How do the PoU and the Human Coin work?

Proof of Identity

1. What is the Human Coin and the Proof of Uniqueness network

The Human Coin is a new cryptocurrency based on a new consensus protocol: the Proof of Uniqueness.

It is a new concept of doing blockchain based on individuals that introduce a simple concept: one individual = one node of the blockchain.

Because every individual participates for free and is counted and rewarded equally, the Proof of Uniqueness network creates a universal basic Income for everybody: the Human Coin.

In order to achieve these goals, the system utilises a biometric identification process that ensures everyone can enrol only once, while securely detecting any spoof identity or digital avatar.

Another important goal in the Proof of Uniqueness is the preservation of the privacy of the participants. This goal is achieved because the biometric technology does not store the biometric data, but only converts them into a public key, a binary string that cannot be reverted back and can only use to rule out double enrolments.

Encryption keys in the PoU are obviously stored in a decentralised setup ensuring that there is no centralised point able to access them.

In conclusion, the Proof of Uniqueness is a blockchain based on individuals, assigning to each individual one participation unit, and creating a network that generates a universal basic income for all: the Human Coin.

2. The PoU replaces PoW and PoS with a decentralized and non-quantitative network

Most of the current blockchains are based on one of the two consensus protocols, the Proof of Work and the Proof of Stake. Despite the ongoing debate over the two, it is not difficult to view them both as conceptually very similar: both are Proof of Investment i.e. requiring participants to invest in some activity or resource to validate their credentials and acquire units of participation.

The investment aspect is very critical in the PoW and PoS because inevitably makes the network of validators the playground of investing corporations, and so the blockchain fails to achieve decentralisation and adoption.

Another limit of proof of investment networks is their quantitative design, this means that the amount of proof required for the validation of the block is proportional to the market cap of the blockchain network. This is intrinsic in the Proof of Stake, and it is also very evident in PoW blockchains such as Bitcoin, that show a strong correlation between the hash-rate of the network and the total capitalisation of the blockchain. As a result, there are no synergies in merging two networks under any Proof of Investment protocol, because the amount of proof required will be always the sum of the single ones.

The concept of PoU on the other hand is non-quantitative. As soon as the PoID network is sufficiently populated, the infiltration of hostile groups becomes impossible and therefore the validation of the blocks is incorruptible.
Furthermore, as it is also impossible for attackers to use forged identities, the network is permanently secure since the very early stages. The incorruptibility of the network allows the PoU to unlimitedly validate blocks within any blockchain, regardless of their market cap.

It’s a far more efficient system than PoS and PoW networks, that instead merely discourage Sybil attacks making them anti-economical for the attacker.

In order to illustrate this difference further, let us consider the following analogy. PoW and PoS networks can be compared to a car driving to an election booth – the vehicle needs fuel to reach the destination, and the amount of fuel consumed is directly proportional to the distance traveled. For every election the driver wants to vote for, they must drive to a different election booth and thus use more fuel.

PoID on the other hand works differently – this network can be compared to the same election day, except that voters do not need to spend on fuel because here all elections are in the same booth, and in order to be admitted they simply need to show up their biometric identity, and then they can vote for any of the elections without having to travel any further or bringing more proof of their rights/status.
Applying this concept to blockchain networks means that the network is freed from the dependence on energy waste and no longer requires staking for participation.
Ultimately, this makes PoU significantly more distributed, secure, and sustainable than the existing PoW and PoS consensus protocols.

In addition to improvements regarding efficiency, the PoU network also makes a huge difference in terms of blockchain censorship resilience. Blockchains and their associated cryptocurrencies are sold as fully decentralized and censorship resilient, but the dependence on hash and stake ownership with PoW and PoS protocols prevent this concept from being realized, because governments can easily limit the electrical supply needed in the PoW and can easily trace down major stake holders in the PoS.

PoID on the other hand uses signatures of single individuals to validate blocks, while their biometric data are heavily encrypted, therefore there is no way to trace down participants or to restrict their capacity to act in the network.

The high level of decentralization and adoption, the full privacy of the participants, the independence from energy, make the PoID network extremely censorship resilient.

In conclusion, the production of hash power in the Pow and the ownership of stakes in the PoS are the criteria used to validate participation to the network and assign rewards; in the PoU instead, participation is validated with the biometric identification, and rewards are the same for all participants.

The PoU ultimate aim is to provide a consensus protocol to all new and existing blockchains. This would allow any blockchain to develop its features freely and efficiently, without being concerned about the non-sustainability of current consensus protocols.

Because the PoU distributes a universal basic income to all individuals of the planet and because it solves the problems of the validation of all blockchains, it is not surprising that the Human Coin (which is created as the reward of the PoU network) aims to achieve in the long run a total market cap higher than any other current currency.

3. The differences between Human Coin (HUC) and Worldcoin (WC).

In order to illustrate the innovations that the PoU consensus protocol and the Human Coin (HUC) provide, we will now break down the key differences between this solution and the alternative  Worldcoin (WC).

  • What are the Human Coin (HUC) and the Worldcoin (WC), and what are they used for?

Worldcoin (WC) is a cryptocurrency application that is based on the existing Ethereum network. WC states that its primary use case is for Universal Basic Income.
The identification method in the WC is based on a biometric scanner – the Orb; this design requires trust in the Orb apparatus against possible tampering or manipulation of data.

Conversely, the Human Coin (HUC) is a new and independent blockchain network powered by PoU in which no entity has to be trusted to ensure the fairness and security of the system. It facilitates the same use case of Universal Basic Income as the WC, but also it introduces a new consensus protocol that can be applied to all blockchain networks. In simple words, whilst the WC is dependent on the existing Ethereum network, the PoU is designed to have all other networks depending on its consensus protocol.

  • How effective is each network’s security?

WC is powered by the ETH network, and this comes with the limitation that its security is ultimately tied down to the security of the ETH network (which is now the PoW consensus, and in the future on the PoS consensus).

Additionally and most notably the WC organization must be trusted to not create identity forgeries and thus compromise the fairness of the network. Ultimately, this trust lies within the assumption that The Orb (the biometric scanner used by WC) is tamper-proof. This is simply a weak assumption when high banking security has to be attained.

Furthermore, the biometric data within WC is encrypted through a centralized setup, and this makes it liable to governmental censorship.

The HUC on the other hand uses the native PoU network to ensure that no Sybil attacks are possible. The biometric data are heavily encrypted in a decentralized setup removing the possibility of accessing data and censorship.

Whilst the WC has no procedure in place to verify the presence of identity forgeries in the system, in the PoU an AI engine is leveraged to supervise and govern the network in a self-sufficient manner and constantly ensure the ecosystem against the presence of identity forgeries. Ultimately, this is performed by organizing parties and searching for cheaters at any level.

  • Scalability

The scalability of WC is directly correlated and thus limited to the production and distribution of its biometrics scanner the Orb.

The HUC on the other hand enjoys high scalability due to the onboarding of locked wallets being performed online, being unlocked only by the identification party.

  • Participating roles

The participating roles of WC are held solely within the WC organization and the operators of The Orb.
The HUC on the other hand offers a wider range of roles and participation opportunities, from the PoU organisation, individual verifiers, node owners, and identification entrepreneurs.

  • Convenience and complexity of identification

Whilst WC’s identification system is performed by The Orb scanner in public places, identification within HUC’s network is performed with an “everyone to all” ethos, using a mobile application at randomly assigned identification parties.

Furthermore, the biometric identification of WC takes a few minutes, whereas the complexity of the HIC means identification is a longer process. However, in the HIC, users are issued a minting wallet in locked mode already at the online application, which is obviously offered at user’s convenience of time and place.

In the PoU, users may also be required to attend two to four identification parties throughout their life in order to further verify their identity.

  • Financial Backup

The financial backup of the WC network relies on venture capital financing, whereas the HUC is fundraising proposes a system open to everyone, and rewarding those entitiy that develop the code and acquire users.

4. How identification is performed for the PoID

 The process is divided into three stages:

The online submission of data allows fast scalability and a fast ramp-up in the number of minting wallets.

Once there are enough applications within a region, identification parties kick-off.

The AI supervises the system and schedules additional identification parties to discover any fraudulent activity. In general, an individual will have to attend two to three parties every ten years in order to continue to receive a monthly salary.

5. Biometric data and privacy of the minters

We use facial biometric data and vocal verification. These are carried out online and at identification parties using a mobile phone.

Data is then partially publicly stored in the blockchain. The amount of public data is not enough to securely identify an individual, but it is enough to avoid a good number of collisions with new participants to the network.

Each minter holds an encrypted copy of their data, and a copy is also spread out to a group of randomly chosen minters. When a collision occurs, the group of minters holding the encryption will validate the collision in a private room and report the confirmation to the blockchain.

6. The Token-economics of the Human Income Coin.

Because we are creating a universal basic income distributed to at least one billion individuals, it is realistic and conservative to estimate the total market capitalization at a minimum of the value of the circulating USD, approximately 40 trillion USD.

The minting process will generate 200 million coins over a period of ten to twelve years.

With a rough calculation:

40bn/130months/1bn individual = 300 USD per month per individual

Once transaction fees of the PoID network are added, including those coming from the validation of other blockchains, the universal income will likely be of a value of 500-600 USD per month per individual.

If the Human Income Coin achieves a market capitalization equalling the USD + the Euro, the universal income will be in the region of 1000 USD per month.

The monthly amount of Human Income Coins will be initially high to provide an attractive value to early minters and it will progressively diminish as the value of the coin ramps up.

Once the minting process is completed, minters will only receive a reward based on transaction fees.

7. The Role of the PoID Global Organisation (PGO)

The creation of the PoID requires significant investment and robust development of the associated technologies.

The protocol also requires some form of facilitation while identification points are secured.

For these reasons, a global organization is introduced.

It is important to understand that the role of the PGO is that of a facilitator who does not have any power/authority/discretion in the minting process nor in the process overall.

Unlike the Worldcoin which is based on the trust that the Worldcoin Organisation would not create identities for itself, the PGO does not require trust as it does not possess the capacity to cheat the system or support collusion.

This is because the identification process takes place at parties and level 1 parties are subsequently verified by level 2 parties in a pyramid system that groups individuals from different regions.

 Unlike the Worldcoin we proudly believe that the PoID is a trust-less network.

8. Bye Bye Proof of Work and Proof of Stake

As blockchain technology aims to replace our banking and financial systems, its foundation should not be a system in which unknown entities in remote places of the planet plug into electrical sockets to compute useless algorithms with the mere purpose of wasting gigantic amounts of energy on a global scale.

This absurdity not only is clearly unsustainable but also leaves out individual participation and exposes financial assets to all kinds of potential disasters. Ultimately, PoW is run by a handful of corporations (mining pools) clearly liable to the censorship of those governments in which they operate.

 As a shelter was needed to make up for PoW’s disgraceful design, Proof of Stake became handy for an illusionary shortcut.

PoS can be easily labeled as un-democratic, not “one counts one.”
What is the point of replacing traditional banking systems based on centralized servers, with much more inefficient decentralized systems based on an oligarchy of unknown corporations?

How unrealistic is the idea that such a system could be censorship resilient? Isn’t it obvious that a network populated mainly by big holders can easily become a target for adverse agents? As the panic spreads the big fish exit the pond first, leaving the largest financial losses to the small fish left behind.

PoS can only grow on the hype, on a false narrative passed on by vested people. It simply lacks an intrinsic value proposition for individuals. It is nothing more than an astute way for corporations to unify the market.

We are delighted to think that the real future of blockchain is emerging with the Proof of Identity consensus protocol, a network in which validating voting power and associated rewards are equally distributed to every single individual. PoID is an amazing project with a strong appeal to individuals and strong traction to adoption.