there is a video link for those who prefer an audio version
Whether we like it or not, the world is moving towards centralised identity.
Over the past 10 years, Governments have been centralising identity for ease of communications across various government services and departments e.g. in Australia that centralised identity system is called MyGov and it provides links to social benefits, taxation office, child support, health records, housing registration, national disability insurance etc…
Now imagine if that central Identification system was replaced with a non-government organisation.
And because it was non-government organisation, it could impartially serve as the middleman or validator between government organisations and private services like private health funds, private legal firms, banks etc..
Now imagine an even bigger scale with me. Imagine you have a ID company that can bridge ID verification internationally, across borders, and the e.g. they give in their white paper is someone who has a health insurance in China, could potentially move to Singapore and get a health insurance scheme there easily, because their ID and history is easily verifiable. How crazy is that? This is a world changing vision that would involve billions of people and billions of transactions. That is what “TheKey” project is. TheKey is a second generation identification system designed to be used on a global scale, in partnership with governments, private organisations and individuals.
You might think the scale of this project is too big, you’re never going to get governements to let you have access to their database of personal information of their citizens.
Hmmm…Let me ask you, which country comes to mind when I say one of the biggest countries in the world that has been difficult or resistant towards cryptocurrency? Two names would pop to mind—China and USA. Both these countries are super powers who have taken the harshest stance against crypto projects, banning ICO, instilling a lot of fear and harsh regulations. These two governments are the least likely to partner with a project like TheKey which requires them to relinquish data of personal information right?
TheKey already has a partnership with China. Their 1st generation of IDV (identification verification) system is already deployed and working in China on a national level social insurance scheme that has seen their technology used in 41 cities and 130 million people. Their database of personal information is already 210million people from 66 countries. In a recent interview with their CEO, she revealed their plan was to cover the entire China in 5 years, with a target of 1.4 billion people. She also said that the reason China is using them, is not because they had any previous relationship with China, but simply because China needed to use their service and technology. As a company, they already have 23 copyright and 14 patents accepted by the SIPO and were voted “The Most Valuable Project of the Year 2017” by the All-China Women’s Federation. They have six national labs set up together with government agencies, banks, insurance companies and a university, and they are also currently in talks with other governments.
TheKey is not a blockchain project trying to build from scratch and take-off, it is one of the world’s biggest IDV companies that has already taken off with millions of users and is simply integrating blockchain into its technology now. By use-case, this project should be one of the biggest in the crypto market. The only reason this is not at the top of the cryptomarket is because people are not aware of it.
A lot of Chinese Crypto projects, are not capturing market attention partly due to their unattractive names which are literal translations from their Chinese names. E.g. TheKey, High Performance Blockchain, Internet Node Token, these are Chinese projects with names that are more descriptions than a sexy, attractive brand. It’s because Chinese names tend to be quite deep and meaningful but when you translate them, they sound abit silly and chunky. But If it was the other way round and you were translated the name Ripple into Mandarin, and told it to a China layman who doesn’t know Crypto, he would laugh and say it sounds silly. But some day, these Chinese companies with great technology and working products, will have a rebrand, like Antshares did to Neo, and then the Western world will take notice of them and they will fly. So projects like TheKey which have a great working product already, I think are super undervalued and just based on their use case, they should easily be in the top5.
Now diving abit deeper into the project. Blockchain is all about decentralisation. Its about taking out the profits of the middleman and redistributing it to the masses.
Unfortunately ID verification is going to be increasing centralised for ease of communications across services. This is going to happen with or without blockchain.
What I like about TheKey, is that they bring a decentralisation to this centralised system. Let me explain what I mean.
The decentralisation happens at 2 levels, firstly the ecosystem level and secondly the technical level.
Usually our data gets collected by the government, whether we like it or not, and then we have to pay for services to use our information e.g. tax, insurance etc..
TheKey creates an ecosystem where there are three parties in each transaction, the indivual user, the service, and the validator which is TheKey. The advantage of having TheKey is that they provide a larger source of data than even the government’s own data set, so the governments and service providers will need to use them. But TheKey will pay individual users for authorizing them to use their data. Which means individuals will actually have control of their data and get paid for allowing services to use their data. That’s brilliant, that’s decentralisation where the profits are not just centralised on one person, but distributed amongst all parties.
TheKey data base will be a dynamic database, meaning it will keep growing and changing. When a service provider like a bank uses TheKey to access individual data, they have to pay a small fee to TheKey as a validator of which the individual also gets a small cut. The service provider will also retain a copy of the user data for its own record. But this data is static. Meaning it is not automatically updated. To get an updated information the next time the user visits the bank, they will have to use TheKey again and pay the fee again. The fee is actually very cheap and affordable, and the service provider will earn money from providing whatever service it is supposed to provide e.g. banking.
Every interaction between all parties are done via smart contracts which runs on the native TKY tokens. So this means alot of token use, lots of demand, which is always good for token price.
So all in all I think this is a very fair and decentralised payment system.
The next level of decentralisation is in the tech. The reason why TheKey is integrating blockchain into their tech is because as their database of personal information grows, they have to ensure that the data is kept securely, immutable and irreversible.
The reason its called 2-generation IDV. Is because of it uses a new technology called BDMI. BDMI is simply B for blockchain + DMI which is the core of engine of their 1st generation ID verification system.
DMI (Dynamic Multi-dimension Identification) technology has 5 parts or 5 modules.
The first is the Data collection Module which basically extracts Data from different resources. It also verifies the data and avoids replication of data collection.
The second module is the Data Standardisation Module which does 2 things:
a. It standardises the communication. Think of it like some systems might measure weight using kilograms, others might use pounds. So this module will standardise the communication protocol between services. Obviously with ID we’re not talking measurements of weight, that’s just an illustration.
b. The second thing it does is Term Standardisation. So just as an example again, some systems might call General practictioners, family doctors, others might call them GPs, others primary care workers, others health clinics etc.. so as a database TheKey needs to standardise the terminology used and it does this through a combination of (artificial intelligence) AI, (Natural language processiong) NLP as well as ontology.
The third module is called the Primary User Index Module, and this module is basically categorising all the information for an individual into indexes, so that it can easily be found. So it’s basically the filing cabinet of the system.
The fourth module is called Data Warehouse Solution Module, and this ensures that the actual data can be retrieved. So think of it as the secretary who runs to the filing cabinet to retrieve the file you want.
And finally the IDV engine is where the information is verified or attested before being deployed.
The blockchain is used to help because it ensures that the data will never be lost or tampered with. Because imagine storing it on a cloud and one day if the cloud broke down or was destroyed, suddenly the entire network was non-functioning and all these government services couldn’t function. That would be a disaster. So blockchain as a decentralised storage is the safest way to store information and ensure that it is not tampered with.
Now, due to the volume of data expected, not all the data can be stored on the blockchain, or if they did, it would really slow down the blockchain. This is a problem they are still working on, but the option proposed at the moment is to save most of the data on a separate TheKey database, and only the hash value, so a summary version will be stored on the blockchain.
Now after you combine the two technologies, blockchain + DMI, you end up with a nice 3 layer architecture.
The protocol layer is the blockchain layer which manages the data and provides authority and security
The interface layer is where the data on the blockchain can be connected to apps. So this is where smart contracts and the DMI features e.g. data standardisation happens
Finally the application layer is where SDK (software development kits) and interface mixes. Basically meaning, this is the layer where all the ID collected and process can now be actually applied to various uses. One of the uses is a biometric profile. So this is more than just a digital ID like a passport number, this is an ID that recognises your fingerprint, your face etc… So if you open a doorknob that has fingerprint recognition or if you are a wanted criminal at the airport etc… you can be recognised through your biometric profile. If you got into an accident and lost your memory and wallet etc… just based on your face, the hospital would be able to ID you and treat you accordingly.
Basically what I am trying to say is they are not just the world’s best storage for ID data, they are also possibly the best at presenting and using the ID data.
Team:
This is their team. It’s an impressive team.
Their anchor person is their CEO, Miss Catherine Li. She is very experienced in big data technology, medical informatics with degrees in computer science as well as previously being a physician in a hospital. She has previously been in charge of large cooperation projects as well as having experience in Canadian International Research Council. She was the founder of DMI technology and the first in the world to provide IDV on internet which has been accepted by government, banks etc… she won the Most Outstanding Woman Entrepreneur in China award in 2017, and was also the champion and bronze prize winner of the China Social Security Data Application Championship in 2017, hosted by the Ministry of Human Resource and Social Security of China.
You can go through the other resumes in your own time, il summarise it as a very technically heavy and competent team. Sometimes in these technically heavy teams, we worry about marketing. But seeing they are getting government partnerships and spreading to 66 cities and over 200million people in 3 years I don’t think we need to worry about their marketing.
They have 2 advisors:
Roger lim—CEO of webvision, one of the largest hosting services providers in Asia, as well as partner of Innosight Ventures.
Qingyue Chen—Founder of Zhen IP, Venture investor and expert in blockchain financing system designer.
These are their strategic partners, NEO, Onchain, China unicom, Tsinghua Unigroup etc.. so a lot of big names. Ant Financial here is also part of Alibaba group which Catherine their CEO has confirmed they are partners with as well as IBM too!
Also, not listed here is Ontology, Ontology and TheKey are working very closely together in the same ecosystem, where Ontology focuses on the crosschain aspect and TheKey focuses on the IDV aspect.
Also the founder of NEO, Da Hongfei is also an Angel investor in this project. So as you can see, a lot of big names believe in this project.
Roadmap:
This is their roadmap. It only goes until end of this year, but its mainly their tech and it ends with their mainnet being launched in Dec 2018. So currently they are on NEO platform, but they are planning to launch their own blockchain soon. This is actually very important and I explain why in just a minute. Their actually roadmap for the project, not just the tech, is a lot longer than this, their CEO has already mentioned in interviews the bigger plan to reach the whole China in 5 years and they are also in discussions with other governments. So the ecosystem side of the roadmap will be a long HODL, prob still growing in 10 years time.
The next major milestone to lookout for is in June 2018, when the BDMI and their testnet will be ready. This is going to be huge, cos BDMI is their main technology. So its looking like May is a good time to get in if an investor was thinking of doing so.
Points of consideration:
I just have one point of consideration for this project, and that is scaling. They are currently running 130 million profiles for insurance, but they are planning to expand to over 10x that number of people just in China alone and include services that will do much more frequent transactions that insurance which we would imagine is once-in-awhile, definitely not an every day transaction. So if they start to include daily services like banking and health, the workload on the whole system is going to increase exponentially. We are talking about millions of transactions per second. This is why I said, it’s important they leave NEO and start their own blockchain. Neo currently is running at 1000trx/ sec and it plans to scale up to 10,000 transactions per second. Even if NEO had more scaling options with Trinity or HPB hardware, it would be hard to see NEO scale up to a million Trx/ sec which is what these guys need. Also keep in mind that scaling is more than just transaction speed, it is also bandwidth and data management including storage and they have also identified storage is a potential problem they need to work on. They have highlighted some potential solutions, so they are definitely going in with their eyes open, but I think, moving forward, with more news of their testnet and mainnet to come, it will be worth paying attention to their scaling solutions.
Price prediction:
When they opened on the markets in mid Jan, they opened at $0.031 and rose to $0.039. It wasn’t a big rise because there was abit of unhappiness about their ICO. Basically their ICO was very popular and sold out in an hour, but because the ICO wasn’t don’t with smart contracts but manually, there were a lot of hiccups including the website crashing and many potential investors on their whitelist missing out on the opportunity to invest. Nonetheless, the price did rise about 4x from ICO price. Currently they are sitting at $0.019 which is about 50% of their high. So it’s a very attractive price to get in. Their current marketcap is $86.6 million.
The closest comparison on the market is probably Ontology who currently has a marketcap of $920 million. If THEKEY ever reaches there which it should, that would be over 10x gains. The truth is, there is really nothing equivalent to compare TheKey too. You can’t even compare it to Ontology, because where Ontology is still building itself up. TheKey is already running with China government partnerships, over a 100million users, have 15 patents and won a national award. So TheKey is actually abit ahead as project. It’s just very very undervalued.
I think we are at a very unique point in history where we are seeing 2 things in the blockchain space we have never seen before.
Big investors like governments and big companies showing interest. 2 years ago, no way would you see governments mint their own crypto or support blockchain projects, nor would you see starbucks or Samsung or youtube express interest in blockchain projects. It was still too early in its developmental stages and risky.
The second thing we are seeing are some choice projects like Nuclear Vision and The Key which are actually companies that have been in the works for 3-4 years with working products now coming into the blockchain space.
80% of new ICOs/ blockchain projects failed in 2017. I think the big question to ask is will the project I support last. Blockchain is in such early days, if the coin we support lasts, it will almost certainly rise. And this is where I don’t understand. So many people are investing in projects that have no working product yet, and those coins have multi billion dollar marketcaps, but they are actually much riskier because its all concept, you don’t know if they can deliver a working product. Personally I think that projects that have either big investors or already a working product and been in the market for a while are a much safer investment. Still high risk because crypto is high risk investment, but these companies certainly make me feel more secure that they are going to be around in 3 years time. So it just tells me how irrational the whole crypto market is. If you go to a mature market like the stock market, no way this way happen, it’s the companies that have actual value that are high in marketcap.
Over the next few years, I do expect the crypto market to mature and we will start to see the projects with real tech that have high marketcap rise and the younger conceptual projects only really take off after their product comes out. That’s really the time that projects such as TheKey will shine.
So I think TheKey is a long term HODL, and its really a bargain now with such a low marketcap, this is a coin that I can see potentially 50x even 100x. I don’t know any other crypto project currently that has the number of users they have. I mean even if you 100x this coin, they would only be worth $8 billion. Recently EOS without a testnet or working product, without a single Dapp yet, reached $17 billion. Nothing against EOS, I like the project, and I know they are both very different projects and can’t really be compared side to side. But if a promising project that doesn’t have a use case at the moment, can be worth $17billion just because of its potential, why can’t a project like TheKey with all its achievements be worth more? If TheKey ever reached $17 billion, that’s over 200x returns. Will it ever reach there? With the scope of its project and early market advantage. I think so. Maybe Im wrong.
This is all just my personal opinions, Im not a professional or financial advisor, I’m definitely not telling you to buy this coin. I’m just sharing that personally I’m bullish on this project. Please always do your own research and make your own decisions.
Anyways, that’s it guys, those are my thoughts on TheKey, I hope you found it helpful. If you liked it, do give us an upvote to support this blog and so you don’t miss out on any of our future content.
Have a great day wherever you are! Take care and Goodbye for now!
Nice, detailed write up! This is a project that has been on the edge of my radar for a while, but your article helped me decide to make the leap on this one. Bonus points for being associated with NEO and ONT (two of my other holdings) and for being at such a low price point. Definitely some potential here for value gain on the tokens, and for creating a useful service ecosystem that could actually change the way business is done. Looking forward to seeing where this project goes!
Thanks!
Yea I think the NEO economy will be the biggest economy in blockchain in a couple of years. :) Check out Elastos too. Part of the whole gang too.