Speaking at the online launch event for the Global Digital Asset & Cryptocurrency Association on Friday — a Chicago-based group focused on regulatory clarity and industry security — U.S. Representative Bill Foster explained the importance of a "secure digital identity."
"You can have the most rock-solid cryptographic guarantees of a blockchain or equivalent and it doesn't do you any good if people are fraudulently participating on it under anonymous names," Foster said during his brief speech at the event. He mentioned trading as an example, noting some less-than-honest characters in the industry could conduct illegal trading activities using fake names.
A Harvard graduate and blockchain programmer himself, Foster knows the potential of such technology. Foster also sits as co-chair of the Congressional Blockchain Caucus — a governmental group working on regulation as it relates to blockchain. Foster began his college journey several years early — when he was 15 years old — according to his speech, later becoming a physicist and then a politician.
Foster mentioned the importance of third-party anonymity, which essentially involves a public-facing anonymous identity, with the caveat that pertinent details behind such an identity can be revealed as necessary when brought to a court.
"This, I think, is a fundamental requirement, I believe, of digital contracts or almost all of the use cases that are talked about for this," he said. The transition begins by offering people a trackable method for uniquely and securely identifying themselves, Foster explained, also adding that the blockchain and tech space already holds the elements necessary for putting such a system together.
"The missing point, and the essential government role, is that once in your life, when you go in to get your real ID card or your passport or something, that you have to be authenticated as a legally traceable unique person, and then you have to be biometrically deduped to make sure that you're not getting another passport in another country under another identity."
This type of system, however, needs international collaboration. "This requires a group of countries to get together to set up this trusted ID ecosystem, and this is where we have to go," Foster said. Such a framework would subsequently lead to other future potential use cases.
In tandem with Foster's thought process, two fellow Blockchain Caucus members, U.S. Representatives David Schweikert and Darren Soto, recently proposed a fresh bill to make blockchain-based digital signatures legally binding.
Such a digital identity system also comes with drawbacks, however, such as increased government tracking of citizens, further encroaching on privacy — an aspect the crypto space often touts as important.