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Entrepreneurs Plan Identabit; Identity-Based Bitcoin Alternative

Last Updated March 4, 2021 4:45 PM
Lester Coleman
Last Updated March 4, 2021 4:45 PM

xidentabit-logo.png.pagespeed.ic.gZLC8rgfmuAn Australia-based startup has announced plans for a digital currency called Identabit that will enable regulatory acceptance by way of user association. The startup, Thinking Active, characterizes Identabit as the first identity-ensured, decentralized currency. It represents a way to liberate decentralized currencies and will be an alternative to bitcoin, according to a recent press release. 

Identabit is the result of a collaboration between Thinking Active, owned by New York software entrepreneur John Underwood, and Cryptonomex, a Virginia-based software company led by Dan Larimer. The press release identifies Larimer as the principal architect of the Blockchain 2.0 project, BitShares. (Bitshares, according to the release, was the first chain to introduce decentralized autonomous corporations (DACs), smart contracts, a decentralized exchange and delegated proof of stake (DPoS), a scalable way to confirm block chains.)

Identity-Ensured Bitcoin Alternative

One goal of Identabit is to protect decentralized currencies with what Underwood calls an identity-ensured bitcoin alternative.

With the increased regulatory attention directed at bitcoin, brought on by the stream of crime empowered by anonymity, we concluded that there was a need for a chain that enabled AML/CTF compliance, enhanced funds security, denial of crimes empowered by anonymity, and ensured security of transfer by way of user association

Underwood said.

The Identabit website  states that bitcoin’s fight to be accepted by regulators has been lost and is hurting the chances for a neutral global currency to gain acceptance. Governments will not ignore issues related to anonymous cross-border transactions. A decentralized alternative is needed or banks and centralized operators will suppress decentralized technologies.

Underwood said Identabit can be described as a permission-based ledger that allows proof of reserve that does not subject transactions to public scrutiny. He said there are benefits in offering a choice between anonymity and identity.

Identabit also addresses P2P/AML/CTF compliance, user-issued funds transfer, privacy and transparent governance.

Identabit Poses Development Challenges

Using a decentralized block chain to provide an identity-ensured currency has posed its development challenges, the website notes. The website expands on the challenges of transaction identification, block chain auditability, transaction privacy, theft prevention, decentralized governance, institutional integration, simplified registration, reversible transactions and more.

An important Identabit feature is transaction scale, the release notes. Using DPoS, the team has been able to benchmark transaction capacity that exceeds that of Mastercard’s claimed 24,000 TPS. Such cale is important if IDentabit is to replace existing payment networks with P2P transactions.

Underwood said the growing interest from institutions in block chain technology has motivated the timing of Identabit’s release. He noted many institutions are collaborating with IBM and Ethereum. These teams are interested in building institutionalized identity-based alternatives.

Featured image from Shutterstock.