To operate the IAME Identification Network, a functional token will be issued, known as the IAM Token, which would operate as a validation token to initiate confirmation requests for validation packets on the IAME Identification Network. Parties would spend the token through the IAME Identification Network client and after deduction of equivalent blockchain hashing costs, the balance of IAM token would be paid out as reward to third-party validators who operate the validation processes on a for-profit basis.
This would attribute not a store of value to the token but a market value based on natural demand and supply for identification processes. The value of the IAM Token would be, in essence, determined by 2 factors:
1. The cost of validation, which would be proportional to the financial cost of hashing the requested amount of data on the designated blockchain, setting a price floor for the token.
2. Market demand, which would be proportional to the demand for blockchain identification based on the IAME Identification Network.
Because of the the ephemeral aspect of data validation in the field of identification, market demand would remain recurring and would only increase with an increased adoption of the IAME Identification Network.
Reward and Ranking Mechanism
As a continuation to the Trial Algorithm, there is a need for a reward and a ranking mechanism
in such a way that good third-party validators are rewarded and bad third-party validators
penalized.
For this mechanism, two reward systems are proposed: a token reward system
and a node ranking system.
-The token reward system allocates a pool of IAM Tokens to the third-party
validators for completing the fragmented validation process akin to mining.
-The ranking system attributes an internal ranking system to third-party validators
within the IAME Identification Network, such that higher ranked validators receive
a higher proportion of the tokens, which is indicative of their ranks.
In principle, the determination of the allocation of any IAM token pool would be a function of
the outcome of the Tribunal, while the ranking system would be a function of the outcomes
of the Appeal and the Control Tribunal. Due to the application of a double blind procedure, the
third-party validators would not be at any time aware of whether they are in a Tribunal, an
Appeal, or a Control Tribunal - further reducing any risk of gaming the system. Third-party
validation would be open to the public and, in the long-run, poorly ranked third-party validators
would be banned from acting as nodes.
An Identification System for
Blockchain P2P Transaction
-With a functional IAME Identification Network, the primary application would be the
facilitation of blockchain P2P transaction, such as online merchant transactions. Taking into
consideration a simple online purchase where a customer purchases a physical good from an
online merchant with Cryptocurrencies, the amount of personal data that is communicated
from the customer to the merchant can be segregated into two categories: essential to the
transaction and non-essential to the transaction.
1.Essential information would be a name and an address without which the
transaction and the delivery of the good cannot occur
2.Non-essential information would include, for example, an identity document to
prove the name of the customer, a utility bill to prove that the address belongs
to the customer, and the specific date of birth of the customer.
The logic behind the conveyance of non-essential information is based out of regulatory
need. But with an alternative identification system, the same goal can be achieved without
disseminating the non-essential information, decreasing security risks for the customer and
decreasing the burden of security breaches for the merchant. In the P2P scenario, the merchant would consult the public repository of the IAME Identification
network to verify whether non-essential information associated with the customer’s blockchain
address has been undertaken on the identification network. This could be either out of a
regulatory basis or for her/his own comfort level.
A Platform for Financial
Institutions
As the regulatory classification of Cryptocurrencies converges towards currencies, securities,
and/or software, there will be a need for some form of anti-money laundering procedures to be
applied, which can trace the source of the Cryptocurrencies - up to a level that can ascertain
that they are not from the proceeds of criminal activities. The use of public ledgers, though
being able to create an electronic trail up to the mining/creation of Cryptocurrencies, does not
identify the transitory wallets through which the Cryptocurrencies have been. As an extension of the IAME Network and its public repository, the identification system
would be used in the construction of identified topological spaces that would provide financial
institutions with the tools to identify, to the nth degree, the origin of the Cryptocurrencies
they are handling.
The creation of a partially meshed system would provide financial institutions handling
Cryptocurrencies a level of comfort, to the nth level, on the source of Cryptocurrencies, which
would still constitute a more efficient anti-money laundering tool than current procedures for
Cryptocurrencies.
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