Perhaps one of the biggest characteristics associated with bitcoin transactions is anonymity, as transaction verification occurs through a complex algorithm instead of checking identities. However, it is also this very characteristic that has made the use of bitcoin prevalent in criminal activity and underground markets, earning the ire of government officials and financial regulators.
Australian startup company IDentabit plans on making an identity-based bitcoin alternative in order to help the cryptocurrency get rid of its association with illegal dealings and money laundering. This could also help bitcoin and blockchain-based products to be more compliant with existing regulation.
Bitcoin Plus Identities
Even with the shutdown of Silk Road and increased oversight on bitcoin transactions that might involve criminal activity, virtual currencies are still rampantly used by hackers and in ransomware attacks. This has made it all the more difficult for authorities to track any payments, keeping most governments skeptical about bitcoin.
While the underlying technology called blockchain holds tremendous promise in disrupting various industries with its more practical applications, authorities seem intent on stifling innovation with compliance. As a compromise, IDentabit is seeking to create an identity-based alternative in order to let bitcoin developments push through without the notion of criminal activity.
Since IDentabit is developing a permission-based ledger, it doesn’t necessarily expose all transactions for public scrutiny. It is a product of collaboration between Thinking Actively and the Virginian software company Cryptonomex. As of this writing, the company claims to be able to process four times as many transactions as MasterCard and six times as many as bitcoin network.
On its About Page, IDentabit states “We are driven by a desire to see decentralized technologies disrupt and disintermediate. We believe the fight to see Bitcoin accepted by regulators is lost and is undermining the possibility of seeing a neutral global currency gain acceptance.”