Keeping Control of your Electronic identity

Human culture and society in all its diversity is built upon individuals interacting with other individuals. In a similar way that a termite mound is an emergent property of the sum of individual interactions of thousands of termites, so human culture and all of society’s artefacts are emergent properties of our individual interactions with each other. These interactions and the resulting outcomes are vastly more complex than those of termites’, but the principle still remains. Human culture and society are the result of an evolutionary process built upon multiple, relatively simple one-on-one interactions.

This means that if we change the way interactions happen, we will change culture and society.

As cognitive humans we have the ability to determine how we interact and as a society we have the ability to evolve our social institutions to meet our overall needs. We make choices on how we operate as a society and hence our fate is in our own hands. This is particularly important today because our social structures have created the ability for us to destroy ourselves – be it through nuclear warfare, emergent pandemics, or more likely through changing our physical environment so that the earth becomes uninhabitable for our current physical form.

The move to a networked society is changing the way we interact with each other and we must expect that this will result in societal evolution and changes to our culture. The choices we make in how our networked society transactions operate will determine our resulting society.

An important part of any interaction between people is the concept and operation of identity. Our identities are formed and take meaning in our relationships with each other. In a world where there are no interactions there is no need for the concept of identity. When we talk about identity we are talking about the sum of our relationships with others, making identity a critical part of our interactions and therefore critical to our ability to survive as a species.

Given that the way we handle identity in the networked world will have a bearing on the way society evolves, it is important for us to understand what we are doing with identity and to look for the resulting changes to emergent properties. If, for example, we change our transactions so that the participants involved in every electronic interaction we have is potentially known to anyone then the society that evolves will be different to a society in which all transactions are known but the identity of the participants is unknown.

A society where the identities of participants to a transaction is always known will be a society with less cooperation, less interaction and with widespread avoidance and corruption of such transactions. However, for society to evolve we need interactions and in general the greater the number and quality of transactions the greater the benefit to society in areas such as understanding or wealth generation. In developing electronic transaction systems we want to encourage characteristics of transactions that make it easier for them occur.

There is considerable evidence that systems which remove the need for identification are systems that encourage transactions. The invention of money removed the need for identity in trading transactions. The original form of trade was bartering and for this, identity was important. If we knew who was behind the barter, we could judge for ourselves whether we trusted the value placed on it. Later, money provided a way of measuring value and providing trust. The identity of the other party to the trade was unnecessary as trust was put in the currency. This made trading more efficient and so reduced transaction costs, helping to create an explosion in trade and with it the wealth of societies.

When we examine the behaviour of people in online interactive games, in online auctions and in online forum discussions the most successful systems are those that do not require a person to be identified but still give ways for the interaction to be controlled. To see how this is done, try participating in an online community system such as Contract Bridge, purchase something through EBay or join a virtual world game. These systems are anonymous in the sense that you do not need to know any personal information about the other participants. You need to know the characteristics of people but not their identity. The systems have evolved so that games identification is separate from personal identification.

However, when first introducing online transactions, many organisations simply replicate their hard copy processes electronically. A decade ago company web pages were largely static brochures, that is until organisations grasped the dynamic nature of the medium. Electronic systems that evolve from non-electronic systems still tend to require personal identification rather than “functional” identification. The tax office still wants to know who we are. The online store wants to know who we are. The bank wants to know who we are. This need for personal identification hinders and cripples the implementation of electronic transaction systems and is unnecessary. Unfortunately electronic systems enable more information to be collected cheaply and so rather than less identity information being kept there is a tendency for more to be collected as governments and businesses believe it is better to know more about their clients and customers so they can better control the interactions.

Governments in particular are attempting to get more personal information about people. The Anti Money Laundering and Terrorism legislation requires businesses to “know their customers”. The main purpose of the Access Card is to bring together all the information about a person so that the relationship between the government and the citizen can be better controlled from the point of view of the government.

However, these attempts are expensive, hinder the vast majority of legitimate transactions, and will not deliver the desired results. The current approach is for governments to require that organisations know who they deal with so that the government can collate information across organisations and build up evidence against those who are acting outside the rules.

There is another approach to the problem that is simpler and does not compromise privacy. It is based on the idea of a person knowing everything electronic about themselves and being able to supply it when or if necessary. Another way of putting it is for me to control and know about all electronic data about myself.

This approach is remarkably simple, inexpensive to implement and will resolve most privacy concerns. What we do is change the bottom-level transaction rules. Rather than the government requiring organisations to keep track of who I am, I keep track of who I am and all my characteristics and relationships with others and give the information if needed to the government.

In the same way that the invention of money enabled a purchaser to remain anonymous (because the person receiving money could trust the currency) so the invention of a way for me to supply information about myself and satisfy the transaction rules without identifying myself gives a generic, powerful way of conducting transactions that is more efficient and less costly. It reduces the amount of information about me scattered in various databases and paradoxically, it will supply more useful information for decision making.

How the system works

Just as I have one physical presence let us imagine that I have an electronic presence. This electronic presence can conduct transactions on my behalf under my instructions. As with my physical body there can only be one electronic “me” and it is biometrically linked to the physical me.

This electronic me can form relationships with other electronic presences and in particular, with electronic representations of organisations. For example, I decide to get a driver’s license. I use my electronic presence to register that I want to get a driver’s license with the licensing authority. It, in turn, registers that I have applied and acknowledges me by allocating a number. My electronic presence supplies the other information required for me to take a test: that I am over 18; in good health; can see; have not been banned from driving etc. I then take the test and prove that the physical person arriving for the test is the same person as represented by the number. If I pass the test and pay my fee, the issuing authority now says that I have a license and marks my electronic presence as having a valid license. It keeps my number and the fact that I have a validated license in its database.

My electronic presence can now – under my instructions – tell other people that I have a valid license by getting this information from the issuing authority (which keeps the status of the license in its database). My electronic presence does not keep the authoritative data in its database – only a link to where the status can be obtained. Thus information about my license is kept in one place and one place only. When it is necessary for me to prove I have a license I can do so by using my electronic presence to provide the information that I have a valid license (but not provide my license number).

Over time I build up many similar relationships with others. At any time I can sever relationships, providing the rules of the relationship allow this. For example when I buy something from a store I might not want my relationship to last, so it could be cancelled if I wished. Other relationships like traffic offences in a police database might last for 10 years after which time the relationship might end.

Isn’t this just an electronic Australia Card?

The system offers much of the desired functionality of an Australia Card but operates in an entirely different way. The individual retains control of all their relationships, knows what information is kept about them in any registered electronic database and chooses whether or not to release information to others. In other words, information about me is kept in disparate databases whose only connection is through the electronic me, my electronic identity. Under this system I keep track of my relationships, not the government.

Integrity of the system

It is to the advantage of an individual to have all connections in the one place and connected biometrically to themselves as it makes it very, very difficult for someone else to steal their identity. The only way for an electronic identity to be stolen is to physically kidnap or take control of the person.

Fraud through the attempted creation of multiple identities would not be possible as it would almost certainly be detected by biometric security procedures and by an individual’s behaviour.

Audit procedures and independent checks of organisations looking after connections (the links between relationships) would further protect the integrity of such a system.

Does it need government legislation to come into existence?

A system as described here does not require any special legislation to become operational; in fact we have already built a system with these characteristics. It can be viewed at This system can cooperate with other systems built in the same way and it is expected that over time many different Edentiti-type systems will interoperate. Individual organisations use the system for registration of customers who can prove who they are. As it reduces the cost of transactions, it is expected that such systems will ultimately prevail in the marketplace for identification.


The advantages of people retaining control of their own electronic identity information are great in terms of reduced costs, increased privacy and more open and secure transactions, making it an approach that is likely to prevail. By adjusting the way we handle individual transactions we can attain our system goals of increased security and reduced costs while still having a free and open society.

A Market approach to Reducing Global Emissions

A framework to avoid the Tragedy of the Commons.

The problem of reducing emissions is a classic “Tragedy of the Commons” problem. Each of us know that reducing our emissions is good for us all but it only works if everyone does it.

This blog gives a way of solving the “Tragedy of the Commons” through a market in technologies to reduce greenhouse gases.

There are three related areas with respect to reducing greenhouse gases:

1. developing infrastructure to generate energy without producing greenhouse gases;

2. developing strategies and infrastructure to save energy consumption; and

3. developing carbon sinks.

The problem of global warming can be resolved through investing money with these goals in mind. The issue – at both international and national levels – is in finding the most efficient, yet fair way to allocate resources to infrastructure to reduce greenhouse emissions.

We know that the best way to allocate resources is through fair and free markets. Reducing emissions is an investment problem not a pricing problem. If we spend money wisely we will solve the problem. How we collect the money to spend on infrastructure is relatively unimportant. That is if we can devise a method that is seen to be a fair and reasonable expenditure of money it will get wide acceptance and adoption.

A Market Place for infrastructure to reduce emissions

We already have a market place in infrastructure to reduce emissions. You can invest in wind farms, solar farms, insulation, hybrid cars etc. The problem is that it is not economically sensible for an individual to do so. That is we have sellers but we do not have buyers.

Let us collect money somehow. A tax on all polluting energy is a good way to do this as it makes polluting energy more expensive.

Let us now distribute this money in inverse proportion to the amount of energy each individual consumes in their household. Let us call this money Rewards for Frugality. Rewards however, must be spent in the infrastructure market place.

That is Rewards must be spent on any approved infrastructure project that will reduce greenhouse gases. It could be used for solar hot water heaters, to buy new shares in a geothermal company (not buy existing shares), to purchase a bicycle etc. Implementation of this strategy requires a communications infrastructure such as a mobile phone network and a mobile phone network could classify as an infrastructure project under the international fund. See Edentiti Rewards for ideas on how a market place can be implemented.

How might it work?

The infrastructure market is established by paying people Rewards in inverse proportion to the amount of energy they consume. Individuals are not required to receive Rewards and if they cannot think of a way to spend their Rewards they can sell them to others. Participants who break the rules of the market are excluded from the system for a period of time.

The Rewards must be spent on infrastructure that reduces greenhouse gases. This approach will work because it is seen as a “fair trade” and like all good trades both sides win. It is important to note that the market is in infrastructure not in carbon, nor in emission permits, nor in energy. It is a direct way of addressing investment – not an indirect way.

The system is easy to understand – If I use less energy then I am rewarded but I must spend my Rewards to reduce emissions. This solves the Tragedy of the Commons as the funds I receive is spent on infrastructure that benefits the whole community as well as myself.

The system is easy to implement but the details will depend on the communications infrastructure available in the country. Systems can be implemented with mobile phones but more complex systems can be implemented if there is a widely available broadband Internet.

The cost of implementation is low and running costs are expected to be less than a percentage point of investment dollars spent.

The system leads to stability in prices and is guaranteed to work. Emissions targets can be set and can be achieved for a known amount of investment which is determined by the size of surcharge on energy.

How much money do we need to invest?

The following calculations are indicative but with ongoing development in renewable energy technologies the figures are conservative.

Each Australian, on average, consumes for all reasons about 75,000 kwhs per year of energy. It costs $3,000 to build a solar powered or geothermal power source capable of generating 1 kw continuously for a year (or about 9,000 kwhs). Thus an investment of $25,000 will produce all the energy needed for an Australian to be greenhouse neutral. This equates to a total of $500 billion for the entire population at current prices. If this amount is spread over 10 years, it becomes an investment of $2,500 per person annually. The running costs (excluding financial costs) of renewable energy sources are about 1 cent per kwh or half the running costs of coal fired stations. The capital cost of coal fired stations is about $1,000 so the capital on greenhouse free energy investment is repaid in 22 years with today’s prices. At the end of 22 years the nation has an energy source fully paid for and generating energy at 1 cent per kilowatt hour.