The Sovrin Foundation (“Sovrin”) Board of Trustees and Trust over IP Foundation (“ToIP”) Steering Committee are pleased to announce that they have signed a Letter Agreement (dated March 18, 2021). This agreement signifies the commitment of both organizations to mutual cooperation and recognition for each other’s mandates. Sovrin and ToIP intend to work together toward advancing the infrastructure and governance required for digital trust and digital identity ecosystems.

“By signing this Letter Agreement, Sovrin and ToIP are excited to take a step further to support the need and importance of our separate but interrelated mandates to benefit people and organizations across all social and economic sectors through secure digital identity ecosystems based on verifiable credentials and SSI,” said Chris Raczkowski, Chairman of Board of Trustees, Sovrin Foundation.

Under the agreement, each organization will assign one member to act as a liaison to coordinate and maintain lines of communication, attend plenary sessions, and provide periodic updates to the Sovrin Board of Trustees and ToIP Steering Committee. They will also seek opportunities proactively to exchange information, participate in discussions of shared interest, promote the value of each other’s work through joint announcements and media products, as well as collaborate to achieve their respective mandates.

Sovrin and ToIP both operate in a manner that respects open licensing, open source code and open standards. The organizations agree that their open, public materials will be available for reference (with attribution) by the other.

“ToIP and Sovrin each offer something unique to the market. Our members already collaborate together informally on many topics. Signing this agreement makes our work together more visible and open. It will create new opportunities to collaborate on challenges that affect every layer of our trust model,” said John Jordon, Executive Director of Trust over IP Foundation. “By working together, we want to help solve interoperability problems more quickly and support the adoption of digital trust ecosystems more widely.”

If you have any questions or suggestions, please contact info@sovrin.org or operations@trustoverip.org .

About Sovrin Foundation

The Sovrin Foundation is a non-profit social enterprise which acts as the administrator and governance authority for public available SSI infrastructure, as well as supporting interoperability digital identity ecosystems that adhere to the Principles of SSI. Sovrin’s activities aim to serve the common good of providing secure, privacy-respecting digital identity for all, including individuals, organizations and things.

About Trust over IP Foundation

Launched in 2020, the Trust over IP Foundation is an independent project hosted by the Linux Foundation. Its members include over 200 leading companies, organizations and individual contributors sharing expertise and collaborating to define standard specifications to advance a secure trust layer for the digital world. Through this collaborative effort, the Trust over IP Foundation aims to define a complete architecture for Internet-scale digital trust that combines cryptographic trust at the machine layer with human trust at the business, legal, and social layers. For more information, please visit us at trustoverip.org.

Originally published at https://sovrin.org on May 5, 2021.

Sovrin and Trust over IP Signed Mutual Agreement to Strengthen Their SSI Collaboration was originally published in Sovrin Foundation Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

In December 2019 the Sovrin Guardianship Task Force released a whitepaper titled “On Guardianship in Self-Sovereign Identity.” This groundbreaking paper explored guardianship in the context of SSI, and provided two use cases: one for a refugee, Mya, and one for an elderly living with dementia, Jamie. (Watch the video illustration of these two use cases at the end of this article.)

Recognising the need to develop the work beyond the whitepaper, the Sovrin Foundation chartered a Sovrin Guardianship Working Group (SGWG) in December 2019. Two key documents were identified as outputs for the working group: a Technical Requirements for Guardianship and Implementation Guidelines. After more than a year of hard work, the two papers were completed and will be publicly presented and released at the Sovrin’s breakout session at the Internet Identity Workshop (IIW) #32 during April 20–22, 2021.

“When we started the work on defining technical requirements for guardianship in early 2020, we viewed the task as relatively simple. ‘All’ we had to do was extract the guardianship requirements from the use cases in the previous whitepaper… It turned out that this view was optimistic,” said John Phillips, one of the authors and Chairs of SGWG in Asia Pacific. “We found that the gap between the two use cases in the whitepaper and technical requirements was too broad. So we realised we needed to revisit our thinking. We needed a conceptual bridge, a ‘mental model’ to understand Guardianship broadly so we could write appropriately narrow technical requirements. The lesson we have (re)learnt in our journey is that, before you can describe something in simple terms, you need to make sure you have a broad and deep enough understanding of the topic.”

The first paper is called the Guardianship Credentials Implementation Guidelines and its purpose is to provide readers with the background they need to implement IT systems that support various kinds of guardianship. In particular, it focuses on what they need to know when using Verifiable Credentials and Decentralised Identifiers, the building blocks of a SSI framework within the frameworks of Sovrin Governance and Trust Over IP (ToIP).

This paper is intended for all people interested in the design, build and operation of a Guardianship implementation using an SSI framework. It outlines the conceptual framework for Guardianship and provides implementation guidelines. The document introduces and uses a mental model to help understand the interplay and relationships of the key entities and actors involved in the establishment, running and ending of a Guardianship Arrangement.

While this document provides background explanations of the thinking that led to the technical requirements guidelines, it does not mandate or warrant specific rules for the implementation of Guardianship as these should be Jurisdiction specific, which is defined by the mental model in the document.

The second paper is called Guardianship Credentials Technical Requirements which was developed by the technical requirements working group within the SGWG. The purpose of this document is twofold: i) provide principles under which guardianship scenario designs and requirements are considered and defined; and ii) provide technical requirements for SSI solutions that offer the capability of guardianship.

The intended audience for this document includes: i) individuals looking to understand how guardianship should be implemented for their use case; ii) SSI solution designers that require guardianship to support the use of VCs in their specific use case; iii) readers who want to understand how Guardianship can work in an SSI context.

The requirements described in this paper, together with other SSI standardization, describe when an SSI solution offers the capability of guardianship. In this case, the requirements are mainly for the technical building blocks that live in the bottom three layers of the Technical “Stack” of the Sovrin/ToIP framework. The mental model, however, is also relevant for the top layer (ecosystem), as guardianship is intricately linked to what we will be defining as Jurisdictions, and this enables human governance to be applied to the first three layers.

This document should be read in conjunction with the Sovrin Guardianship Credentials Implementation Guidelines mentioned above. In particular, readers who are looking to understand the thinking behind these requirements are encouraged to refer to the Implementation Guidelines.

These two papers are the first public release of implementation guidelines and technical requirements for guardianship in the context of SSI. There are sections at the end of the documents that propose areas of future work, and it is expected that these two documents will be updated as technology evolves and open discussion and decision areas are resolved.

Download the two papers here.

Sovrin Guardianship Use Case #1— Mya (a refugee girl)

Sovrin Guardianship Use Case #2 — Jamie (an elderly living with dementia)

Video credit: John Phillips

Originally published at https://sovrin.org on April 22, 2021.

This all-volunteer Sovrin Guardianship Working Group is open to anyone with a genuine interest in and willingness to contribute to digital guardianship. For more information, please see its webpage for details.

A Deeper Understanding of Implementing Guardianship was originally published in Sovrin Foundation Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

April 7, 2021

On December 23, 2020, the Financial Crimes Enforcement Network (FinCEN) of the US Treasury Department published a Notice of Proposed Rulemaking (NPRM) regarding “Requirements for banks and money services businesses” related to certain transactions involving convertible virtual currency (CVC) or digital assets with legal tender status (“legal tender digital assets” or LTDA). FinCEN is identifying additional statutory authority for the proposed rule under the Anti-Money Laundering Act of 2020, providing additional information regarding the reporting form, and reopening the comment period for the proposal.

The Sovrin Compliance and Inclusive Finance Working Group (CIFWG) took the opportunity to submit its formal response to FinCEN on March 29, 2021 — focusing explicitly on how their proposed rules will impact financial inclusion.

Sovrin Foundation asked Amit Sharma, Chair of the Sovrin CIFWG, to tell us more about the potential impact of the NPRM, their response and recommendations to FinCEN.

Q: Can you tell us a little bit about the Sovrin CIFWG? What’s your mission and who are your group members?

The purpose of the Sovrin CIFWG is to advance the mission of financial inclusion globally, by addressing the challenges and opportunities presented by innovations in the financial services and payments landscape, and the attendant financial and regulatory compliance implications. We are an open group of traditional bank and non-bank financial institutions, regulators, policymakers, technologists, ethicists, and legal experts who monitor the challenges faced by the financially excluded and under-served. CIFWG focuses on how economic and regulatory technologies can bridge the gap between traditional banking compliance and associated risks injected by innovation. We have developed and been actively promoting the Sovrin Compliance and Inclusive Finance Rulebook, an innovative best practices framework that extends traditional banking compliance and payments guidance to emerging fintech and virtual asset service providers (VASP) processes.

Q: What do you mean by global financial inclusion, and why is it important?

Global financial inclusion remains a desirable and necessary development goal — 1.7 billion adults lack a bank account[1], and millions more have limited or no access to traditional financial services around the world. Furthermore, “de-risking” — the efforts of financial institutions to terminate or restrict relationships of certain clients and customers — has continued to be amplified by the continued growth of global anti-money laundry (AML) / counter-terrorism financing (CTF) controls[2]. The result is a disproportionate impact for the financially under-served, the global poor, and institutions and sectors that provide services to these segments of the economy. The attendant consequences of financial exclusion cannot be overstated given that remittances from migrant workers alone total over $500 billion a year (three to four times foreign aid) and is a vital source of finance for poor countries.

Q: What is the NPRM regarding “Requirements for banks and money services businesses” proposed by FinCEN about?

The December NPRM proposed to address the threat of illicit finance with respect to certain transactions involving CVC or LTDA by (a) establishing new reporting requirements for certain CVC or LTDA transactions analogous to existing currency transaction reports, and (b) establishing new record keeping requirements for certain CVC or LTDA transactions that is similar to the record keeping and travel rule regulations pertaining to funds transfers and transmittal of funds.

On January 1, 2021, the Anti-Money Laundering Act of 2020 (Division F of Pub. L. 116–283) (“AML Act of 2020”) became law. FinCEN proposed that by regulation, CVC and LTDA are monetary instruments because they are “similar material” to “coins and currency of a foreign country, travelers checks, bearer negotiable instruments, bearer investment securities, bearer securities, [and] stock on which title is passed on delivery[3].”

Q: What do you think about the NPRM? How does it impact the fintech sector and its key stakeholders?

We believe combating illicit finance activities is necessary and a top priority for FinCEN. But efforts to serve both law enforcement equities and financial inclusion do not present a binary choice. An effective anti-money laundering and counter-terrorism financing regime should also prioritize increased engagement of financially underserved, de-risked and/or excluded parties to foster a financial system that provides enhanced participation, greater transparency, and innovation in domestic financial systems.

Further, the data on illicit finance risks in the CVC sector don’t necessarily support the need for the proposed rule changes which are motivated to strengthen law enforcement and regulatory oversight efforts. According to a recently released report by Chainalysis, illicit activities or crime related to virtual assets has continued to decline, with the illicit share of cryptocurrency activity falling to just 0.34% in 2020.

Importantly within the data analyzed by Chainalysis, the concentration of illicit activities has shown to be primarily with a “small group of shady cryptocurrency services, mostly operating on top of large exchanges, [who] conduct most of the money laundering that cybercriminals rely on to make cryptocurrency-based crime profitable[4].” This data would seem to call for more targeted efforts by law enforcement to concentrate investigations of criminals by identifying owners of these deposit addresses and the organizations that are conducting deliberate money laundering operations at scale (among otherwise legitimate activities).

As such, we are concerned with the proposed rules as they impact a growing sector that is increasingly providing solutions to marginalized and financially excluded constituencies. Also, organizations operating in CVCs, including fintech companies, virtual asset services providers (VASPs), and other similar organizations may fall under the broader definition of nonbank financial institutions or money services businesses/money transfer operators (MSBs/MTOs) that already face enormous scrutiny by mainstream financial institutions when evaluating their respective risks related to onboarding into new accounts. The Financial Action Task Force (FATF) itself has acknowledged the fact of de-risking disproportionately impacting certain sectors like MSBs/MTOs[5].

Q: What is the role of the CVC services in regards to global financial inclusion, and how secure are they?

As CVC services continue to evolve and grow, so do the applications and opportunities inherent in facilitating greater inclusion of underserved and marginalized communities and organizations into the global financial ecosystems. As such, self-hosted wallets are playing an increasingly important role with virtual assets, as global financial operations continue to be unbundled, and an ongoing trend toward de-centralized financial services continues unabated[6].

Self-hosted wallets enable anyone with an internet connection to transact with others in digital assets on a peer-to-peer (P2P) basis. Additionally, these wallets can be used to store value or digital assets securely and provide capability for the user/consumer to hold resources personally that enable them to interact in the fiat and digital financial context. This enables consumers to transact with counterparties directly without the need for a third-party intermediary–similar to making a cash transaction for a purchase of a good, pay an expense, or transfer value to a friend or family member.

When combined with blockchain technology, P2P transactions are arguably more secure and more transparent than activities undertaken in cash, as the convenience of cash and the efficiencies that come with electronic payments are combined with the risk controls associated with pseudonymous transactions that are not otherwise dependent on a specific financial intermediary[7].

Q: In sum, what are your recommendations to FinCEN regarding the NPRM?

We really appreciated the opportunity to comment on the NPRM. We believe that any proposed rule should explicitly include a thorough assessment of the threats to financial inclusion that may come about with such a proposal, and the Agencies should consider the concerns outlined in the response in our letter as part of such an assessment.

Secondly, increased targeted enforcement and requirements for transaction monitoring would strengthen law enforcement regulatory intentions with the proposed rules vs a more wholesale application of record keeping and reporting for related to all noncustodial wallet holders and their activities. In short, a smaller group of actors are engaged in such activity, and enforcement and regulatory measures should be better targeted to them vs the industry as a whole — especially in light of the financial exclusion implications of such proposed rules.

Strengthening financial inclusion, including by encouraging innovation in the financial services arena with technology applications that extend beyond existing banking and payments systems can actually provide enhanced security, risk and compliance controls, while bringing greater opportunities to marginalized and otherwise financially underserved or excluded communities. The underlying technologies include:

1. The facilitation of cross-border remittances via P2P and blockchain networks that provide efficiency, cost advantages and security;
2. The enhanced auditability and traceability of transactions conducted via these applications that better enable financial services regulators and law enforcement interests; and
3. The application of digital and sovereign identity management capabilities that strengthen know-your-customers processes and customer information programs while preserving the essential privacy protections inherent in financial services.

We welcome follow up with Agencies and participating members that are interested in providing guidance, examples and use cases of inclusion efforts — including the application of self-hosted/un-hosted wallets in particular.

Thank you Amit!

Anyone can download the full letter here. Please feel free to reach out to Amit Sharma (Amit@finclusive.com) and the Sovrin Foundation (info@sovrin.org) if you have any questions or suggestions regarding the NPRM.

For more details about the Sovrin Compliance and Inclusive Finance Working Group and instructions on how to join, please see its webpage or contact cifwg@sovrin.org.

Reference materials:

[1] Global Findex Database: https://bit.ly/2OlEybX

[2] De-risking in the Financial Sector: https://bit.ly/2Q0g3kX

[3] Requirements for Certain Transactions Involving Convertible Virtual Currency or Digital Assets: https://bit.ly/3ugrOme

[4] The 2021 Crypto Crime Report: https://bit.ly/31MOQ8k

[5] FATF (2016). Correspondent Banking Services. Paris: Financial Action Task Force: https://bit.ly/3mlMcQf (accessed July 11, 2019).

[6] World Bank staff estimates based on data from IMF Balance of Payments Statistics database. For UAE, estimates are based on reports from its Central Bank.

[7] Are regulators poised to demand cryptocurrency address whitelisting? Probably not: https://bit.ly/3mlMcQf

An open letter to Financial Crimes Enforcement Network advocating for financial inclusion in its… was originally published in Sovrin Foundation Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

1.7 billion adults and millions of organizations do not have access to essential financial services; billions more have bank accounts but are unable to use them. Despite initiatives such as the World Bank’s Universal Financial Access program and governmental and industry encouragement, many remain underserved or entirely excluded from the global financial system. For many, the basic societal need to hold monetary value securely, transact for necessities, and transfer money to friends and family is still out of reach.

Regulatory Compliance Is an Enabler for Innovation in Fintech

Thankfully, financial services continue to evolve rapidly, providing new avenues for people and organizations to engage in essential services. Alternative financial technologies (fintech) are bursting into the marketplace, offering innovative products and services to banking participants through direct, smartphone-based, non-traditional channels. The digitization of monetary exchange has also experienced explosive growth, often proving to be faster, more convenient, more privacy-respecting, and more secure than physical transactions.

These trends expand the risk and compliance challenges of money transmission beyond traditional banks to startups, enterprises, and nonprofits/NGOs, which are typically unfamiliar with regulatory scrutiny or essential compliance controls. Global regulators are currently monitoring this transition and looking to ensure existing regulations apply to new fintech players. This transition includes virtual asset service providers (VASPs) and other non-bank financial institutions which act as a conduit for the financially excluded and underserved or those otherwise considered ‘high-perceived-compliance risk.’

Financial Inclusion Needs Identity for All

According to the World Bank’s ID4D, “People with an ID are more likely to own bank accounts and mobile phones, and financial and mobile services are among the most frequently reported uses of one’s ID.”

Identity verification is at the core of essential financial regulations of Know Your Customer (KYC), Anti-Money Laundering (AML), and Counter-Financing of Terrorism (CFT). Financial governance leaders are recalibrating their requirements to keep up with the pace of innovation to ensure that bad actors do not exploit the financial system and that intermediaries of all types have adequate financial crime compliance (FCC) programs in place.

The fundamental right for individuals to participate in society no matter their origins or circumstance has long been at the core of the Sovrin Foundation’s vision. The Foundation promotes control of one’s own identity to utilize digitally stored credentials to access and engage daily services. While decentralized identity has been a barrier in traditional banking, fintech and regtech have introduced the constructs to leverage digital and self-sovereign identity to drive financial inclusion for tens of millions of outliers.

Indeed, these new technologies provide great promise in modernizing finance, payments, and identity management in tandem. But related regulatory compliance is in equal need of modernization. Traditional legal compliance relies on legacy banking infrastructure. Its growth has forced the sector into a false binary choice: provide incentives for universal access or protect financial system integrity with exclusionary compliance controls. This choice has disproportionately impacted those who are in most need of essential financial services, such as low- or moderate-income families, and access to vital services, such as international remittances. The Covid-19 pandemic has reinforced the importance of such entry to small businesses reliant on support and financially underserved or excluded households looking for relief.

Innovation in Governance, Compliance, and Regulation

Since 2019, Sovrin has hosted the Compliance and Payments Task Force (CPTF), an open group of traditional bank and non-bank financial institutions, regulators, policymakers, technologists, ethicists, and legal experts. The CPTF has developed and promoted the Rulebook, an innovative best practices framework that extends traditional banking compliance and payments guidance to emerging fintech and VASP processes.

The Rulebook serves to ensure essential global banking compliance while accommodating fintech’s seamless experience and smooth flow of funds for members and reinforcing the application and intersection with traditional banking rails. The Rulebook defines technical standards for end-to-end transaction flows and service-level agreements between parties to reflect the operational realities of an increasingly decentralized and cross-border financial system.

As part and parcel of regulatory compliance to expand the operational focus of the CPTF to serve the Identity for All mission and advance inclusion, the Group has reimagined into the Compliance and Inclusive Finance Working Group (CIFWG). The CIFWG builds on the tactical efforts of the CPTF, with a robust and ambitious mandate: promoting financial inclusion as a critical enabler. CIFWG will monitor the challenges faced by the financially excluded and underserved, focusing on how economic and regulatory technologies, supported by self-sovereign identity (SSI), can bridge the gap between traditional banking compliance and the associative risks injected by innovation.

With the Rulebook as an anchor framework, the Group will facilitate the advancement of financial inclusion and a modernized application of established global banking requirements and the attendant and necessary FCC protocols. CIFWG is also engaging with other international organizations, initiatives, and regulatory-led groups that advance financial inclusion and modern regulatory compliance solutions. Its ultimate goal is to promote access to traditional and non-traditional financial services and highlight the resulting benefits of building economic resilience and prosperity.

CIFWG believes that SSI is a powerful enabler for security, compliance, and inclusion . “Our bedrock approach recognizes that any institution today can be a financial services provider; our job is enabling their full participation in the global banking system,” says Amit Sharma, CIFWG Chair. “Digital finance is not new, although the cryptographic creation and representation of value show promising applications to democratize finance truly. Innovative and modern FCC approaches must meet market innovation. We encourage all who are interested in joining us in the CIFWG to help facilitate a pathway to a more sustainable economic future for all.”

For more details about the Working Group and instructions on how to join, please see the Compliance and Inclusive Finance webpage or contact cifwg@sovrin.org.

Originally published at https://sovrin.org on February 9, 2021.

January 12, 2021

An introduction to SSI and where it came from.
2020 as a growth catalyst and where SSI is going.
A Sovrin Foundation perspective.

Written by:
Chris Raczkowski — Sovrin Foundation, Chairman of the Board of Trustees
Drummond Reed — Evernym, Chief Trust Officer; ToIP, Steering Committee Member

It goes without saying that last year was transformational for the world. Along with pains felt by many, the challenges of 2020 were also a catalyst for positive growth. The global SSI community, dedicated to privacy-respecting digital identity, has risen to these challenges. Digital identity solutions have been called into action by governments and companies large and small to help mitigate pandemic-related public health challenges. This call to action has accelerated adoption of SSI across many use cases where it brings new standards of truly privacy-respecting digital identity control to all peoples of the world.

But first, what is SSI?

SSI is an acronym for self-sovereign identity, representing the secure, privacy-respecting digital identity model developed around blockchain technology starting in 2016. During the last five years acceptance of this model has grown rapidly. SSI utilizes best practices in open-source cryptography and decentralized computing in tandem with humanistic governance. It also helped drive development of new technology open standards such as Verifiable Credentials and Decentralized Identifiers. While SSI incorporates a wide range of complex technology and detailed governance, its essence is captured in the opening chapter of a book that will be published during 2021:

“The best overall analogy for the decentralized identity model (SSI) is in fact exactly the way we prove our identity to each other every day: by getting out our wallet and showing the credentials we have obtained from other trusted parties. ... With decentralized digital identity, we just do this with digital wallets, digital credentials, and digital connections.” ¹

SSI has emerged as a, “simple, neutral, memorable name for this new model for digital identity.” ²

Open Source and Open Standards: Growth Engines of SSI

SSI is rooted in core principles of privacy-respecting Internet-scale identity architecture first laid out by individuals like Kim Cameron with his Laws of Identity, which were published in 2006. Such governance principles, combined with open-source technology advances in blockchain, cryptography, supporting software and standards, ultimately gave rise to reliable SSI infrastructure starting in 2017. Open-source development of digital identity technology, standards and principles is truly the engine of SSI growth.

The Sovrin Foundation, a not-for-profit corporation, was established in 2016 to promote global adoption of SSI as an open standard for digital identity. Over the past five years the Foundation has operated the Sovrin Ledger as the best-known SSI identity network, helped advanced the most widely used SSI open-source software (Hyperledger Indy, Ursa, and Aries), published the most widely used SSI governance framework, and drives SSI thought leadership in areas including data protection, financial inclusion, IoT, and government-issued ID. In its role as an originator and disseminator of open-source SSI concepts and code, the Sovrin Foundation is dedicated to supporting SSI development in cooperation with companies, organizations and governments around the world.

One of the most important products of this work is the “Sovrin Stack,” shown in Figure 1.

The Sovrin Stack was the first conceptualization of SSI infrastructure as a four-layer stack, where the lower two layers provide cryptographic trust needed for machine-to-machine communications and the upper two layers provide human trust needed for business, legal, and social interactions.

The Sovrin Stack also represents the first recognition of the critical role governance frameworks play in bridging the technological innovations of SSI with real-world policy requirements of governments, industries, businesses and individuals. In fact, as the importance of governance frameworks became more widely acknowledged, the SSI community recognized that specialized governance was needed at all four layers of the stack. During early 2020 the Sovrin Stack evolved into the Trust over IP (ToIP) stack, shown in Figure 2.

As a model for decentralized digital trust infrastructure at Internet-scale, the ToIP stack was compelling enough that in May 2020 it became the cornerstone of a new Linux Foundation project called the ToIP Foundation. Rapid growth of ToIP Foundation membership is a testament to how core concepts of SSI architecture are strongly supported by respected governments and companies.

Emergence of entirely new organizations promoting SSI adoption is evidence of the effectiveness of the Sovrin Foundation’s open-source approach to advancing technology and thought leadership. The Foundation’s success is measured not only in by results it delivers, but in the progress of derivative and novel SSI products and services created by organizations which build on contributions of Sovrin and the global SSI community.

2019: Early success ahead of unexpected crisis

Prior to the global public health crisis of 2020, SSI was progressing along a steadily increasing adoption curve. Start-up companies, global corporations, digital identity privacy organizations and a variety of national and regional governments (Canada, UK, US, Germany, British Columbia, Ontario, etc.) were all expanding SSI infrastructure and launching initial use cases. This advancement was based on vigorous technology development (open-source software architecture, code and standards), a robust global public identity utility (the Sovrin Ledger), the first comprehensive decentralized digital identity governance framework (the Sovrin Governance Framework), and proof of concept use cases produced by a variety of governments and companies.

Woven throughout this activity, the Sovrin Foundation acted as a convener, facilitator and beacon for the global SSI community. The Foundation’s commitment to the Principles of SSI, open-source technology and identity ecosystem governance, combined with efforts to sow the ethos of SSI across a spectrum of use-cases, helped to create fertile ground for emergent applications. During this course of activities Sovrin and the SSI community unknowingly primed the world for tremendous acceleration of SSI adoption during a most unexpected year.

2020: The SSI Springtime

As the world embarked on a new decade at the start of 2020, almost no one could have guessed what their lives and societies would look like 365 days later. Public health challenges of 2020 brought tremendous stress and grief to most corners of the world. Yet, the situation also created opportunity for unprecedented growth of technologies that could address urgent social needs. For SSI, this meant compressing what could have been a five-to-ten-year adoption process for sensitive use-cases into a period of 12 months.

During normal times, new technology standards for critical services such as medical information credentials, travel credentials and critical worker credentials often face regulatory review and approval marathons spanning years or even decades. Fortunately, prior to 2020, the core components of SSI had already been assessed and accepted by respected companies and governments. These organizations understood that trusted digital identity must be privacy-respecting, which is a central requirement for SSI technology and governance. With solutions needed immediately for verifiable proof of medical test results, vaccination status, etc., the standards and technology developed with the support of the Sovrin Foundation and the global SSI community have been fast-tracked into service.

Just a few of the SSI implementations that were launched in 2020 or are pending launch in early 2021 include:

• IATA Travel Pass will be the first verifiable credential capable of providing proof of COVID-19 test and vaccination status at airports around the world,
• NHS Staff Passport is the first portable digital identity credential for doctors and nurses in one of the largest public healthcare networks in the world,
• GLEIF (the Global Legal Entity Identifier Foundation), based in Switzerland and the only global online source that provides open, standardized and high quality legal entity reference data, is committed to following the SSI model for digital identity credentials for companies.
• SSI4DE, co-funded by the German Federal Ministry of Economic Affairs, supports showcases for secure digital identities in Germany, and Chancellor Angela Merkel declared digital identity as a priority matter during December 2020.
• MemberPass brings SSI to financial services with Credit Union customer identity verification,
• Farmer Connect is realizing is vision to “Humanize consumption through technology” by enabling and empowering individual coffee farmers to more easily work with global enterprises, and reducing costs and inefficiencies for large companies to work directly with small and often remote farmers.
• Lumedic Exchange is the first network designed exclusively for patient-centric exchange of healthcare data using SSI-based verifiable credentials.

While scientists and professionals in the fields of biology, genetics, immunology, medicine and public health are the superstars of 2020, SSI is also in a position to make a major contribution. Reliable digital credentials for medical test results and vaccination status, in the form of W3C Verifiable Credentials backed by privacy-respecting governance, can help societies more safely return to normal levels of social interaction and restart economies. At the same time, the SSI model will be establishing new standards and expectations for person identity data management and control by individuals.

2021: Looking Forward

Unexpected urgencies that accelerated broad acceptance of the SSI digital identity model during 2020 will continue into 2021. Ongoing challenges of the global pandemic can be mitigated by expanded use cases and public acceptance of trusted digital identity. In the most forward-thinking and dynamic jurisdictions, SSI progress is anticipated in the following areas:

• Verifiable digital vaccination credentials to facilitate safer operations at some workplaces, medical facilities and senior care centers,
• International travel enabled by vaccination and medical test results quickly and easily proved with the power of verifiable digital credentials,
• Rollout of government-issued ID such as driver licenses in the form of digital credentials conforming to SSI standards and securely stored in privacy-respecting digital wallets on smart phones,
• Expansion of SSI digital identity networks, along with demonstrated interoperability of digital credentials and their verification across multiple networks using smart phone apps (digital ID wallets),
• Laws and regulations implemented at state, provincial and national levels which support the use of digital Verifiable Credentials for medical, financial and other uses.

While the wellbeing of individuals and societies during this historic time rests largely on the clear thinking and actions of responsible scientists, business leaders and government leaders, SSI is also playing a significant role. The Sovrin Foundation is dedicated to supporting global adoption of SSI to help mitigate challenges of this pandemic, while advancing its mission of Identity for All.

Notes

1. Alex Preukschat, Drummond Reed. Self Sovrin Identity. Manning. Publication expected spring 2021.
2. Ibid.

Originally published at https://sovrin.org on January 12, 2021.

We take the Internet for granted, not realizing that such a global, decentralized system is a rare thing. Protocols, rightly, get credit, but they alone are insufficient. TCP/IP did not create the Internet. The Internet is not just a set of protocols, but rather a real thing. People and organizations created the Internet by hooking real hardware and communication lines together. To understand the importance of this, we need to understand what’s necessary to create social systems like the Internet.

Social systems that are enduring, scalable, and generative require coherence among participants. Coherence allows us to manage complexity. Coherence is necessary for any group of people to cooperate. The coherence necessary to create the Internet came in part from standards, but more from the actions of people who created organizations, established those standards, ran services, and set up exchange points.

Coherence enables a group of people to operate with one mind about some set of ideas, processes, and outcomes. We only know of a few ways of creating coherence in social systems: tribes, institutions, markets, and networks[1]. Startups, for example, work as tribes. When there’s only a small set of people, a strong leader can clearly communicate ideas and put incentives — and disincentives — in place. Coherence is the result. As companies grow, they become institutions that rely on rules and bureaucracy to establish coherence. While a strong leader is important, institutions are more about the organization than the personalities involved. Tribes and institutions are centralized — someone or some organization is making it all happen. More to the point, institutions rely on hierarchy to achieve coherence.

Markets are decentralized — specifically they are heterarchical rather than hierarchical. A set of rules, perhaps evolved over time through countless interactions, govern interactions and market participants are incented by market forces driven by economic opportunity to abide by the rules. Competition among private interests (hopefully behaving fairly and freely) allows multiple players with their own agendas to process complex transactions around a diverse set of interests. Markets don’t displace institutions completely but do help institutions process transactional exchanges.

Networks are also decentralized. The rules of interaction are set in protocol. But, as I said earlier, protocol alone is not enough. Defining a protocol doesn’t string cable or set up routers. There’s something more to it. One form of organization doesn’t usually supplant the previous, but augments it. The Internet is the result of a mix of institutional, market-driven, and network-enabled forces. The Internet has endured and functions because these forces, whether by design or luck, are sufficient to create the coherence necessary to turn the idea of a global, public decentralized communications system into a real network that routes packets from place to place.

My interest in coherence is driven by efforts to create a global, public, decentralized identity system that we call Sovrin. Sovrin is an identity network that, like the Internet, achieves coherence through a combination of institutional, market-driven, and network-enabled forces. I think of Sovrin as the Internet for Identity. The Sovrin network is not owned by anyone, but, like the Internet, is created through the cooperation of many people and organizations. Sovrin is seeking to create a global, decentralized, identity network that is open to all. That’s a little bit different thing that creating a standard or a protocol.

When I say Sovrin is “public” I mean that we intend for it to be a public good that anyone can use so long as they adhere to the protocols, just like the Internet. Public spaces require coherence. Coherence in Sovrin springs from the ledger, the protocols, the trust framework, standards, and market incentives. These gives Sovrin greater coherence than a protocol alone can achieve.

• The ledger creates a decentralized service where various participants can exchange important information without the need for a central authority. But like the Internet, the ledger requires multiple organizations to commit real resources. The Sovrin ledger is a significant piece of the Sovrin network. The ledger provides a global registry for identifiers. This has several significant advantages over DNS as a registry. DNS-based identifiers aren’t permanently owned. This can present real security concerns. With a ledger, identifiers can be persistent and non-reusable. Second, DNS-based solutions require that every site that wants to run registry functions has to install and maintain software for that purpose. This incents centralization of the directories. With a ledger-based solution, a global network does this without special effort on the part of participants.
• The trust framework is an agreement that is administered by the Sovrin Foundation. The trust framework makes shared goals and principles explicit so that the various participants in the system can work together. The trust framework is the basis for shared action and processes.
• Standards like those being developed for Decentralized Identifier (DID) and the verifiable credentials are important for interoperability, but more so specifications and standards on how to communicate with the ledger and the peer-to-peer communication of agents are critical to portability and the rise of a functional ecosystem of software that isn’t controlled by a single vendor.
• Market incentives have traditionally been difficult to incorporate into a networked ecosystem, but the rise of tokens is a recent development that promises to change this. Token-based ledgers come with incentives to participate and thus are self-sustaining in ways that DNS-based identifier registries can’t be. This also alleviates power imbalances where large companies have an advantage relative to individuals. As Chris Dixon says “Token networks …[align] network participants to work together toward a common goal — the growth of the network and the appreciation of the token.” In short, tokens provide a means for establishing coherence.

Someone asked me recently how Sovrin differed from an identity protocol like OpenID Connect. The factors that give rise to coherence are the primary difference between a protocol like OpenID Connect and something like Sovrin. Simply put, Sovrin is a network and OpenID Connect is not. This is where I think we’ve largely gone wrong in building decentralized systems in the past. We’ve shied away from putting a stake in the ground and building a thing. Instead we’ve defined protocols and allowed the network effects to accrue to centralized companies who can establish the coherence necessary to create a real thing. My strong belief is that real networks are necessary for enduring decentralized systems.

Endnotes

Photo Credit: Coherence in chaos from Dhiren Mistry (CC BY 2.0)

Originally published at www.windley.com.

Coherence and Decentralized Systems was originally published in Sovrin Foundation Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

In Decentralized Governance in Sovrin, I described how the Sovrin Network is governed. The centerpiece of that discussion is the Sovrin Trust Framework. The trust framework serves as the constitution for Sovrin, laying out the principles upon which Sovrin is governed and the specific requirements for various players in the Sovrin Ecosystem.

In A Universal Trust Framework, I say “a trust framework provides the structure necessary to leap between the known and unknown.” The idea is that online we often lack the necessary context to reduce the risk around the decisions we make. A trust framework defines that context using agreement, process, and technology so that people can make decisions with significantly less risk.

In this post, I want to talk about how organizations can use the Sovrin Network as a trustworthy infrastructure for creating businesses or processes that require strangers to trust one another. This happens by building domain-specific trust frameworks on top of Sovrin.

Exchanging Claims and Proofs

Let’s begin by reviewing Sovrin-based credentials and how they are used.

Issuers issue and identity owners accept Sovrin credentials that are based on emerging Verifiable Claims standards. Identity owners store these credentials in their digital wallet. A credential consists of a set of claims. Identity owners present proofs based on those credentials to verifiers. Proofs can be about any assertions in the credentials the identity owner holds.

The preceding figure shows how this might work in a specific use case. Suppose your employer is using Sovrin. They issue a Sovrin credential that includes claims about your employment status and current salary. The credential includes a reference to a credential definition (on the Sovrin ledger) that contains your employer’s public decentralized identifier, or DID, (also on the Sovrin ledger) and a reference to a schema (also on the Sovrin ledger) that describes the claims in the credential. The credential is signed by your employer, using their public DID. You store that credential in your Sovrin wallet.

Later, you apply to your bank for a loan. Before the bank processes the loan, you need to prove to them that you’re employed and that you make at least $75,000 per year. Using your Sovrin wallet[1], you are able to prove what the bank needs to know without revealing your actual salary or any other claims that might be in the credential your employer provided. The proof process also ensures, through countersigning, that the bank sees these proofs based on their DID for you even though the credential was issued to you by your employer based on the DID they have for you[2].

Of course, your wallet also holds other credentials from other issuers. For example, you might have a credential from your bank that you can use to prove your account information to your employer or any other party.

The beauty of this approach is that verifiers never need to contact issuers to verify the assertions or understand how they’re formatted. Anything they need to use to verify the credential is on the ledger. This results in immense benefits for scalability and reliability[3].

What Sovrin Promises

The preceding example credential exchange shows how the credential-supported proof provides trustworthy attributes to the bank. But it’s worth teasing that apart and determining why the attributes can be trusted. Let’s start with what Sovrin is promising with respect to the credential that is being issued and the proof that is based on it.

Sovrin’s promise is based on the Sovrin Trust Framework. As I pointed out in Decentralized Governance in Sovrin, the framework governs the operation of the network and the code that it runs on.

Sovrin promises the following:

• The DIDs can be resolved using the Sovrin ledger and the resulting DID document that can contain a public key and an endpoint associated with that DID.
• The schema can be retrieved from the Sovrin ledger and hasn’t been tampered with.
• The definition for the credential can can retrieved from the ledger and hasn’t been tampered with.
• The credential can be validated as not having been tampered with.
• The credential was given to the identity owner with whom the employer has a relationship.
• The proof is about the identity owner with whom the bank has a relationship.
• The identity owner who presents the proof is the same person to whom the credential was issued[4].
• The credential has not been revoked by the issuer.

The Sovrin Trust Framework is a general-purpose or universal trust framework that is meant to provide a set of universal features that form the foundation for trust transactions. The preceding list of Sovrin promises are all part of that trust framework. They are shored up by legal documents, business processes, and technology.

What Sovrin Does Not Promise

The promises made by Sovrin are important and foundational. But what the bank really wants to know is “are you employed?” That requires promises that Sovrin can’t make:

• The identity owner is a real person.
• The employer is a real business.
• The bank is a real bank.
• The identity owner is employed by the employer.
• The salary figure comes from the employer.

If Sovrin doesn’t keep its promises, then the bank can’t trust anything. But even if Sovrin runs perfectly, the bank is still short of the assurances it needs to make decisions. That’s where domain-specific trust frameworks come in.

Domain-Specific Trust Frameworks

A domain-specific trust framework works on top of the Sovrin trust framework and contains the technology, business processes, and legal agreements necessary to trust the content of the claim. For example, in the scenario above, a domain-specific trust framework would enable the bank to trust the proof that you’re employed.

Let’s walk through each of the promises Sovrin can’t make and discuss who can make them and how.

You Are a Real Person

The bank knows you’re a real person because they have a relationship with you, memorialized by the exchange of Sovrin DIDs. As part of their new customer process, they performed a Know Your Customer (KYC) process as mandated by law. They associate the results of that with the DID you gave them to represent you. So when you contact them with that DID, they know the account belongs to a real person.

Your Employer is a Real Business

Knowing the employer is a real business is a little harder. Even if the bank knows the employer by name, how do they know that the credential was issued from that entity. As I pointed out in Sovrin Web of Trust, there are several options:

1. The employer could publish their public DID (the one associated with the claim definition that underlies the employment verification) on their Web site or some other well known place so that it is easy to verify. This method takes you out of the Sovrin system and into the hierarchical public key infrastructure since you’d verify the website using a standard SSL certificate from a traditional certificate authority.
2. They could offer supporting claims that show they are a legitimate business. These claims would come from what are called trust anchors in Sovrin, trusted entities who can prove who they are based on others who vouch for them. For example, the government, acting as a trust anchor, could provide claims to registered businesses. The Government of British Columbia is piloting this right now.
3. The preceding two steps could be used together in a hybrid verification. InfoCert, that largest European cerificate authority, is already a Sovrin Steward and could issue a Sovrin credential to go along with the TLS certificate the issue to the employer. This Sovrin credential would be backed up by the same process they use to verify the business as part of issuing the TLS certificate.

Businesses often have credentials from others that are part of their web of trust — think of all the “Chamber of Commerce” decals you see on the windows of local shops. The employer would have credentials from numerous government agencies, business partners, and trade associations that could all be used to back up the credentials they issue.

The Bank is a Real Bank

The person knows the bank is a real bank for the same reason the bank knows the person is real: the DID exchange. One of the important and often overlooked benefits of a DID exchange is that both sides can authenticate the other. Mutually authenticated connections are the default in Sovrin and one of its most powerful features. This is in contrast to TLS, which has been a one-sided affair in practice.

In our example, the bank is verifying the credential, so it obviously knows that it’s a real bank, but the identity owner want to know it’s real when they open an account. If they did it physically, then they know of themselves, but if they enrolled online, they might have questions. The bank could be validated in the same way as the employer. For example, in the US, financial institutions are certified by different government institutions depending on whether they’re national banks, state-chartered banks, or credit unions. In any case, these certifying agencies could issue credentials to the institution that could be checked by the customer (using their wallet) as part of the enrollment process or at any other time.

You are Employed by the Employer and Have a Certain Salary

The credential itself is making the claim that you are employed by the employer and that the salary is a certain amount. Sovrin links all this up, but the bank would need to validate the claim schema and definition and understand what it means. This validation process would be internal to the bank.

In Sovrin, the schema is a document that is written to the ledger. Think of it as the description of what fields the schema contains and what the fields mean. The schema is readable and understandable by anyone — they are public documents.

Schemas can be reused. Ideally the schema is not specific to the employer, but is used by many employers for employment verification. An industry trade group or a large vendor of ERP systems might, for example, author the schema with inputs from many parties. Doing so would ensure that a wide range of organizations understand and recognize it. The schema becomes a standard, de facto or de jure, for employment verification.

I believe that there will be a relatively rapid agreement on schemas, reinforced by trust frameworks, in many fields. But this does not preclude anyone from creating any schema they want whenever they want for their own purposes.

Claim schema are automatically versioned. When a new schema is created, the original schema doesn’t go away, so credentials issued with the old schema can still be used. Credentials issued with the new schema refer to that new schema and not the old one.

The claim definition references a claim schema and is written to the ledger by a specific entity. In our example, the employer writes a claim definition that references the schema and includes its public DID.

Depending on the use case, an industry group might do more than merely publish the schema. They might also create standards around how the schema is to be used. These standards would be enforced by legal contract and required business processes with compliance attested to by claims from the standards group to any organization creating claim definitions that use the schema. That way claim inspectors could know that the claim was created in accordance with an accepted process, increasing trust in the claim. How would they know? By means of a Sovrin credential from the standards group, of course.

Sovrin’s Role in Subject Specific Trust Frameworks

A domain-specific trust framework is a collection of policies, legal agreements and technologies that provides the context for claims in a given domain. Sovrin Foundation provides a structure and supporting systems for groups defining trust frameworks.

Sovrin works as a globally decentralized dictionary for schema definitions, with no central authority dictating what schemas, definitions, and claims can or can’t be issued. This makes it uniquely flexible. Anyone can issue credentials about anything, enabling the “long tail” of use cases to be easily addressed.

Sovrin Foundation provides the basis for the Sovrin web of trust. As discussed in the Sovrin Trust Framework, Sovrin Trustees provide the foundation for this web of trust. They select Stewards who validate transactions on the Sovrin ledger[5]. Stewards can vouch for others. Anyone using the Sovrin network is part of this general web of trust.

Beyond this general web of trust, domain-specific trust frameworks can determine their own web of trust. This already happens in the physical world. For example, colleges and universities in the US are accredited by independent organizations. Brigham Young University, where I work, is accredited by the Northwest Commission on Colleges and Universities. They already have a process for accrediting member organizations. They could simply rely on that process and any attendant legal agreements to issue and revoke Sovrin credentials that reflect their determinations concerning the accredidation status of member institutions.

Other uses of Sovrin may not have a physical world counterpart. For example, suppose you wanted to start a decentralized version of AirBnB. One of the roles that AirBnB plays is identifying and attesting to certain attributes for renters and hosts. A decentralized AirBnB may want to establish a process for vetting renters and hosts and issue and revoke claims in accordance with that process. This decentralized AirBnB might define and include claim insurance for both renters and hosts in the event the process breaks down. The processes that define how vetting works, the legal agreements that hold parties to the processes, and the provisions for recourse and restitution via insurance are all part of the domain-specific trust framework for this ecosystem.

For anyone wishing to build domain-specific trust frameworks for an existing or planned business, Sovrin Foundation can help with technical advice about schema and claim definitions as well advice on how to go about creating and governing the legal agreements and business processes necessary to create environments where trust abounds.

Endnotes

1. A wallet in Sovrin is an agent that holds credentials on behalf of the identity owner and speaks the Sovrin agent-to-agent protocol.
2. Your employer and bank have a different DID for you to prevent correlation.
3. Specifically, issuers do not need to maintain always-on infrastructure to answer questions about credential validity and credential transactions are done peer-to-peer.
4. Technically it could also be presented by the identity owner’s guardian if the identity owner is in a guardian relationship. But the Trust Framework considers that to be the same as the identity owner presenting it themself
5. When Stewards “validate” a transaction, they are merely achieving consensus with other Stewards about the validity of the transaction, not it’s content. Stewards aren’t making judgments about the assertions inside of any transaction on Sovrin.

Photo Credit: Framework from kaz z (CC BY 2.0)

Originally published at www.windley.com.

Building Your Business on Sovrin: Domain-Specific Trust Frameworks was originally published in Sovrin Foundation Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

The Sovrin Foundation is excited to announce that we have hired of Nathan George as our Chief Technology Officer. Nathan was previously Chief Architect at Evernym, Inc. He has been instrumental in maintaining the Hyperledger open-source Project Indy, which is sponsored by the Sovrin Foundation. Nathan comes with a wealth of experience that will help Sovrin thrive and reach its full potential.

I’m very excited to have Nathan join the foundation. The Sovrin Foundation is much more than an advocacy organization for self-sovereign identity. As I wrote in Decentralized Governance in the Sovrin Foundation, the foundation exists to administer the Sovrin Trust Framework and a significant aspect of that entails designing and implementing protocols, managing Project Indy, and supporting the Sovrin Stewards in their operation of the network nodes. These tasks are technical and having a full-time technology executive focused on this is critical to the success of the network, and the foundation itself.

The Sovrin Foundation technology goals, on which Nathan will have primary focus, include:

• Planning and following a roadmap that outlines Sovrin development
• Implementing a Sovrin RFC and Improvement Project process
• Supporting steward onboarding and operation
• Managing the release process that prepares code for Stewards
• Monitoring network operation and reliability
• Impacting design of the various components of the Sovrin ecosystem
• Supporting feature development through bounties and other developer incentive programs
• Participating in standards processes that impact Sovrin

Hiring a CTO represents a big step along the path to self sustainability for the Sovrin network. A huge part of being self sustaining is technical independence. Having a CTO in the Sovrin Foundation will allow us to drive many technical developments and coordinate our open source projects from within the foundation.

Photo Credit: Circuits from Max Pixel (CC0)

Originally published at www.windley.com.

Sovrin Foundation Welcomes Nathan George as CTO was originally published in Sovrin Foundation Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

Marc Hulty defines governance as “the processes of interaction and decision-making among the actors involved in a collective problem that lead to the creation, reinforcement, or reproduction of social norms and institutions.” From this we can conclude that everything gets governed, the question is whether governance is ad hoc or formal, explicit or implicit.

One of the ironies of decentralized systems is that they require better governance than most centralized systems. Centralized systems are often governed in an ad hoc way because the central point of control can easily tell all participants what to do. Decentralized systems, on the other hand, must coordinate across multiple parties, all acting independently in their own self-interest. This means that the rules of engagement and interaction must be spelled out and agreed to ahead of time, with incentives, disincentives, consequences, processes, and procedures made clear.

The Internet is an excellent example of this. All the computers that connect to the Internet, along with those that route messages between nodes, follow a set of procedures determined ahead of time that cannot be ignored by participants without loss of functionality. These procedures are called protocols and they are embodied in the code that participants in the network — both edge nodes and routers — execute.

Blockchain systems are no different. Their interactions are wholly or partially governed by protocols embodied in code. But these protocols are not emergent properties of the blockchain, rather they are designed by humans who write the code and agreed to by the humans who execute it. Without the design and agreement of humans, the blockchain does not function.

The Sovrin blockchain is a good example. There are two primary components of how Sovrin operates: the design of the protocols and the operation of the ledger. We can ask governance questions about each.

Sovrin’s code is open source — specifically it is the Hyperledger Indy project under the umbrella of the Linux Foundation. This means developers from around the world collaborate to design and build the code that makes Sovrin work. Their decisions are governed in the way of most open source projects: rough consensus and running code with pull requests accepted by a core set of developers who manage the code base. Code embodies the rules that make up the Sovrin protocol. Since the protocol is a critical component of Sovrin governance, how decisions are made about the code is a key component of ensuring Sovrin is governed well.

But with the Sovrin blockchain there is another kind of governance that is not embodied in the code. Sovrin is built on a public permissioned blockchain. This means that anyone can use the Sovrin ledger, but consensus is achieved by a known set of validator nodes. Validators perform a similar function on a permissioned ledger than miners perform on a permissionless ledger — ensuring that each copy of the ledger records the same data in the same order1. Since Sovrin’s validators are part of a known group, we should also examine how this group of validators is selected, organized, and governed.

Decisions about how code is architected, which code is run by validator nodes, and how those nodes operate are made in accordance with the Sovrin Trust Framework, a document that specifies how the Sovrin Network is governed. The Trust Framework is Sovrin’s constitution, defining the operation and organization of the network, and is where the final authority for the Sovrin Network lies. In fact, Sovrin can be said to have a constitutional governance model. The Sovrin Foundation is an international, non-profit organization that represents the collective interests of all Sovrin identity owners. Sovrin Foundation exists to administer the Trust Framework. The Sovrin Foundation clearly and openly identifies the actors in decisions and the processes they use to reach those decisions and ensures they are made consistent with the trust framework.

Sovrin’s Trust Framework is based on a set of shared goals consistent with establishing a global public utility for privacy-respecting, self-sovereign identity. In One from Many: VISA and the Rise of the Chaordic Organization, Dee Hock writes:

In the constructive sense of the word, governance can be based only on clarity of shared intent and trust in expected behavior, heavily seasoned with common sense, tolerance, and caring for others as fellow human beings. This is not to say that contracts, laws, and regulations do not serve a purpose. Rather it is to point out that they can never achieve the mechanistic certainty and control we crave. Rules and regulations, laws and contracts, can never replace clarity of shared purpose and clear, deeply held principles about conduct in pursuit of that purpose.

In the case of Sovrin, that shared purpose and deeply held principles are contained in the Sovrin Trust Framework. The Trust Framework lays out the purpose of Sovrin as providing a global public utility for self-sovereign identity that adheres to a set of thirteen principles2:

• Independence and Self-Sovereignty
• Guardianship
• Diffuse Trust
• Web of Trust
• System Diversity
• Interoperability
• Portability
• Security by Design
• Privacy by Design
• Accountability
• Openness
• Identity for All
• Collective Best Interest

Sovrin embraced these principles to meet the needs of identity owners and protect their data, privacy, and autonomy. These principles guide both the technical development of the Sovrin code and the operational rules for stewards, the trusted organizations who operate validator nodes and connect to the ledger in a transparent way.

Some have pointed to the permissioned structure and the existence of the foundation as a reason for distrusting whether it is truly a decentralized public network. To those people I say, “Look at the Trust Framework and tell me where it falls short.” Often this question is just a knee-jerk reaction to how Sovrin splits governance between code and agreement. There’s nothing magic about code when it comes to governance. It can automate things but it has no special properties when it comes to resisting accumulation of power or autocratic tendencies. Even in permissionless blockchains, change is proposed by the developers and accepted (or not) by miners. These are people coming to agreement or not based on the principles they hold dear.

Sovrin’s Trust Framework makes those principles explicit by providing a documented public agreement (consensus) about them. The process for amending Sovrin’s Trust Framework is also public. The stewards running validator nodes agree (or not) by accepting or rejecting changes. This is the same process we (and other public blockchains) use for managing code changes. It ensures that Sovrin continues to be public and open to all. There is no point of centralization in Sovrin because no single entity can force other participants to bend to that entity’s will. Sovrin is technically, politically, and geographically decentralized to achieve diffuse trust, which enables diffuse control.

Others might wonder how the Trust Framework governs the code that Sovrin runs. While it’s true that Sovrin code is open source and anyone can make contributions, those contributions still have to be accepted by the maintainers of Project Indy to be incorporated in the codebase. Further, the Indy code is not automatically transferred to Sovrin validators to run, but is subject to review by Sovrin’s Technical Governance board and the Stewards themselves.

Those reviews ensure that only code consistent with the Trust Framework is run by validator nodes. These reviews also put appropriate pressure on Project Indy contributors and maintainers to adhere to Sovrin Trust Framework principles, since not doing so could lead to a fork of the project (although not the ledger), with Sovrin developing its own branch of the Indy codebase to protect its interests. Recent events in the blockchain space show that this is not inconceivable, but it would be disruptive and costly to the ultimate success of Project Indy. This neatly aligns incentives between Project Indy and Sovrin. Make no mistake; Sovrin will take decisive action if our principles are threatened.

Participation in Sovrin is open to all. As I wrote in Is Sovrin Decentralized?: anyone can create identifiers. Sovrin does not have “identity providers” because they are entirely unnecessary; identity owners are empowered to carry their own claims. Furthermore, any organization who will publicly agree to the Trust Framework and meets its requirements is welcome to become a Sovrin Steward.

This is the ultimate point: no single entity owns or controls Sovrin, not even the Sovrin Foundation. The Sovrin network is a global public utility that we all own, collectively, just like we all own the Internet. And the governance model of the Trust Framework, along with governance of the open source Hyperledger Indy code run by all Sovrin stewards, has been carefully designed to reflect this. All of this is captured in the Sovrin Trust Framework which is developed and published under an open public process available to all.

The public and open nature of Sovrin supports an unprecedented level of autonomy, privacy, security, and control by the people and organizations using Sovrin. We welcome you and your organization to join us in this important work.

Endnotes:

1. There are many reasons for using a permissioned model, as spelled out in the recent Sovrin Foundation white paper, but one of the most important is cost. Simply put, if the cost of using a ledger can be kept very low, then it will enable people to use a different cryptographic identifier for each relationship, thus reducing correlation risk and increasing privacy. Any blockchain-based identity system must be carefully architected to take advantage of the blockchain without sacrificing the privacy of the participants in the system. If writing transactions to the blockchain is expensive, as it typically is in permissionless ledgers, people are more likely to reuse identifiers (or hashes) and increase the risk of unwanted correlations.
2. See Section 2 of the Trust Framework for a detailed discussion of these principles.

Thanks to Steve Fulling, Drummond Reed, Timothy Ruff, Jason Law, and Daniel Hardman for helpful discussions on this topic that improved the post and made it more clear.

Photo Credit: Bees and Honeycomb from Phil Windley (CC0)

Originally published at www.windley.com.

Decentralized Governance in Sovrin was originally published in Sovrin Foundation Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

I’m very pleased to announce that the Sovrin whitepaper is now available. The whitepaper pulls together in one place detailed information about why Sovrin exists, what Sovrin is, and how it will impact nearly every aspect of your online life. Here’s the abstract:

Digital identity is one of the oldest and hardest problems on the Internet. There is still no way to use digital credentials to prove our online identity the same way we do in the offline world. This is finally changing. First, the World Wide Web Consortium is standardizing the format of digitally-signed credentials. Secondly, public blockchains can provide decentralized registration and discovery of the public keys needed to verify digital signatures. These two steps pave the way to establish a global public utility for self-sovereign identity — lifetime portable digital identity that does not depend on any central authority and can never be taken away.

The Sovrin Network has been designed exclusively for this purpose, including governance (the Sovrin Foundation and the Sovrin Trust Framework), scalability (validator and observer nodes and state proofs), and accessibility (minimal cost and maximum availability). Most importantly, Sovrin implements Privacy by Design on a global scale, including pairwise pseudonymous identifiers, peer-to-peer private agents, and selective disclosure of personal data using zero-knowledge proof cryptography.

The emergence of this infrastructure can transform at least four major markets: identity and access management, cybersecurity, RegTech, and data integration. To provide economic incentives for credential issuers, owners, and verifiers, the Sovrin protocol will incorporate a digital token designed expressly for privacy-preserving value exchange. The Sovrin token should enable a global marketplace for digital credentials of all types and value levels together with ancillary markets for digital credential insurance and permissioned, first-party data (direct from the customer).

As you can see, Sovrin will incorporate a native token for exchanging value in identity transactions. We’re confident that a protocol token for Sovrin will enable use cases that would be unrealizable without it and drive the network effects for Sovrin adoption.

The whitepaper has been a long time coming. We wanted to get it right and make it as clear and understandable as possible. I’m grateful for my co-managing editor Drummond Reed, a member of the Sovrin Board of Trustees and chair of the Trust Framework working group for his diligent efforts in making this a reality. Countless others participated in discussions, made comments, or proofread various versions of the document. And a special thanks to Monique Heileson for her fine work on graphic design, layout, and illustration.

Internet identity has become synonymous with authentication and that’s too bad. Identity in real life is much richer, flexibly and conveniently solving all kinds of thorny problems. Now with Sovrin, we can bring those rich identity transactions online. This paper shows how that happens and why it will impact every sector of the Internet in significant ways. I hope you’ll spend some time reading it.

Originally published at www.windley.com.

Announcing the Sovrin Whitepaper was originally published in Sovrin Foundation Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.