Bitcoin's proponents love to talk about anonymity. The more you dig, however, the more you discover that anonymous transactions are far from Bitcoin's greatest strength. There are certainly steps you can take to protect your Bitcoin identity, but it's hardly anonymous out of the box.
Given that the anonymity feature is widely promoted, it is somewhat ironic that Bitcoin is far more useful as a tool to absolutely verify someone's identity.
When I first learned of Bitcoin, my initial purchases were done via the Bitcoin-OTC channel on IRC. Though I feel fairly comfortable around a computer, the process of establishing my identity for the sake of building a reputation was cumbersome, to say the least. What it is, however, is a public/private key arrangement, similar to what you have with Bitcoin. The fact that you hold the password to the private key is what ensures you are who you say you are.
So, that's all well and good for tying a virtual identity to a public key, but how do we bridge the gap to the real world?
As a member of the Reddit community, I find it hilarious to watch the different ways that people prove their identities in "Ask Me Anything" (AmA) submissions. More often than not, it's a picture of themselves holding a piece of paper that says "Reddit." Honestly, isn't it a little embarrassing that in the 21st century, we prove our identities by taking a picture of ourselves holding a sign?
For those with well-established Twitter or public Facebook accounts, the process can be slightly less archaic, and can involve tweeting or mentioning in your Facebook status that you've posted an AmA submission on Reddit. We can be fairly certain that the only people who have access to those accounts are the people they purportedly represent - though it's definitely not fool proof. Twitter even has their own internal verification system to verify the accounts of public figures.
So, why don't we put this issue to bed, once and for all, and use Bitcoin to make it happen?
What I'm proposing is an online database, either maintained by the government or a trusted organization, that has the following information available to the public:
- Name, City and Country of Residence, Bitcoin Address, and a Photo.
The information could be collected when we register for an election or renew any form of government identification card that we already use. It would only have to be done once, and several tasks would suddenly become easier for everyone.
With our crytographically provable identities, any form of contract signing (bye-bye fax machine), voter registration, or online interaction could be verified as being legitimately tied to us. Smaller clubs or organizations, like university councils, condo owner organizations, etc., where anonymity of the vote isn't important, could easily conduct online voting and have instant counting.
Best of all, I could do an AmA on Reddit and you would know it's legit, Twitter or Facebook account be damned!
The examples I'm suggesting are surely only the tip of the iceberg, but they're enough to give you an idea of how Bitcoin can make our lives significantly easier beyond its application as a wealth-transferring mechanism. I'm definitely curious to hear what other ideas you can come up with.