The Sovrin Foundation, a non-profit organization building online identity management tools with blockchain-inspired technologies, announced today that it will be taken on for incubation by Hyperledger Indy, a project run by the the Linux Foundation.

The problem of identity has attracted a whole flock of developers in the blockchain and distributed ledger space who see these technologies as a way to scoop up all the scraps of an individual’s online identity, consolidate them and put them under the individual’s control.

Today, for the most part, we lack that control. We have surrendered ourselves to the likes of Facebook, Google, Twitter and Amazon, whose profiles on their customers are so extensive that they are now, themsleves, used as standard identity verifiers across most Internet domains. Want to leave a comment? Just sign in with Facebook. Trying to get into your Medium account? Just login with Twitter. 

And if those companies suddenly disappear, so too does your online identity.

Meanwhile, asserting more important things about yourself online is just as difficult as ever. You can efile your taxes, but first you’ll need that PIN from the IRS that you set up a bajillion years ago that somehow proves you are who you say you are. 

It’s a terrible mess. And according to Phil Windley, the chair of the Sovrin Foundation, the best way to fix it is to use distributed ledger technology to make something that looks more like what we have offline. 

“In the physical world I go to my pharmacy and they ask for my driver’s license to prove I’m over 18 and I supply it to them. They don’t have to have a direct connection to the Department of Motor Vehicles. They don’t have to have any kind of API integration to make that work. Because I am the conveyer of this verifiable claim called a driver’s license. That hasn’t been possible on the Internet and Sovrin makes that possible,” says Windley.

In this alternate view, it is the individual who possesses all the pieces of their identity, which ranges from mundane testimonials about what your favorite movie is, to critical information like age and date of birth. 

In Sovrin, these facts about you (or pointers for where to find these facts) would all reside on a distributed public ledger which you alone had the authority to access and share. Other entities, however, could modify your claim by signing off on them with a cryptographic key, thereby adding weight and credibility to the pieces of your identity. For example, you may have an identity on the Sovrin network which specifies your driver’s license number and that information might be signed by your state’s DMV. 

The technology has a slight whiff of blockchain, but doesn’t really have a blockchain. Rather, it is a ledger that is replicated over mulitple nodes that all coordinate to make updates and police the system and which together make up the Sovrin network. The nodes are invite-only, meaning that the ledger is public, but permissioned. As a result, Sovrin functions without the participation of miners, which makes it less expensive and less energy hungry than your typical open blockchain.

Windley says that he envisions the first applications coming from the financial sector. Banks could participate as node operators to maintain the ledger and provide it as the repository for their customers’ identities. If given permission by the customer, multiple banks could access this information in a single place in order to comply with Know-Your-Customer (KYC) regulations. 

In joining Hyperledger Indy, Sovrin is donating all of its code and getting back developer power in return.

There are currently many other groups working in the blockchain and distributed ledger space to build self-sovereign identity systems. Bitnation began using the blockchain to issue its own nation state-independent version of a passport in 2014. That project now resides on the Ethereum network which also supports another identity management tool called uPort. And Civic is building out a similar project on Bitcoin.

Windley doesn’t necessarily see them as competition. “I believe that there won’t be a single identity solution; there’s going to be multiples,” he says. “We’re going to live in a world with multiple identity systems because they have different properties and [meet] different needs.”

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The Spectacular Collapse of CryptoKitties, the First Big Blockchain Game

A cautionary tale of NFTs, Ethereum, and cryptocurrency security

8 min read
Vertical
Mountains and cresting waves made of cartoon cats and large green coins.
Frank Stockton
Pink

On 4 September 2018, someone known only as Rabono bought an angry cartoon cat named Dragon for 600 ether—an amount of Ethereum cryptocurrency worth about US $170,000 at the time, or $745,000 at the cryptocurrency’s value in July 2022.

It was by far the highest transaction yet for a nonfungible token (NFT), the then-new concept of a unique digital asset. And it was a headline-grabbing opportunity for CryptoKitties, the world’s first blockchain gaming hit. But the sky-high transaction obscured a more difficult truth: CryptoKitties was dying, and it had been for some time.

The launch of CryptoKitties drove up the value of Ether and the number of transactions on its blockchain. Even as the game's transaction volume plummeted, the number of Ethereum transactions continued to rise, possibly because of the arrival of multiple copycat NFT games.

That perhaps unrealistic wish becomes impossible once the downward spiral begins. Players, feeling no other attachment to the game than growing an investment, quickly flee and don’t return.

Whereas some blockchain games have seemingly ignored the perils of CryptoKitties’ quick growth and long decline, others have learned from the strain it placed on the Ethereum network. Most blockchain games now use a sidechain, a blockchain that exists independently but connects to another, more prominent “parent” blockchain. The chains are connected by a bridge that facilitates the transfer of tokens between each chain. This prevents a rise in fees on the primary blockchain, as all game activity occurs on the sidechain.

Yet even this new strategy comes with problems, because sidechains are proving to be less secure than the parent blockchain. An attack on Ronin, the sidechain used by Axie Infinity, let the hackers get away with the equivalent of $600 million. Polygon, another sidechain often used by blockchain games, had to patch an exploit that put $850 million at risk and pay a bug bounty of $2 million to the hacker who spotted the issue. Players who own NFTs on a sidechain are now warily eyeing its security.

Remember Dragon

The cryptocurrency wallet that owns the near million dollar kitten Dragon now holds barely 30 dollars’ worth of ether and hasn’t traded in NFTs for years. Wallets are anonymous, so it’s possible the person behind the wallet moved on to another. Still, it’s hard not to see the wallet’s inactivity as a sign that, for Rabono, the fun didn’t last.

Whether blockchain games and NFTs shoot to the moon or fall to zero, Bladon remains proud of what CryptoKitties accomplished and hopeful it nudged the blockchain industry in a more approachable direction.

“Before CryptoKitties, if you were to say ‘blockchain,’ everyone would have assumed you’re talking about cryptocurrency,” says Bladon. “What I’m proudest of is that it was something genuinely novel. There was real technical innovation, and seemingly, a real culture impact.”

This article was corrected on 11 August 2022 to give the correct date of Bryce Bladon's departure from Dapper Labs.

This article appears in the September 2022 print issue as “The Spectacular Collapse of CryptoKitties.”

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