Yesterday, we saw a huge announcement from the leading cryptocurrency exchange in the United States, Coinbase, who are now embarking on a year long study that aims to totally transform the way users of blockchain technology control their data and personal information.
One of the biggest ironies in cryptocurrency is that whilst transactions are anonymous and hidden in most instances, the actual buying of cryptocurrency through registered exchanges like Coinbase require users to give up a lot of personal information, including images of their Passport or identification, as well as giving up contact details and in some instances, even bank details.
Also known as ‘Know Your Customer’ the problem here is that signing up to exchanges is time consuming and quite complicated. Once a user submits this information, it then needs to be checked out for legitimacy, so often it can take days for an application to use an exchange to be approved, assuming you meet all the stringent anti-fraud checks.
Another issue this presents is that exchanges and wallets then need to securely store all of this personal information, meaning they are vulnerable to data hacks going forward. This, is a concern for the exchanges themselves and their customers. Data handling is a hugely sensitive subject in the news at the moment, we only need to look as far as Facebook and Cambridge Analytica to see why too.
So, it really is within the best interests of Coinbase to try and simplify this whole procedure, whilst adhering to important anti-fraud checks and laws. This is where blockchain technology comes to play.
First reported by CoinDesk, Coinbase have established a research team, led by B. Byrne, the Product Manager of the Coinbase identity team.