PayPal has announced that it is investing in a blockchain-based start-up which is aiming to rethink the way we manage our identity online.
The payment processing company believes that Cambridge Blockchain’s services could prove beneficial to its millions of users – enabling them to prove who they are without compromising their personal information.
It is hoped that the technology would help eliminate middlemen and give the public greater control over what third parties find out about them. Facebook is a major player in online identities because it enables its users to log into a myriad of websites using their social network credentials. However, concerns have been raised that privacy could be compromised as a result – with Mark Zuckerberg’s company gaining an insight into every accountholder’s online habits.
The investment is significant because it gives an indication of where PayPal thinks blockchain technology is heading. So far, the tech giant has been pretty cynical about cryptocurrency’s potential for the future – deciding against offering Bitcoin as a payment method. This has been borne out of concerns that crypto is simply too volatile to be used for purchasing everyday items.
Speaking to Forbes, a PayPal spokesperson said:
“We made an investment in Cambridge Blockchain because it is applying blockchain for digital identity in a way that we believe could benefit financial services companies including PayPal.”
Blockchain is widely regarded as having potential when it comes to identities and official documents because they can be securely issued, with a lower risk of fraud. Educational qualifications and property deeds are two types of documents that could benefit – and advocates believe that this technology could even offer a viable replacement for the humble photo ID card in the years to come.
Cambridge Blockchain’s technology is geared towards financial institutions, with a view to helping them reduce the cost of performing so-called “know your customer” checks. Equally, the company hopes its solution will make it far less arduous for the customers to have their identity verified, saving them time.
Confirming PayPal’s investment, Matthew Commons, the CEO of Cambridge Blockchain, said:
“Our service helps streamline digital identity compliance while giving customers control over their identity data.
“We are honored by PayPal’s vote of confidence, and we look forward to their support and guidance.”