Advisory Verification Tech – ICO’s – Blockchain
Verification is about validating information that one entity makes, with regard to agreement by another entity to which the information is related. For example, verification of information between an employee and an employer relies on the agreement of both parties of a relationship with each other.
-By Kartik Mandaville, CEO & Founder, SpringRole
The necessity of advisor verification for ICOs
It is seen that many ICOs and blockchain companies put false information on their website, in order to fraudulently gain the trust of potential investors. This is obviously not leading to an ideal scenario for the crypto world, and is causing many issues related to trust between advisors, investors and legitimate companies. Of all the industries today, the blockchain should not have problems of trust and verification!
The association with high quality, influential advisors makes an ICO more credible, and as a result, that is one of the primary pieces of information that is fudged on an ICO website. Many ICOs claim to be advised by individuals that they are not associated with in reality. Moreover, there is no way as of now, to verify the genuineness of this information by a potential investor.
When ‘fake advisors’ are exposed, this creates a multitude of problems for everyone involved. The reputation of the advisor in question suffers, the reputation of his/her associated companies suffers, and it leads to an overall decrease in trust levels among investors.
The use of the blockchain in this situation
There needs to be a trusted middleman between two parties making a claim to verification, one that cannot be tampered with or altered in anyway. This middleman is usually both a blockchain dApp, as well as smart contracts through which the format and architecture of solutions is decided. Once a middleman like this is constructed or devised, it can be used for a variety of different verifications.
An example of such an architecture
Here’s an example of how such a system can be built:
1. User comes in and registers their company on the dApp.
2. The registration of the company requires the user’s (personal) ETH address that is used to identify him as the owner of the company.
3. An ETH address is generated for the company that the user downloads as a keystore file (encrypted with a password)
4. The company owner adds advisors — their name and their email address are needed. The owner also pays a fee for the verification.
5. The company owner then interacts with the blockchain to put his advisory claims up on the blockchain. He has two options:
a. Sign the message that claims his advisors. The dApp writes the transaction to the blockchain.
b. The company owner signs and writes to the blockchain.
6. The advisor gets an email about an advisory requests. He comes to the dApp and either logs in or signs up.
7. Once he accepts the advisory, he also has an option to either sign the transaction or sign and write the transaction to the blockchain.
8. One the transaction is confirmed, anyone can see it as confirmed on the company profile page.
What is the advantage here?
The advantage of such a method is that using the blockchain, a user/investor can very easily verify the advisor information of an ICO company. This increases trust levels and the investor then knows that they are investing in a genuine team.
However, it may not be possible for everyone to be able to use the system at its core, since it would require the knowledge of the technicalities of the blockchain and how it works. Hence, the dApp must provide a way to let the user sign the message on their ETH address, but should write the transaction on the blockchain by itself.
The role of ‘signing’
The user will sign a formatted JSON string that would mention all the information of the verification claim – for example, the company claiming a certain individual as an advisor. This string will be signed with the company’s ETH address, and will be then saved on to the blockchain.
Using this method, it is easy to identify whether the string was signed by the entity that it claims to be signed by. If the information is updated, a new transaction can be written with the string signed by the entity that is making the change – the company or the advisor – and the previous transaction address is also mentioned, for easy access to past information.
The result of the signing procedure
This results in a ‘stateless contract’ which by itself doesn’t hold any information, but plays the role of a facilitator of transactions. This contract only writes information to the blockchain, and helps define the format of the string that resides in the transaction.
Since the contract does not check for the format of the data, most of the validation and standardisation of the format inside the JSON is done by the dApp.
This leads to faster speed of transactions, and a lower rate of data stored and transferred every single time.
Altering or changing the relationship on the blockchain
If the company and advisor decide to alter or call off their relationship, this information can also be easily updated on the blockchain. It is a simple procedure – a new transaction has to be created with the updated details. A relationship can be deleted by setting a flag of invalidation.
The blockchain does not have an identity management system – this means that while messages can be checked for authenticity by the ETH address, the ETH address cannot be checked for authenticity with the individual holding it. This is done outside of the blockchain, by companies like SpringRole.
It is without a doubt that a verification system is required in today’s online world. It is currently possible for anyone, anywhere to upload whatever information they desire about themselves or others. The amount of information on the Internet is increased exponentially day by day, and this makes it all the more essential that a verification system be put in place.
There is a very high potential by the blockchain to disrupt this and introduce a verification system that will turn the problem of fake information on its head. However, blockchain is just the electricity – there needs to be an arsenal of machines, the dApps that will truly bring this to the masses.
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