A conversation I had with some friends yesterday kind of reminded me of a project I was involved with a few years ago - back when I was still active with the Ethereum community, I had an interesting experience being in the middle of two worlds colliding - the crypto community of its time, and the YangGang - the UBI movement that was popularized by @AndrewYang during his presidential run in 2020. We had all kinds of interesting people in the mix, including one of the original ETH devs, who was there simply because he "wanted to help Andrew".
UBI Coin - also known as the "Proof of Humanity" project - had an interesting premise - was there a way to build universal basic income into a crypto project, in order to foster growth and encourage usage in the system as a whole? Similar to UBI, the idea that having a "minimum" income per wallet, at least in theory. (Increased spending, a less intrusive way to combat income inequality.)
The model itself seemed reasonable enough and was easy enough to implement. All you really needed to do is distribute protocol rewards evenly across all wallets, on a regular schedule. People thought it was at least worth giving it a shot - however, a problem emerged - how were you supposed to limit people's income to one person per wallet and prevent abuse by malicious actors trying to siphon more than one wallet at the time?
So this prompted a big debate about digital identification and the role KYC plays in crypto - using government mandated IDs was the obvious solution, but the anti-censorship crowd argued that doing that would defeat the purpose of cryptocurrencies to begin with, which should always remain un-doxxed. This issue was a dealbreaker for a lot of people, and there wasn't really anywhere to meet in the middle - you're either IDed or not, after all.
So began the "Proof-of-Humanity" project - or you might call it the "Proof-of-Identity" project because that's what it really was. The idea was: Was there any way to conclusively prove that the person behind the wallet address was indeed a person, without resorting to government mandated IDs? They used a combination of social media accounts, search histories, internet activities, and blockchain ledger records to try to create ID systems that were fully digital.
Long story short, the idea failed - and the project fell back to using traditional KYC methods to serve its purpose, and largely gave up on its initial aspirations since it proved to be too difficult and unreliable. (Bots and AI makes it too easy to fabricate online presence, which continues to be a problem today.)
The idea of using digital records to "build" credibility upon itself is not necessarily unreasonable - if only the records themselves were there. The private markets in tech are typically very bad at documenting histories, because old data is routinely deleted to make room for newer things - something that has defined the industry as a whole up until now. Ironically, the reason why this idea didn't go anywhere was because people weren't using the tech as it was designed - even though the solution was sitting right in front of them, the whole time.
One of crypto's big missions is to get people to switch from using emails to wallets as their main point of entry. Emails are disposable, easy to spoof, and costs basically nothing to use - which is reflected in the spam and phishing attempts we see everyday. Rather than leaning into the tech itself, people are still largely using wallets in the same way as emails - ignoring the best parts of the technology and having no differentiation from what came before.
So the "Proof-of-Identity" project right now largely sits in limbo, not quite alive but not completely dead either. Interestingly enough, the folks moving the needle on this dilemma - perhaps unknowingly - are the NFT artists creating works on the blockchain every day. When a collector buys a work from an artist - they want to know if it's "real" or not - owning a plagiarized or copy-cat defeats the whole purpose of the purchase, after all. So what do artists have to do? They have to own a wallet and build credibility over time - some of them making their real-life identities known, some not.
This is kind of another example of the arts being an important part of innovation and creativity, even in places you might not think to look, at first glance. But it is there. Why do I pay attention to what artists are doing in the tech space, rather than blinding following the charts going up and down? Well, that's why. When the crypto markets gets back in touch with its roots, it'll start trying to solve real problems again, prompting the next cycle of growth. Can't wait. 😋