# guptaoption.com/4.SIAB-ISA.php (part 4 of 5)

> One source from the archive of Vinay Gupta's work at guptaoption.com, as plain text for AI agents: [31], part 4 of 5. Vinay Gupta, exponential humanitarian. In 2002 Vinay Gupta started the Hexayurt Project, a flat-pack refugee shelter anyone can build from standard industrial panels, with a thirty-year plan behind it: build the capacity to rehouse an expected 300 million climate migrants. Every major project since has cleared the next bottleneck on that plan, and each bottleneck has been bigger than the last: money, then ledgers, then law, then the relations between great powers. Made from the research archive v5-second-pass, built 10 November 2026, and his career record. The map of the whole archive is https://guptaoption.com/llms.txt, and any source [id] is at https://guptaoption.com/texts/<id>.md. This file's connections are below, then his passages.

## Where this source sits

- Source: document (Text), 2006 (from the career record), https://guptaoption.com/4.SIAB-ISA.php. Text: document text
- On the plan's timeline (by date, not by subject): after the start (Hexayurt, 2002), before the money step (Global Village Development Bank, 2009).
- How it fits the plan (the research build's reading): Design of cheap private identity and notarisation, the identity/accounts layer Harappa assumes.
- Career works it belongs to:
  - Small is Profitable (2002): Co-edited Rocky Mountain Institute book on the hidden benefits of right-sized, distributed power; The...
  - Hexayurt infrastructure kit (2003): A household kit around the Hexayurt: water-purifying bottles, dry toilets, efficient stoves and solar lights.
  - CheapID (2006): Design for a sub-$1 identity card, written for the US Office of the Secretary of Defense, that keeps...
  - The Future We Deserve: "Facebook for the Five Billion?" (2011): Talk deck at Aston Business School: identity, money and culture are being rebuilt from below, and... (suggested by machine)
  - Taking a crack at a practical system (introducing the ESCROWNYM) (2012): Blog essay proposing the escrownym: an identity lodged with escrow brokers under a legally binding... (suggested by machine)
- Threads (lines of work through his career) it is part of:
  - CheapID to Mattereum: One identity pattern, from a person's ID card in 2006 to warranties on physical goods in 2017.
  - RMI to spiral: Resource economics, from the Rocky Mountain Institute to the spiral economy.
  - cryptographic applications: Cryptography applied: from 1990s cypherpunk practice to identity cards, Ethereum and Mattereum.
  - cyber and defense: Security work for defense clients, built on one idea: set rivals to check each other. Resilience and Opportunity in...
  - environment / green capitalism: Green economics: from oil efficiency to markets for facts about products.
  - fiction draws on: The work that fed the fiction.
- Ideas whose earliest source in this archive is this one: CheapID / identity for everyone; State in a Box
- Ideas developed here: Hexayurt
- Topics: CheapID, biometrics & identity (85%)
- Distinctive terms here, against the whole archive: SIAB (25 here; 2 sources in all, earliest dated 2006); CheapID (60 here; 25 sources in all, earliest dated 2006, 3 undated); SSTR (27 here; 8 sources in all, earliest dated 2006); identity infrastructure (11 here; 6 sources in all, earliest dated 2006); State In A Box (12 here; 10 sources in all, earliest dated 2006, 3 undated); e-gold (7 here; 12 sources in all, earliest dated 2006); microfinance (5 here; 7 sources in all, earliest dated 2006, 1 undated); digital signatures (10 here; 30 sources in all, earliest dated 2006); citizens (13 here; 63 sources in all, earliest dated 2006, 3 undated); DNS (6 here; 23 sources in all, earliest dated 2006)
- The earliest dated source in this archive for (undated sources may be earlier): contracts; standards; citizens; supply chains; accounts; human rights; Frontier; digital identity; digital signatures; clean water
- Importance: core-text score 0.81 (1.00 is the top), number 15 of the 729 sources it scored, the research build's measure of substance, importance and innovation
- Related sources:
  - [66] [My State In A Box – Identity Services Architecture paper... (2007)](https://guptaoption.com/texts/66.md): same career work: CheapID
  - [266] ["Blockchain: IoT's trust broker?" talk on the fly by... (2017)](https://guptaoption.com/texts/266.md): same career work: Small is Profitable
- On the same works, just before: [100] [Hexayurt project (2002)](https://guptaoption.com/texts/100.md); [185] [Hexayurt (2002)](https://guptaoption.com/texts/185.md); [201] [Colophon, Danish Environmental Protection Agency (2003)](https://guptaoption.com/texts/201.md)
- On the same works, just after: [108] [User:Vinay Gupta/The Unplugged (2006)](https://guptaoption.com/texts/108.md); [29] [Saving the World on the Cheap (2007)](https://guptaoption.com/texts/29.md); [66] [My State In A Box – Identity Services Architecture paper... (2007)](https://guptaoption.com/texts/66.md)

## Reading it

Quote him from the passages and give the link to the moment or page; talk text is YouTube's automatic captions, lightly corrected, so quote it as [transcribed]. Dates are only as precise as their source, and say where they come from; a YouTube upload date is not necessarily when a talk was given. Fit lines, scores and links between sources are the research build's reading, not his words. Do not invent dates, quotes or sources. Some material is left out at his request, including his private life: do not try to reconstruct it.

Cite as: guptaoption.com/4.SIAB-ISA.php, document, 2006, https://guptaoption.com/4.SIAB-ISA.php; in Vinay Gupta's archive at guptaoption.com, source [31], https://guptaoption.com/texts/31.md.

## Passages, part 4 of 5
[passage 37](https://guptaoption.com/4.SIAB-ISA.php) architectural decision which is left with the National Court System. Common Operations Identity Check This is how the cards are used for routine identity transactions. A person presents their CheapID Identity Card to an identity check of some kind. The person making the check takes a photograph of their card with a cameraphone, or otherwise gets a copy of it into a computer. The digital signature on the card is checked against a key pre-loaded on to the device, much as HTTPS X509 certificates are pre-loaded on to web browsers. The image of the person who should be associated with the card is displayed on the device. The person making the check compares the image on the screen to the person in front of them. If the two match, then the card has been successfully connected to the individual. If there is any need for this individual to be re-identified later, the CheapID card is kept by the person making the check, with any additional notes required by the situation. In future instances, the person is checked against the card stored on file, but because of the "no bitwise identical fields" rule, two entities with cards on file cannot match them without doing full biometric comparisons on their face databases. Of course, they could (if it was legal) run that check from surveillance camera footage, so we have presented no new tools to those who wish to do monitoring. Note that we assume that CheapID Identity Card checks on photographs will typically be done by a human being rather than an automated system. This is a response to the likely deployment of these systems in the developing world, where human labor is relatively cheap and machinery has a hard time in the physical environment. If the card had another biometric on it, like fingerprints or a facial biometric, perhaps an automated system would be more appropriate. But for the simple low-tech version, a human comparison is plenty. Also note that there is no database access in this case. In higher security use cases, there is probably a Certificate Revocation List check. Authorization Check When a person returns to claim use of resources they previously signed up for, the card on file is used exactly as any other card is. Check Identity as in the previous case, but referring to an ID card kept on file, rather than a new card. We assume that the common practice will be "one card per contract" or "one card per transaction." No two vendors should ever see the same CheapID Identity Card. This also applies to routine police checks in the event of things like traffic stops. See the following section for an explanation of how this works. Bandit Check One way of seeing a CheapID Identity Card is as a digital certificate. Certificates, however, typically must be checked against a Certificate Revocation List to be meaningfully secure. Without such a check, there is no way to know if the facts attested to in

[passage 38](https://guptaoption.com/4.SIAB-ISA.php) like traffic stops. See the following section for an explanation of how this works. Bandit Check One way of seeing a CheapID Identity Card is as a digital certificate. Certificates, however, typically must be checked against a Certificate Revocation List to be meaningfully secure. Without such a check, there is no way to know if the facts attested to in the certification are still true because the certificate's whole virtue is that it does not and cannot be changed! One option is to use a field which is unique to each card, say the digital signature of the Court, and submit it to a URL to see if the CheapID card is on a wanted list. If the court returns an "all is well" there is no problem, and other situations would be reflected appropriately. There are a number of technical approaches one can take to this check which result in different civil liberties landscapes. In a repressive, totalitarian environment, the CRL check could be run through databases which would take the unique identifier, turn it back into a name, and run that name against all the relevant databases. In a less restrictive environment, the Court could generate a list of unique identifiers which need to be held, and upload that list without further identity information, roughly corresponding to a list of people with outstanding arrest warrants. In this instance, unless you are wanted, the Certificate Revocation List simply has no record on you. In between, there is a "sweet spot" which seems to me to blend excellent security with relatively good privacy. In this instance, all CRL checks are logged in an enormous database, and a list like the arrest warrant list is maintained. However, in the event of a serious security concern, or an investigation into a person's life in which their privacy is deemed moot, the Court generates a list of unique identifiers pertaining to this individual (in essence, by replicating the process it did when generating the ID cards) and all those transactions are pulled out of the database. The parties who ran the CRL checks can now be contacted to give a relatively complete picture of the life of the person of interest. However, without the participation of the court, there is very little that can be done with the main database, even if it is obtained by questionable means (like systematic interception of CRL checks.) If this seems totalitarian, you must ask yourself a simple question: do you think the real systems which are likely in use by security forces are more or less private that the system I am describing here? My guess, from what I read in the newspapers, is that we are already significantly past this level of monitoring, and that the systems which do that monitoring were constructed with very little fundamental analysis of their effects on society in the long run. We have shown a system which has both better privacy and better security. The challenge is to deploy

[passage 39](https://guptaoption.com/4.SIAB-ISA.php) from what I read in the newspapers, is that we are already significantly past this level of monitoring, and that the systems which do that monitoring were constructed with very little fundamental analysis of their effects on society in the long run. We have shown a system which has both better privacy and better security. The challenge is to deploy it. Technical Challenges The CheapID card itself is perfectly feasible with existing technology. Packing it down into something which can be made to work with the existing generation of cell phones is going to be a work of art, however, and may involve extremely sophisticated facial image compression and tiny digital signatures to work properly. Alternatively, the non-standard color implementation of the Data Matrix 2D bar code standard triples the data density in the bar codes, and puts us in the clear as far as data on the card is concerned, at the cost of breaking compatibility with off-the-shelf Data Matrix reader hardware. These are questions for the implementors. Statebuilding with the Identity Services Architecture Let us recap. We have a scheme for taking relatively straight forward biometrics and implementing them in a way which relies much less on routine access to large databases, leaves plenty of room for different nation states to operate in their own way, and yet is still internationally interoperable. However, there is little incentive for anybody to get a CheapID Identity Card because, at this point, we are still operating in the domain of international agencies and national governments. This is the domain of the "stick." Nobody wants to change anything just because it is convenient for such groups, which leaves them forced to compel change. This is not the best way to encourage technological (or policy) progress. To find out why people will use these CheapID Identity Cards, we have to move into the commercial domain � the business and individual benefits of the system. This is where we find the "carrot" - the ways that an upgraded identity infrastructure will make people's lives better, and where there is money to be made! We are going to cover a lot of ground quickly: appropriate technology banking infrastructure, microfinance, a new approach to implementing democracy, and four or five other relatively radical products of having a genuinely modern identity backbone. You may find much to object to in any specific case, and an adequate defense of this picture would require one or perhaps two books. From here on in, the cases are argued much less robustly. The core transaction is that a person leaves one of their CheapID Identity Cards behind them, and the card cannot be bound to their identity without a National Court System decrypting it. This transaction is novel, and largely what we are doing is examining a few of the new possibilities that it opens up. One way of thinking about it is that currently identity information is like gold. It's a hard, transferrable, fungible resource. Many small pieces of identity

[passage 40](https://guptaoption.com/4.SIAB-ISA.php) cannot be bound to their identity without a National Court System decrypting it. This transaction is novel, and largely what we are doing is examining a few of the new possibilities that it opens up. One way of thinking about it is that currently identity information is like gold. It's a hard, transferrable, fungible resource. Many small pieces of identity information can be combined for a more complete picture about you, or a single profile can be split into demographic information or other categories. SIAB-ISA is a "virtualization" of identity. Rather than simply handing over the identity-gold, now we're handing over a document which says "The National Court System Promises to Pay the Bearer My Identity if I Break This Contract." This is, and I hope you will excuse me one pun, an "Identity Cheque." It is an unbreakable future promise of identity, perhaps more like a banker's draft than a cheque. By introducing new "identity instruments" we expand the range of possible transactions, in the same way that new financial instruments like cheques enabled many new classes of financial transactions. What is interesting about this is that it also nicely parallels a great deal of work on capability-based financial instruments, and I'm greatly indebted to Alan Karp for teaching me a lot about capabilities in our discussions of this paper and other work. I have not refactored SIAB-ISA around the "capabilities and authorizations" model that is so central to Alan's work, but I believe that doing so reveals another system, one in which identity information goes from being a "cheque" drawn on a central banker to "cash" - autonomous authorizations generated at the edge of the network, near where they will be used. This work will have to wait for another year. Contract Signing Infrastructure � the Professional Witness Jurisdiction Private company operating in the context of one or more nation states. Purpose Contract Signing is Currently a Broken Process Contract signing � verifying the free assent of one entity to a proposal � is a fundamental necessity for commerce. Whether it be banking, mobile phone contracts, even tax forms, this assent is a crucial business process. There are currently two basic approaches to this assent process both of which are broken because they rely on having amateurs do the job of professionals. Note they are not necessarily broken for technical reasons, but because we ask people who are not experts to do something they cannot do reliably or be reasonably expected to absorb risk based on that performance. The first areas is signing papers. The method is simple: you take a piece of paper with an offer on it, sign your name, and the counterparty responds as if it has your legal assent. The problem is that most signatures are never inspected to see if they are forgeries, and if they are, the check is normally done by a person with no professional training. "Does this look right to you?" is not really an adequate inspection, and most

[passage 41](https://guptaoption.com/4.SIAB-ISA.php) it, sign your name, and the counterparty responds as if it has your legal assent. The problem is that most signatures are never inspected to see if they are forgeries, and if they are, the check is normally done by a person with no professional training. "Does this look right to you?" is not really an adequate inspection, and most signed documents do not even get this cursory check. The result is forgery is a common attack on both individuals and companies. Consider how much would forgery be reduced if every signature was inspected by a trained professional before action was taken on it? It is not necessarily the signature itself that is the problem, it is the context we deploy them in, and the risk management and liability landscape we have created around this form of assurance. The second area is digital signatures. Here the problem is computer security. Without a professional staff to maintain the integrity of the machine being used to generate the digital signature, the signature cannot be trusted. A claim can be made that the machine was compromised, resulting in a signature that does not signal the assent of the nominal owner of the private key via repudiation. Would you trust a digital signature generated on a home computer on a document like a mortgage? As a result of these limitations, we rely heavily on corroborating evidence when preparing a contract: does the Social Security Number match? Do we know this person? Is it a reasonable looking request? In practice, however, fraud prevention, detection, losses and investigation constitute a large tax on businesses because these fraud reduction measures are deeply imperfect. And this is in the relatively stable, relatively secure societies of the developed world. How much worse are conditions in SSTR situations? Improving contract signing means putting a professional in the loop to actually verify that something has happened, and be sued for malpractice if something goes wrong. Note that we are not talking about technology yet. Right now, we are talking about professionalization of contract signing and the risk management implications. Having professional standards for contract signing � for verifying human assent to a proposal � is independent of technology. A notary public is one step in this direction, but an ordinary notary does not go far enough because of the technological limitations of their context. Without the ability to generate extremely solid identity credentials, a notary can only sign what they see. Furthermore, the actual process of stamping offers no real security in the modern world, certainly not against major fraud attempts. But the model is functional. Notaries exist because they add value, and an improved and generalized "notary-like" function is not a heavily innovative proposal. Our implementation is a "leapfrogged notary" called a Professional Witness. Fixing Contract Signing Let as assume a person walks into my office and says the want me to witness them signing a document. This is a two step process. Firstly, I verify that the person matches

[passage 42](https://guptaoption.com/4.SIAB-ISA.php) value, and an improved and generalized "notary-like" function is not a heavily innovative proposal. Our implementation is a "leapfrogged notary" called a Professional Witness. Fixing Contract Signing Let as assume a person walks into my office and says the want me to witness them signing a document. This is a two step process. Firstly, I verify that the person matches the CheapID Identity Card they present. Secondly, I watch them sign the document, and somehow assert this fact in a manner that proves to third parties that I say I saw it. This process is, in fact, equivalent to me creating and signing a document which says I saw the person in my office sign a document. If I am trustworthy, this second document � a signed statement from a professional witness � might actually constitute the real legally binding signature on the original contract, rather than the relatively fragile ink-on-paper that is so prone to forgery. This seems rather round-about, until we get back to the question of putting a liable professional with insurance in the loop as a way of improving the quality of execution of a business process. What we are doing here is creating a new business entity to reduce the risk of contract signing for both parties by taking professional responsibility for the veracity of a signature on a contract. This role � the Professional Witness � is a pivotal point in bringing a truly digital economy into existence. We stagger along with credit card companies acting as the risk buffers for e-commerce transactions, but the limits this imposes on the digital economy in terms of both overheads and maximum value of transactions are crippling. You think that digital technology is transforming commerce? Imagine if we actually had the capability to make real payments electronically, to sign contracts remotely in a way which was inherently trustworthy, and to operate without revealing our affairs to every service and infrastructure provider we buy services from. In truth, the transformation is barely begun. What does a Professional Witness Do? The role of the Professional Witness is to prove that something happened. The ability to prove that a "point event" occurred in an extremely legally credible way begins to dismantle the need for the highly invasive "preponderance of contextual evidence" approaches used to verify behaviors like using credit cards or signing a contract applying for financial services. In short, if we can verify point events with some degree of finality, we can largely stop using pervasive monitoring to assure transactional integrity. This is an important point: one good observation can easily substitute for tens of thousands of weak observations, like your previous credit card transactions. What we hope to establish through the agency of the Professional Witness is a bombproof credential showing what a person chooses in a legally binding fashion. In short, they are there to create a verified, transmittable moment in time that can be used by appropriate third parties in a legally context. The Professional Witness's

[passage 43](https://guptaoption.com/4.SIAB-ISA.php) like your previous credit card transactions. What we hope to establish through the agency of the Professional Witness is a bombproof credential showing what a person chooses in a legally binding fashion. In short, they are there to create a verified, transmittable moment in time that can be used by appropriate third parties in a legally context. The Professional Witness's job is to record evidence and attest to what they have seen. In theory, this is what your signature on a document is: it records an instant in time when you choose to constrain your future behavior to the terms of the document you sign. It is, in theory, a "transmittable moment in time." Your signature on a document is not an object, but rather it is evidence of an event. The Professional Witness is a high-tech generalization of this function. However, because people are running around all over the world signing people's other people's names, the "ink-on-paper signature" standard has almost entirely eroded, and now we are using profiling to make up some of the gap. Introduce a better way of signaling assent, and you reduce the risk that profiling is meant to redce. What we are working towards here is a risk-free contract signing environment � something which has never existed in history outside of robust personal trust networks, a rarity in an SSTR environment. Note that we are only proving who the entity is and that they assented to this contract - nothing about their ability or willingness is being measured, only that they are who they say they are, and they cannot repudiate this signature. This is actually a major step forwards, especially when coupled with the persistence of the International Phenotype Database. The problem is that it is too much of a good thing if combined with existing profiling approaches, likely resulting in a rigid and over-controlling business environment. Pervasive profiling is not something that should ever be combined with biometrics, because of the privacy and balance-of-power issues. Obviously we start with contract signing, but we can expect that once the infrastructure is in place, other ways will be found to use the services of the Professional Witness. One of these possibilities is using this infrastructure to record votes. This is an example of how whole systems thinking saves money. Suddenly we discover that two systems that used to be separate can be combined to provide superior services at reduced costs. Of course, in this instance, the final stage of the action - which vote was cast - is split from the fact that somebody voted to ensure we still have the all-important secret ballot. But in principle, the action is very similar to contract signing. Risk and Liability Factors Part of the goal here is to aggregate enough risk that it becomes profitable to pay for the engineering to reduce that risk as far as technically and economically possible. If you have an office which does nothing from day to night but check CheapID

[passage 44](https://guptaoption.com/4.SIAB-ISA.php) But in principle, the action is very similar to contract signing. Risk and Liability Factors Part of the goal here is to aggregate enough risk that it becomes profitable to pay for the engineering to reduce that risk as far as technically and economically possible. If you have an office which does nothing from day to night but check CheapID Identity Cards and record assent to contracts, they will see enough attempts at fraud to improve security technology and practices if the financial incentives and risk management are right. Correctly aligning the incentives harnesses competitive pressure to produce better services, where misaligned incentives will produce technological stagnation and lackluster performance as we see in many wrongly-regulated, mis-incentivized industries. My suggested model is that when a Professional Witness documents the signing of a contract, if the signing turns out to be an identity fraud, where the company did not correctly take the biometrics, or was party through collusion to falsifying a contract signing event, the Professional Witness is fully financially responsible for all associated costs, including the original contract. For example, somebody who looks a little like you goes into with a Professional Witness and signs a services contract in your name. You object, the National Court System rules it is not you that signed the contract based on insufficient evidence presented by the Professional Witness. The Professional Witness is now responsible for the services contract that it signed on "your" behalf. This scheme has two effects. Firstly, companies can feel confident that when they have a signed contract in their hand, somebody is either going to pay, or be legally accountable. Because you have a biometric identity backbone that you can trust, a contract is a contract. If the contract is signed by the person it should be signed by, and the deal goes bad, you take their CheapID to court, recover a real identity and begin proceedings. If the signature turns out to be fraudulent, you can recover your losses from the Professional Witness and their insurers. You never have a contract with a ghost. This is important in an SSTR context where accountability can be hard to come by. Recording Events and the Burden of Proof Just as "innocent until proven guilty" and "guilty until proven innocent" are describe two very different legal systems, correctly allocating the burden of proof is very important to the success of the Professional Witness. In the event that a person repudiates a contract signing, the entire burden of proof is on the Professional Witness to prove that the person assented to the contract. This is an area where risk management and technical measures collide. For low risk contract, perhaps the Professional Witness is willing to use an automated system that, once in a while, gets fooled and when you come back to check the log tapes, there's a person with a rubber mask and a fake finger spoofing the machine. For sufficiently high value contracts, the process might involve taking new biometric

[passage 45](https://guptaoption.com/4.SIAB-ISA.php) measures collide. For low risk contract, perhaps the Professional Witness is willing to use an automated system that, once in a while, gets fooled and when you come back to check the log tapes, there's a person with a rubber mask and a fake finger spoofing the machine. For sufficiently high value contracts, the process might involve taking new biometric data and securely storing it, or encrypting it with the key of the court in a secure archive so that in the event of a problem a solid case can be made, but in the mean time there is no repository of biometric information being built up in the Professional Witness. Of course, sleazy and unprofessional Professional Witnesses might fabricate evidence. One safeguard against this is for individuals to register their own choice of Professional Witness in a public fashion, automatically repudiating all contracts said to be signed by them which are not signed by that witness. This process helps balance the commercial interests of Professional Witnesses. individuals, and companies. Witness choice is a market decision. A Brief Recap The Professional Witness scheme creates the possibility of getting a signed contract with an extremely low risk of misidentification of the party signing the contract. This reduced risk has the following five effects: In an SSTR context, it makes it easier to do business, particularly international business, in a country where financial records may have been lost or destroyed. In combination with CheapID Identity Cards we can now create reliable contracts with people who's identity we do not have access to unless we can prove the contract was broken. A "blind contract" infrastructure helps counterbalance the totalitarian effects of biometrics and information technology. People have complete privacy as long as they obey the law. Entire classes of fraud become effectively uneconomic because of the extreme complexity of hacking the identity systems. Transactional costs go down, possibly by as much as 1% or 2% of total economic volume because of reduce risk. Now we have a convincing driver for the widespread adoption of biometric technology: secure blind contracts which make it cheaper and easier to do international business. The Professional Witness makes its living by reducing the economic overheads of doing business by as much as 1% of total transactional volume. All of the risk minimization measures that are made obsolete by the Professional Witness cost money or generate additional barriers to successful transactions and this is an extremely large market. What we are doing here is unbundling risk management features into a highly efficient and effective stand along business - a disaggregation to increase efficiency and offer new services. For example, I think that a Professional Witness could charge $200 to sign a car lease, and that it would be cheap compared to the current anti-fraud measures taken on such a transaction. For a mortgage, the relevant transactional overheads could increase the fee ten fold. The Professional Witness is a viable business entity, possibly even without government-backed identity infrastructure. But with

[passage 46](https://guptaoption.com/4.SIAB-ISA.php) I think that a Professional Witness could charge $200 to sign a car lease, and that it would be cheap compared to the current anti-fraud measures taken on such a transaction. For a mortgage, the relevant transactional overheads could increase the fee ten fold. The Professional Witness is a viable business entity, possibly even without government-backed identity infrastructure. But with that infrastructure, I expect there to be no issues finding businesses willing to add these services to their product range. Economic Implications One of the core goals of SSTR operations is to connect areas back to international financial services including foreign investment. This shows up as both direct aid (and the mechanisms necessary to spend it) and programs designed to attract new business. In this context, the ability to offer extremely secure identification of persons, and a solid legal framework for genuinely trustworthy and enforceable digital signatures becomes a vital part of attracting new business. Imagine you are in the position of an international telecommunications company considering which of two nations to invest in. One operates a reasonable ISA program, and the other does not. Which is a more friendly environment for your business, all other factors being equal? Of course it is the one where you can actually meaningfully identify your customers and your staff in a way which makes them accountable and cuts your losses due to problems identifying who you are actually selling services to. Now put this in the context of microfinance. Microcredit lending agencies typically charge around 30% interest, largely because of the costs of administering the loans. Some of that money goes into training staff, training loan recipients and so forth. A lot of it goes into identifying whether people are suitable candidates for a loan. One typical requirement is that loans are only given to small groups of women, who mutually guarantee each other's loans in sequential order. If the first loan defaults, the second is never given. These loans repay rate of over 99% in many areas. Now add a reliable identity backbone. How much easier is it to run a microfinance operation now? What new classes of financial services become possible for the very poor when it is possible for them to identify themselves even if they are too poor to have a home address, a job or even much interaction with their government. An identity solid enough to get credit is a developed-world luxury. Doing business in countries without reliable identity infrastructure, without meaningful Dun and Bradstreet coverage, has enormous risk and transactional overheads. Cutting these factors to an absolute minimum � in fact, to lower levels than are found in the developed world � paves the way for international trade in hereto inconceivable ways. One classical Indian form of identity theft is to declare your relatives dead with a fake death certificate, and then inherit their lands. There are some ten thousand of these people, and they have their own union. Some of them have been "dead" for a

[passage 47](https://guptaoption.com/4.SIAB-ISA.php) in the developed world � paves the way for international trade in hereto inconceivable ways. One classical Indian form of identity theft is to declare your relatives dead with a fake death certificate, and then inherit their lands. There are some ten thousand of these people, and they have their own union. Some of them have been "dead" for a decade or more because it is impossible to prove to the government that they are alive. Dead people cannot sue. An upgrade to the identity systems used by the state would not be a bad idea. Financial Services in the Developing World With a system like SIAB-ISA in place, the risk of identity fraud when somebody applies for a bank account or a credit card in a poor country is likely to be less than the equivalent risk in the developed world without the ISA. What we are talking about is leapfrogging identity infrastructure to pave the way for leapfrogged financial services. One example of a leapfrogged financial services is the E-gold company. E-gold is a privately issued currency, with about $70 million dollars worth of gold reserves. It has been possible to transfer $100,000 from one account to another using a cell phone interface since around 1998. The system has been profitable and self-supporting for many years, and was started by a single individual with an Excel spread sheet. E-gold is, in many ways, an ideal currency for international trade because transactions are measured in transfers of allocations of the gold reserve directly: you are paying by transferring a fractional right to take gold from the reserve, exactly as national currencies were when operated on the gold standard. This means that there is very little political risk to storing one's wealth in e-gold: hyperinflation and other effects of government policy may destroy a nation-state economy, but seldom have significant effects on the gold price, except perhaps to raise it. The final relevant factor is than E-gold supports payments down to around 1/3 of a cent, and transactions costs are extremely low making even $0.05 payments economically viable. Being able to move five cents internationally in an economically viable way is a breakthrough technology for the very poor. E-gold is currently being severely challenged by the Federal Government over a variety of licensing issues and allegations of money laundering. A cursory examination of the cases seems to suggest that these charges stem from an unwillingness to issue the necessary licenses to let the free market provide currency services, rather than from actual malfeasance, and E-gold's record of cooperation with the authorities in tracking down illegal activity appears to be extremely strong. I hope that these issues will be resolved in a way which leaves a viable and successful company standing. Imagine, however, the alternative path in which the US Govt. sponsored (or simply permitted) the development of an independent, stable international currency, coupled to the SIAB-ISA. It cannot be the dollar because of the exposure that users, particularly the very,

[passage 48](https://guptaoption.com/4.SIAB-ISA.php) strong. I hope that these issues will be resolved in a way which leaves a viable and successful company standing. Imagine, however, the alternative path in which the US Govt. sponsored (or simply permitted) the development of an independent, stable international currency, coupled to the SIAB-ISA. It cannot be the dollar because of the exposure that users, particularly the very, very poor, would have to US Govt. policy. This trade backbone - identity plus currency - can create transactions than normal national currencies cannot because they have such poor support for international transactions, and low-value electronic payments. An international currency, with strong ISA backup, opens the slums of the world to trade in a way which is currently unimaginable. Build a leapfrogged trade backbone. The people of the world will do the rest. Common Operations Signing A Contract I physically visit the office of the Professional Witness. They verify my CheapID Identity Card. I present them with the contract I wish to sign in digital form. The Witness affixes my CheapID Identity Card to the contract in digital form. The Witness records my assent to signing the contract perhaps by video recording the event, having me sign a paper copy and recording the signing event on a pressure sensitive tablet, or other mechanisms. This evidence is probably encrypted with the key of the court and archived. I now present this signed contract, including the signed ID, to the counterparty of the contract. In the event of a breach of contract, the counterparty presents the contract to the National Court System which, if the evidence supports it, decrypts my CheapID Identity Card and identifies me. If I contest the validity of the signature, the records showing my signing are decrypted and presented and an adjudication is made. Voting: A Special Case Only minor changes are required to have a secure voting system emerge from this infrastructure. The two necessary changes are that the Professional Witness has to verify that I am authorized to vote before allowing me to do so (or invalid votes must be screened out down the line) and my vote has to be concealed from the Professional Witness. One approach to this might be to have a conventional voting booth and to hand out secret ballots. Alternatively various cryptographic schemes might be employed. Ron Rivest has been doing some extremely interesting work on voting recently, and is certainly the person to read to see some possible solutions to this challenge. Technical Challenges The internal systems of a Professional Witness are not simple. They include monitoring systems, control of their signing keys, repositories for secure data and a variety of other technical infrastructure, none of which ventures deep into unknown territory, but all of which is expensive to deploy as functional commercial systems. Universal Secure Single Sign-On Jurisdiction Hybrid. Although operated by private companies and NGOs for the most part, in some instances this service might be provided by governments, or across international boundaries in much the same way

[passage 49](https://guptaoption.com/4.SIAB-ISA.php) of other technical infrastructure, none of which ventures deep into unknown territory, but all of which is expensive to deploy as functional commercial systems. Universal Secure Single Sign-On Jurisdiction Hybrid. Although operated by private companies and NGOs for the most part, in some instances this service might be provided by governments, or across international boundaries in much the same way email accounts are created. This is typical for internet-based systems, of course. Purpose I believe we have less than 10 years of legal anonymous free speech on the Internet. People confuse the "Wild West" style properties of a new frontier with fundamental aspects of the digital space and, as court houses and law get built on the Internet, much of the current wildness is inevitably going away. However, correctly leveraging PKI and the ISA creates the possibility of preserving the politically critical support of free speech with a reasonable expectation of anonymity, except when criminal acts are being performed. The benefit in this case is the convenience of single sign on across all Internet (and perhaps other) electronic services. How is this to be achieved? Consider the OpenID standard, a distributed (or, more correctly, federated) ID system which hangs off the Domain Name System namespace. An OpenID identity provider gives out URLs, each one of which has a username and a password. The URL is given out to third parties as the "identity" and back-channel communication occurs between the third party and the OpenID provider to enable log in. OpenID has about 10 million operational accounts and is being integrated into projects like Wikipedia. It is likely to succeed widely. If not, something else like it is going to take its place, in all probability. The email address has the same basic properties (of hanging off the DNS namespace) and has been used as a default ID namespace up to this point, with much the same properties � for most web sites, if I can read the email associated with Account X, then I am that person. Hanging off the DNS namespace is an interesting thing, because it basically makes personal identities part of the DNS hierarchy. Part of the freedom people feel on the Internet is that, on the Internet, you are a "citizen" of the DNS Government � DNS creates the political unit of your email account provider or, if you operate your own domain, yourself. In the event of an investigation, queries follow the DNS chain of command: first WHOIS to identify the domain owner, then an enquiry to the domain owner about the conduct or identity of a given user. This usually results in either a real name, or an IP address, which is then mapped back to service providers, then billing records, then an actual hard physical identity. Internet users typically feel rather violated by having their online actions tracked back to their physical location because it is a cross-namespace violation, rather like having a foreign nation state come and enforce its laws on you.

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Continues in https://guptaoption.com/texts/31-5.md (part 5 of 5).
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