The Importance of On-Chain KYC
Since the announcement that the recent Blockpass-Chainlink integration will enable revolutionary on-chain KYC opportunities, we thought it would be a good time to examine the idea of on-chain KYC and why it’s so vital, both for blockchain companies and the wider adoption of the technology, and indeed the users themselves. Whilst Blockpass provided fast, simple and efficient KYC before, the goal has always been to provide on-chain KYC to enable a built-in KYC opportunity for all blockchains that is ready to use right from the start.
Perhaps the most important aspect of facilitating on-chain compliance is that it allows blockchain technology and the multitude of solutions it brings to be adopted by mainstream audiences. The slow uptake of blockchain technology and cryptocurrencies can be attributed mostly to a lack of regulation in the space, meaning that governments and businesses have trouble endorsing and using it. Companies are required to comply with numerous regulations and guidelines in a number of different areas and without the tools to do so they face legal challenges in implementing many crypto and blockchain solutions; similarly, governments need to be sure that new technology and markets can be made safe for the populace and aren’t open to abuse by malicious actors. On-chain KYC brings compliance for a whole host of different regulations to the blockchain, which can be accessed and easily proved by anyone or any company using blockchain solutions; it also has the added benefit of improving perception of those blockchains that have it as people realise that there are baked-in regulatory compliance options. Without on-chain KYC, many will be hesitant to develop or use blockchain solutions, seeing the dangers of an ecosystem without built-in compliance, not least because companies and businesses that fall short of regulatory requirements can face significant fines. The dangers of conducting business in a space where compliance is lacking are manifold and include exposure to risks such as exploitation by con artists, scams or schemes, expose or involvement with terrorist financing, and a variety of other issues perpetrated by malicious actors (or sometimes simply by those unaware of what they’re doing). This is particularly problematic in the financial industry but reaches to almost every application of blockchain technology. As such, without on-chain KYC, blockchain businesses need to implement off-chain KYC solutions (an option Blockpass also offers) or find themselves restricted in their options and markets. All of this hinders the uptake of blockchain technology to provide workable, real-world solutions, which otherwise have a huge potential to revolutionise almost every industry. Linked to the idea of enabling greater adoption, the provision of on-chain KYC would therefore open up a entirely new range of opportunities and potential solutions which could be developed with blockchain technology, ones that aren’t possible without on-chain KYC facilitating regulatory compliance. An increase in opportunities and solutions would make blockchain an even more enticing option, leading to greater adoption and continuing to feed back into further blockchain development. Where before private blockchains were necessary to develop some compliant solutions, the development of on-chain KYC for public blockchains will allow their scale, transparency and audience to be leveraged to greater effect than private blockchains could hope to achieve; indeed, many reasons for having private blockchains over will no longer be a issue once on-chain KYC is the norm. This all comes together to combine the benefits of blockchain, Blockpass and on-chain KYC. Each of these options separately lead to reduced time required, reduced costs, larger potential target markets and all-round improved efficiency, security and user control. All three together cut required resources for compliance to previously unimaginably low levels and bring this potential to the highest number of people in a safe and transparent manner. The technological revolution that blockchain heralds is like the revolution that the internet caused back in the 1990s and early 2000s; with Blockpass and on-chain KYC, it can now be fully realised. The Blockpass platform is fully automated and hosted in the cloud, with no integration or setup fee. Businesses can sign up to the KYC Connect console in a matter of minutes, test out the service, and start conducting identity documents verification, KYC and AML checks. Sign up for FREE at console.blockpass.org.