Trust might be considered the most valuable of intangible assets. Without it, relationships from the romantic to the economic fall apart.
And in a recently launched endeavor by LinkedIn co-founder Eric Ly, now co-founder of Hub, trust rendered digitally may get a boost from blockchain.
Ly spoke with PYMNTS’ Karen Webster about the blockchain initiative, in which individuals can use tokens to carry encrypted personal data to other parties – and only the parties they want to see that data.
Within Hub’s token, then, is verified information, ranging from identification to references (the kind used by job seekers).
The tokens are deployed across the Hub platform via app. In a way, it’s a network that synthesizes and strengthens relationships across a decentralized method.
LinkedIn may have set the stage for networking, but as Webster noted, the time may be ripe for a change in the way people interact and build online interactions.
Said Ly of the LinkedIn model, there are indeed some issues outstanding with platform, namely “the kind of information that people are getting and the veracity of that information.’’
He cited the emergence of fake profiles, and the fact that users can transmit altered work histories or other information at will.
And yet that information forms the basis on which important decisions are made, said the executive, possibly ensnaring unwitting parties who enter professional relationships with those bad actors and end up losing both money and time.
Lest you’ve been sleeping over the past week, the Facebook imbroglio also brings to bear an important question for networking platforms of both social and professional stripes. As Webster posed that question: “Shouldn’t there be governance associated with these players?”
Ly acknowledged that today’s world demands that individuals place trust in institutions or centralized platforms that have promised to be trustworthy in handling information or brokering connections. The centralized model, he noted, has worked “decently well,” until some platforms were shown to have overstepped their bounds.
“I think inherent in this sort of centralized platform is the idea that their motivation is to profit from the data,” said Ly.
Thus, a conflict of interest arises when it comes to governance among users who are interested in keeping their data private for themselves and the platforms that host that data. Ly maintained that in the decentralized world, different forms of governance can hold sway – aiding, too, in dispute resolution.
“We can get to a situation where the members of the various communities can decide … what is appropriate for everyone” within that community, he told Webster.
As noted in the whitepaper published by the company, the “trust stake” offers incentive for trustworthy interactions, across conceivable use cases spanning peer-to-peer networks (where transactions can occur), social networks and online communities hosting chats and forums.
A “trust stake” is pledged by users tied to interactions and transactions – and where tasks prove successful, individuals earn reputations and get both their stakes, and additional rewards, back.
Conversely, if an interaction or transaction does not go as planned, noted the whitepaper, an arbitrator might get involved. If the decision goes to a customer, the trust stake for both customer and contractor also go to the customer.
Getting to scale, as for any nascent company, poses its lures and challenges.
“We have to get users to give us a chance to give something of value to them. So we have to go out and we have to recruit and partner with communities … There are many marketplaces out there today, and services that work with quite established user bases,” he said. He likened the decentralized network and the tokens to tools that can increase the economic value around these communities.
Peer-to-peer marketplaces likely offer a source of early adopters, said Ly, as does the sharing economy, with goods and services exchanged across several different platforms.
Amid those exchanges between parties, establishing identity becomes paramount. In the current world of centralized platforms, a lot of people already have concrete identities – just search on Google to see that truth in evidence.
“We take the view that we need to take these existing forms of identity data and start putting them on blockchain,” he told Webster.
Information from the banking and payments systems may indeed find their way to the trust network, said Ly, as a use case would involve certifying the identity of an individual involved in financial services – for the obvious reasons.
“There’s a lot at stake and those are scenarios of value,” he said, “and we hope the technology that we are developing will be worthy to capture those kinds of use cases.” In this country, at least, the FICO score is dominant, but Ly posited that there could be other scores or measures as rendered across the trust network that could prove to be just as valuable, or even more valuable, than FICO.
As for the mechanics, Ly said that when it comes to cryptocurrencies that might be used or hold sway, “we’re kind of agnostic there, because we know we believe in the future of cryptocurrencies, whether bitcoin or Ethereum or something else.
“We want different or multiple kinds of products to assist the people on our system and to help people transfer that value and various kinds of transactions,” he continued. “We’re open to what that implies from a technological standpoint … here also continues to be a future around fiat currency. So it’s very much a part of the answer.”
“I’d like to believe that we are creating an ecosystem,” said Ly, who added that “with the idea that there is this underlying layer that will be available on the internet that people are invested into and benefiting from.”