Many people don’t realize there is enormous demand for legal forms of ID. This is especially true for people living in developing areas where access to identification is difficult or near impossible. Over 1 billion worldwide people do not have verifiable ID restricting their ability to apply to schools or college, open a bank account, apply for credit or loans, and to get healthcare or health insurance.

1. BLOCKCHAIN
REPUTATION
MANAGEMENT

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5. Many people don’t realize there is
enormous demand for legal forms of
ID. This is especially true for people
living in developing areas where
access to identification is difficult or
near impossible.
By year 2030 the World Bank Group and its
partners aim to provide everyone on Earth
with a legal ID as part of its ID4D
(Identification for Development) initiative

6. This initiative is fueling the creation and
implementation of digital ID systems
primarily in areas where access to
traditional ID is low, and blockchain
technology is being examined as a network
architecture for these systems.

7. HOW SHOULD REPUTATIONS BE
RECORDED AND MANAGED?
To grasp the various possibilities of
creating a blockchain reputation
management system it can be helpful to
think of three questions that are to be
addressed in the design process:

8. Where in the network will the data to create a
blockchain reputation management system be
stored?
How frequently are the reputation calculations
occuring?
Which machines or nodes in the network are
computing the reputation calculations?
1.
3.
2.

9. The numerous answers to these
questions constitute what’s called
blockchain reputation architecture.

10. WHERE TO STORE THE DATA?
One possible storage location is in the blockchain itself.
An advantages of this method is that it reduces
computation from a users’ software or machine and
instead the blockchain contains this data.
Another place that blockchain reputation management
data can potentially be stored is in a separate database,
this is called “persistent reputation off-chain”.
A third option is called “transient reputation”. This method
computes reputation calculations without separate
databases to integrate and with no data stored on the
original blockchain.

11. WHICH NODES CALCULATE
REPUTATION?
Travelchain, a decentralized data exchange for the travel
industry, plans to use the agencies off chain method to
process evaluations of travel services.
Another option is to have nodes running reputation
software within the network or blockchain (agencies
on-chain). This would require at least one node, but not all
nodes, to execute the same reputation code and would
require these nodes to be financially motivated to do so.
The last option is one where block-creating code contains
reputation calculations that all block-verifying nodes would
be required to compute (reputation mining on-chain). This
method touts the highest security and simplicity.

12. HOW FREQUENTLY IS
REPUTATION CALCULATED?
Reputation calculations are composed of complex
algorithmic code and it takes time, energy, and processing
power for computers to carry out this code. Any
redundancy or inefficiency that can be removed during the
design process improves blockchain system function.
One option is to recalculate someone’s reputation
whenever it’s been requested, this is called “complete
recalculation”.
A different solution would be to calculate reputation only
once for a set period of time, called “periodic
recalculation”.

13. Here at BitBay we store our reputation
data separate from our main blockchain,
the off-chain method of storage. This
design choice strengthens the network
as it prevents problems associated with
blockchain bloat like data-heavy
blockchain sizes and low transaction
speeds.

14. Storing reputation data independent of our
main blockchain benefits the network as a
whole because the reputation data doesn’t
slow down block verification thus
preserving the speed of BitBay
transactions.

15. A person’s reputation history is stored
on their machine locally and is visible
at the time they offer or enter a
contract
A reputation in BitBay’s system includes
the number of successful contracts, the
total number of contracts, and any
reviews users have left.

16. The beauty of our reputation system is that
it’s only part of how we discourage
cheating. Our Double Deposit Escrow
system (DDE) allows contract participants
to remove any profitability from cheating by
requiring both parties to submit a collateral
deposit which can be set to any amount.

17. Our Market Client’s steganography feature
opens the door to many different
possibilities. You can quickly and
discreetly send private information to
friends or colleagues, and this feature also
has the ability to extract and decrypt any
files that are sent to you.

18. DECENTRALIZED NETWORKS
TAKE DIFFERENT FORMS. SO
WILL REPUTATION
MANAGEMENT SYSTEMS.
Storing personal information within similar
decentralized network structures has benefits as
well. In developing areas where the cost of
getting credit is high, a person could be
financially liberated if their digital reputation was
used as substitute for a credit score or paystub.

19. Since decentralized networks are
increasingly recognized as a
powerful tool we are likely to witness
the development of both anonymous
reputation systems and centralized
digital ID systems containing
personal data.

20. The pro-decentralization community
might be averse to any comparison
with nations or other organizations,
but each day cryptocurrencies and
developing digital ID systems are
testing similar underlying network
technologies.

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