones you might not have been aware of yet or those you didn’t know where else to apply to.

I would like to dedicate today’s story to a situation that I’ve stumbled upon recently when traveling to London.

Perhaps some of you, just like me, likes or at least once has found themselves walking into a bar for a glass of wine and some me-time. No friends, phone on silent, just you and a sparkling glass of Shiraz.

I sat down on one of the bar stools standing in front of the bar counter and was immediately greeted by a bartender and asked whether there was anyone who was going to be joining me later that night. Once the negative answer followed, the bartender threw a couple of silly jokes with an underlying flirty hint — not cool.

Before I received the drink I ordered, I was asked to show the ID card confirming my legal age. Since our conversation started on the wrong foot, I wasn’t keen on disclosing my real name for obvious purposes. The only thought I carried in my had was “Gosh, how can I get to confirm my age and avoid receiving a potential trail of messages on my social media? How come I get no issues even when transferring money in DEXs but this situation now seems almost impossible to avoid? ” And then I imagined what would happen if this situation occurred in the world of DeFi and how it could have been handled.

If I felt like I had a reason not to disclose my personal information but the DeFi bartender had to do his job and check my legal age before I could issue a transaction, I would simply pass my Verifiable Credential (VC). It would cover all the information required for legal purposes, yet not disclose my details. Sounds too good to be true, right? Let get into details and figure out if it’s possible.

The truth is, digital security is so much more advanced than what we face in real life.

On one hand, some institutions need to know who you are. On the other hand, there are some places where data sharing and its retention can be and should be cut down.

Here at PureFi, we know how to take care of it.

Apart from specializing in anti-money laundering (AML), we at PureFi.io also deal with KYC data protection by implementing a Zero-Knowledge Proof method.

Zero-knowledge techniques are mathematical methods used to verify things without sharing or revealing underlying data. These protocols are probabilistic assessments, which means they don’t prove something with the complete certainty that simply revealing it would. Instead, they provide small pieces of unlinkable information that can accumulate to show that the validity of an assertion is overwhelmingly probable.

Let’s see how it’s done behind the scenes.

Imagine you need to prove to a bartender that you are 18 years old or above and you don’t have any verifiable documents on you. What a DeFi bartender can do in this case is use Zero-Knowledge Proof. The bartender would ask you if you graduated high school, whether you have a driver’s license, or like 80s music. Maybe if you read certain classical books, etc. All the given answers can be proved by some digital hard evidence. After a certain amount of such questions, your age threshold can be verified with high probability.

“Zero-knowledge is probably the most useful technology we’ve got, and we’ve barely begun to use it,” Johns Hopkins’ Green says. “There’s a lot more than we can probably figure out to do with it, but at the moment we’re just groping around.”

Main Take-Aways:

• The tangible credentials everyone uses — passport, driving license, birth certificate, high school diploma, etc. have now become digital;
• A copy can be edited but a VC cannot be changed;
• Consumers have a safe and secure way of interacting with the world of DeFi without disclosing the unneeded personal information, offering a universally trusted document, thanks to a Zero-Knowledge concept;
• VC via the Zero-Knowledge method has the power of improving trust and accountability and help to avoid fraud.