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I think, while there may be a technical solution, the bigger problems are with the business and legal incentives around the credit industry today. Many of the t

I think, while there may be a technical solution, the bigger problems are with the business and legal incentives around the credit industry today. Many of the things that make our credit system a nightmare for security, also lower friction for opening new accounts and engaging with the banking system. In my view, the banks are effectively offloading the security costs to law enforcement and unrelated third party individuals, in order to reap the benefits of less friction with signup. If you want a blockchain credit system, you need to solve that convenience problem, as well as a bunch of other kinds of support problems (what happens when you lose your key? Are you just screwed, and if not, what happens when the recovery mechanism is compromised?), and the banks currently have no incentive to do so (see chip and pin for a similar but smaller case study with the credit industry). Barring large legislation that shifts liabilities onto financial institutions from individuals and law enforcement, we won't see them invest in solving this either.

ghaff 7y ago
While there are better practices and worse practices, there's also just a tradeoff between convenience and how thoroughly identity is vetted. Imagine you forgot your 15 digit randomized password to Google and their response was either a shrug or a requirement to come to an office in Mountain View with multiple forms of government ID between the hours of 9-5 weekdays. (And 2FA doesn't change the basic equation because smartphones, keys, and one-time pads can all be lost.) That's a somewhat nonsensical extreme example obviously but using physical mail to addresses of record and things like that have often been used to enhance security for certain types of reactions. You're a digital nomad, are just traveling, just moved and didn't update records, or are actually homeless? Too bad. And this is in a country where pretty much any sort of Voter ID law is controversial because they do disenfranchise many voters.

ghaff 7y ago

While there are better practices and worse practices, there's also just a tradeoff between convenience and how thoroughly identity is vetted. Imagine you forgot your 15 digit randomized password to Google and their response was either a shrug or a requirement to come to an office in Mountain View with multiple forms of government ID between the hours of 9-5 weekdays. (And 2FA doesn't change the basic equation because smartphones, keys, and one-time pads can all be lost.) That's a somewhat nonsensical extreme example obviously but using physical mail to addresses of record and things like that have often been used to enhance security for certain types of reactions. You're a digital nomad, are just traveling, just moved and didn't update records, or are actually homeless? Too bad. And this is in a country where pretty much any sort of Voter ID law is controversial because they do disenfranchise many voters.