Blockchain against AI fakes: Protecting crypto distributions

With the technologies underlying blockchain, a rapidly developing AI is making it more difficult to determine who is a real person and who is a machine. The internet is rife with deepfakes, bots, and AI behavior indistinguishable from that of humans, spurring various projects to develop effective solutions. Various estimates put the number of bots on platforms like X at 5% to 15% of the total accounts. Meanwhile, Facebook reports banning hundreds of millions of fake users every quarter.

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Challenges in Bot Detection

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AI Bots seem to be everywhere, from social media to online gaming. For example, in crypto gaming, it is quite common to use bots to "grind" through tasks in games or even fake user activity to qualify for crypto airdrops. The problem is that while some bots are fairly obvious in their repetitive actions, AI technology is advancing rapidly, making it harder to distinguish fake from real accounts.

To support this, one study conducted at the University of Waterloo compared AI-generated faces with real faces and reported surprisingly low results: participants could only correctly identify them 61% of the time—a far cry from what researchers expected.

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Blockchain Solutions for Proof of Humanity

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Several blockchain-based projects aim to address the problem of proving humanity.

• Holonym: Shady El Damaty, co-founder of Holonym, explained that his platform uses "human keys," a private key based on biometric or personal data, to identify real humans. For example, Holonym can create a wallet from a face scan.
• Civic: Civic uses a "simple video feed" for verification to add a layer of singularity to confirm identity. Civic also includes document verification, which introduces friction and enhances security against bots.
• Proof of Humanity and Privy: These projects mix social and video verification or manage user authentication at scale with strong anti-Sybil systems.
• Worldcoin: Iris-scanning technology creates unique identifiers to provide proof of personhood. Despite privacy concerns, this technology raises important questions regarding the use of biometrics.

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Privacy Concerns

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The use of biometrics for human verification raises concerns, particularly among privacy-conscious users wary of tech companies using such data. Potential issues include surveillance, data retention, and consent.

• Holonym: To address these concerns, Holonym keeps about 80%-90% of the data on the user’s device, only retaining essential information, like email, for account recovery. Holonym focuses on client-side data storage and seeks user consent before sharing sensitive data.

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Use Cases of Digital ID

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Digital ID systems have broad applications in Web3 and beyond:

• Sybil Attacks in Airdrops: In May, LayerZero conducted a large anti-Sybil campaign to sift through bots seeking multiple airdrops. This effort led to better token performance than projects that inadvertently distributed tokens to bots. Civic’s uniqueness tests could simplify this process by verifying user identities from the outset.
• Political Campaign Contributions: Holonym’s Know Your Anon system allowed anonymous donations to Andrew Yang's 2020 campaign by verifying U.S. residency without revealing identities, using government IDs, emails, or social security numbers through zero-knowledge technology.

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Digital ID into Civic Infrastructure

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Digital ID verification is paving the way for applications in civic infrastructure:

• Voting and Civic Engagement: El Damaty envisions Holonym’s digital ID infrastructure being applied to civic functions, such as secure online voting, enhancing public participation.
• Refugee Assistance: Holonym’s current project focuses on creating identity solutions to safely provide aid and support to refugees in conflict zones.

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Future of Blockchain-Based Digital ID

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As AI technology further blurs the line between humans and machines online, blockchain-backed digital ID systems are becoming essential for establishing trust and security. While privacy concerns remain, these technologies are poised to revolutionize identity verification across both virtual and civic spheres.

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