‘’A decentralized Ecosystem of an Identity Verification Tool Using National Big-Data and Blockchain.’’

Technicals

Price: $0.017486 USD

Market Cap: Not listed on CMC, my own calculation = ~$63 Million

Where to buy? → KuCoin

Volume: Relatively low

Type of token: NEP-5 (NEO Blockchain)

Clear downtrend

First off, I am going to start of a summary of their whitepaper, going into some technicals what this project is and how it works.

What is TheKey?

THEKEY Project is a world-leading solution provider in IDV (identity verification) industry. The project is planning to leverage innovations in Blockchain and Smart Contract technologies to develop second-generation IDV (identity verification) solutions. THEKEY is built on the NEO blockchain. THEKEY will co-establish a smart economy which consists of digital assets, digital identity, and smart contract together with NEO.

Second-generation IDV solution

The second-generation IDV solution will be realized by BDMI technology. This is ‘’Blockchain based Dynamic Multi-Dimension Identification’’ technology. The goal of this is to generate undeniable and unalterable IDV results, as the blockchain is tamper-proof.

BDMI embraces six elements simultaneously to deliver the perfect solution for IDV:

Unique biometric data serves as the base for BDMI.

The key data of BDMI used for IDV are validated in advance by government authorities.

The data of BDMI used for IDV are comprehensive enough so that it can meet the different requirements of various clients.

For reliability, cross-checking is always carried out during IDV, between government validated ID data and behavior data and scene data of the same user.

To ensure solidity of BDMI, it always uses updates data.

Once an IDV is completed, the result will be properly documented for audit, so that the personal credit of the user can be evaluated and credited.

How does THEKEY work?

BDMI is a combination of two technologies: DMI and Blockchain.

DMI

Instead of setting up a centralized database, THEKEY deploys a DMI (Desktop management interface → abstracting components from the software that manages them) within information centers of provincial or municipal governments. The advantage this gives is avoidance of duplication work for data collection, processing, and authentication.

DMI systems in different cities focussed on processing the centralized acquired data include five models:

Data collection module: Based on ETL technology → extracts data from different sources and uploads it to a central site Data Standardized Module: Data needs to be standardized before it is usable. This is standardized by the Communication Protocol Standardization module and Term Standardization Module. The chart below illustrates how the communication protocol works.3)

The communication protocol

Primary Index Module: This module is used as a search dictionary used to easily find all relative files. Data Warehouse Solution Module: This module is to ensure all individual files are properly stored in the data warehouse so that once an IDV process is triggered, all the relevant files can be easily found. IDV Engine: Will complete the IDV service in forms of attestation based on the data exchange platform, which embraces the four modules described above. When an IDV process is triggered, the biometric data sent by the user will be verified by the IDV engine against the biometric data of the same user but authenticated by data stored by government authorities. This verification will be further checked with the latest behavior and scene data of the given user, received from other validators. When satisfied, the IDV process will continue. Personal credit will be evaluated and calculated through the previously mentioned audit. The centrally collected data could be well processed, transformed and easy to exchange among different systems.

This whole process seems to be very centralized which goes against the core value of a cryptocurrency — decentralization. How will THEKEY decentralize the IDV process and make sure not one central authority will contain all the data?

The Blockchain

THEKEY will process the IDV on the blockchain. After the process is finished, the data will be encrypted with a hash algorithm in Blockchain for decentralized applications. Data ownership verification, authorization, pricing, and payment will all happen on the Blockchain. The blockchain is a distributed ledger which is immutable, meaning it is tamper-proof. By using smart contracts, there is an excellent opportunity to store important data on the blockchain as it is way more secure than a regular central database. For identity verification, it is extremely important that data is safely stored, as a loss of data could mean identification fraud. The diagram below shows how THEKEY will use the blockchain in the IDV process.

How THEKEY will use the Blockchain in the IDV process

The DMI technology will be combined with the Blockchain technology in the following ways:

The individual user will have full control of their PII (personal identity information), and KYC standard in each industry should be followed by a smart contract.

All records of PII information will be stored on the blockchain for auditing in the future.

To secure data to prevent it from being altered, data which is currently stored on central databases will be indexed with an identity data block on the blockchain.

Due to the limit of storage size on Blockchain, an alternative option is to save PII data in the ETL database of the Validator in THEKEY ecosystem and save the hash value of the underlying data on Blockchain.

These four bullet points described above are essentially the BDMI discussed earlier.

The framework of BDMI can be divided into different layers (shown in the diagram below).

The protocol layer is set up on a Blockchain such as NEO, ETH, EOS, Lisk, etc.

The interface layer provides identification data modeling by which the protocol layer can be connected with applications, to realize data standardization, anti-fraud modeling and smart contract trigger etc.

The application layer will realize the scenarios where identification can be used, where interface and SDK (Software Development Kit) shall be provided for the data exchange.

How the BDMI architecture will look like

Existing IDV solutions

THEKEY already has an existing IDV solution. It is being used in an app known as “Social Medical Insurance 123”, by which people can make mobile social medical insurance payments. A medical payment is not a regular payment like in a store. More requirements need to be fulfilled before a social medical insurance payment is made.It is critical to identify if the payment applicant is the same person as the beneficiary of the scheme. The existing IDV solution facilitates this process in eight steps:

Registration: User uploads biometrics data on the app → will be checked against relevant data and further cross-checked with already validated data, that has been stored by other organizations.

Once the user goes to the hospital, he/she uses his or her fingerprint or face to make the payment instruction through the registered APP which triggers an IDV request.

In response to the user’s payment instruction, the hospital will send the prescription as the claim, via the registered APP of the user, to the medical insurance agency.

THEKEY will first make a comparison between the biometric data from the user and the biometric data authenticated and stored by medical insurance administration agency.

Once THEKEY is satisfied, it will further cross check with the latest information collected from other institutions, like public security agencies, telecommunication and internet companies, among many others. This is to assess 1) if the user is still alive, and 2) if he/she still enjoys the entitlement of medical insurance.

Once the user has been proven to be eligible for medical insurance, THEKEY will then collect all other relevant information for authenticity, eligibility, compliance and rationality checks against the claim submitted. Once the medical insurance administration is satisfied with those checks, the payment will be approved.

The results of the above calculation will all be properly documented after the transaction is completed for regular audit.

In the audit, the credit of both user and hospital will be evaluated, calculated and documented, as per the anti-fraud, abuse and waste policies of the medical insurance administration agency. Criteria from other industry like financial industry, telecommunication, fintech companies are also used, on a pilot basis, for personal credit evaluation.

Advantages of the IDV solution of THEKEY compared to others:

The individual user does not acquire the data for validation. Instead, the verification of IDV is done by checking the data uploaded by the individual user against validated data by governments or public authorities. If the user was the reference to the data, there would be room for fraud.

The existing app provides bridging of information submitted by the user and the user’s own identity record stored in government or public institutions. We do not need users to store their Personal Identifiable Information (“PII”) on the App. Therefore, hackers are unable to access to users’ information by invading any newly developed platforms.

Milestones of the current IDV solution

As mentioned earlier, THEKEY already has an existing product in form of an app. Some of their milestones are:

Obtaining 23 copyrights, acceptation of 15 patents by the State Intellectual Property Office of the Public Republic of China and start of attestation process.

The previously mentioned App is used in two pilot cities, with which people can make payment directly from their social medical insurance account. The IDV solution is now being deployed in another 41 cities , covering more than 130 million people .

, covering more than . Personal identity data, authenticated by relevant government authorities of 210 million people in 66 cities , are connected on a real-time basis, which constitutes a solid foundation of IDV.

, are connected on a real-time basis, which constitutes a solid foundation of IDV. Commercial contracts signed with the reputable firms worldwide and the business model of our IDV products has been proven.

Six relevant national laboratories have been set up together with government agencies , banks, insurance companies and one university. Knowing how powerful the government in China is, working with them is a big advantage and could lead to a monopoly.

, banks, insurance companies and one university. Knowing how powerful the government in China is, working with them is a big advantage and could lead to a monopoly. Commercial contracts signed with world-leading firms and the business model of the IDV products in this white paper has already been partly proven. I will mention the firms later on in this review.

Implementing the second-generation IDV solution

As mentioned earlier, THEKEY will implement their second-generation IDV solution on the blockchain by using BDMI. The current IDV solution is only applicable in a centralized community. This is where the need for the Blockchain technology comes into play. Blockchain offers a solution to the problem of combining accessibility with privacy and security. Records can be held securely, using end-to-end encryption, and yet openly referenced and documented in a decentralized autonomy community. This solves the problem of dealing with highly sensitive or classified information in a way that still enforces

all the privacy and confidentiality rights that consumers and regulators expect.

Blockchain technology will also help establish an ecosystem, through smart contract and digital currency, so that all participants are financially motivated. With Blockchain technology, THEKEY expects the planned IDV product to serve users better. People will no

longer need ID card, passport, keys, credit card, even mobile phone for

making payments, opening bank accounts, applying for loans, receiving

pensions, and paying medical bills.

Advantages of the second-generation IDV solution compared to competitors:

More reliable results — The supporting data is gathered in real time,

is comprehensive, accurate and reliable. The data is also validated

in advance by government agencies or other public institutions.

is comprehensive, accurate and reliable. The data is also validated in advance by government agencies or other public institutions. Lower cost — Full use of existing data sources. Avoidance of

duplicate work for data collection, processing, and authentication,

duplicate work for data collection, processing, and authentication, Better user experience — It is not necessary for individual users to

install any application or upload any information.

THEKEY Ecosystem and TKY token

As with any other Blockchain project wishing to tokenize its ecosystem, it is important to determine the use-case. Why is there a need for tokens in the ecosystem and what are the benefits?

Ecosystem

THEKEY wants to develop an ecosystem for providing IDV service. It will be a decentralized autonomy community, which will consist of three components of participants: Validator, Service Provider, and Individual User. Validators may include THEKEY, government entities, financial institutions and utility companies among many others. Since THEKEY is already an IDV service provider trusted by the parties concerned, it is easier to obtain data needed for IDV service from other sources, including highly sensitive data from government agencies as well as the data like medical records from hospitals. It is, therefore, an important node or an important validator in a decentralized IDV ecosystem. It is however not the only node or Validator in the Ecosystem. Once Validators receive an IDV request against a user from Service Providers, together with the consent of the same user in forms of Smart Contracts, they will process the IDV request and generate result. After that, they are able to ‘stamp’ their approval on the Blockchain.

Smart Contracts

Furthermore, the ecosystems will make use of Smart Contracts. They will be used in the following way: before an IDV service is provided, various Smart Contracts need to be signed off by all parties concerned, including validators, individual users, and service providers. Smart contracts will have “built-in” government rules, regulations as well as KYC (Know Your Customer) policies of different industries. The built-in policies of governments and industries will not only make a healthier Ecosystem but also save customer time for confirming what PII can be used every time when IDV service is needed.

The TKY token

The final aspect of the ecosystem is the token: $TKY. As an investor — or speculator in case of many cryptocurrency projects, you are looking in return in form of an increasing token price. Therefore it is important to know how a token generates its value.

How will the token be used?

The TKY token is the only method to settle smart contracts signed between the participants in THEKEY ecosystem as a means of payment. Different participants can use the TKY tokens for different services on the platform.

Individual users can use them to purchase identity-related products and services that will be developed at a later stage from THEKEY, such as service to run a personal background check or access to individual credit reports, etc.

Service providers will pay TKY Tokens to Validators to purchase IDV service.

Other Validators will also make their identity-related products and services available through the Ecosystem. Moreover, THEKEY will also use TKY Tokens for paying to other Validators or data providers when collecting data to enhance overall accuracy, comprehensively and completeness of PII for IDV processing.

Is there any inflation/deflation of tokens?

TKY tokens can not only be obtained by purchasing them of exchanges but will also be able to be earned. All three parties (individual users, service providers, and validators) can earn tokens by providing valuable data. Earning tokens can be seen as an incentive to contribute to the ecosystem. The current circulating supply is around 3.63 billion tokens, which is a lot. However, it is only a relatively small number compared to the total supply of 10 billion. Furthermore, 1.26 billion TKY tokens are locked up. This means 50% of the total amount of tokens is in circulation currently. The team does not give specific information about how many tokens can be earned through the contribution to the ecosystem, which can be a concern considering inflation may occur.

In conclusion, like many other platforms, the valuation of the token will derive directly from the quality and adoption of the ecosystem.

Diagram which shows the infastructure of the project

How the ecosystem works

The main features for IDV in THEKEY ecosystem are listed below:

Individual users are always in full control his or her PII. An individual user will use biometric data, such as fingerprints or face through THEKEY App or device installed at the service providers. No process will be continued unless the individual user makes such confirmation, meaning there is no room for service providers to commit fraud.

Specific requirements on PII data in the IDV request will be reviewed against the KYC standard policy of different industry before processing IDV requests. For example, an IDV request sent out by a hotel containing the information on individual users certain medical history might be rejected, as it is not compliant with hotel KYC industry standards. However, the same request from a medical insurance company may be considered and accepted.

The individual user does not need to upload his or her PII. Validators will collect requested data accordingly after the ratification of the first two items above.

Three sets of PII data will be gathered: Identity data, Behavior data, and scene data. Identity data are from government authorities, behavior data are usually from financial institutions and utility companies among many others, whilst scene data are normally from service providers who are seeking for IDV service.

Examples and potential use cases

Example 1: An IDV result as per a request from a hotel in Hong Kong at 9:00 am is positive, one hour later, the IDV result based on a request from another hotel based in the United States against by the same user might be negative, as there is some conflict in the Scene data for the given user. No room for fraud because of the Blockchain. Every data source/validator in a decentralized IDV environment is a node of the chain, meaning similar information. All while PII of users is well protected.

Example 2: An individual user who is living in Beijing needs to be identified, such as for the purchasing of medical insurance in Singapore, the insurance company will trigger a request for IDV service. The insurance company triggers off an IDV request including certain medical-use history of the given individual user → the user accepts this through THEKEY app/ finger scan and signs of a smart contract between the user, the insurance company and THEKEY → THEKEY will review the IDV data against the KYC policy of the industry and validates it between fingerprint data sent and the relevant data validated by the government → Once THEKEY is satisfied with the validity of user’s ID, IDV will continue → Relevant PII and other metadata will be collected as defined by the Smart Contract. → THEKEY will stamp its approval on Blockchain as the verification result so that the medical insurance company can use it → The Smart Contract will be settled by TKY Tokens. At the same time, all previous calculations will be documented for future data audit.

Outcome: The IDV process reduces costs significantly, enhance accuracy and reliability for the medical insurance company, which will help reduce insurance premiums.

Use-Case 1: Convenient life. When you open the door of your house/car/office, face recognition and fingerprint digitals on the door handle will scan the user to confirm the identity, and compare it with the latest behaviors maintained on Blockchain, by which it will justify the rationality of the time and place you are now granting access.

Exit and entry through customs are complicated. However, with THEKEY Ecosystem, things get easier via face recognition and fingerprint verification, backstage information, blacklist from public security office, visa record, flight information and hotel information, will ensure effective clearance by the customs → saves a lot of time and money, with enhancement of security.

Use-Case 2: Automated Diagnoses and Treatment of Diseases. This is a little far-fetched, but it gives an outlook what we might expect from the future. An intelligent device on your body will detect the detailed data about your body when you feel feverish. MTS1 will diagnose your disease and recommend the most suitable medicine or diagnosis and treatment scheme according to your health record. It can even recommend the nearest and best doctor to you. The mixed payment from social security funds, self-paying and pooling funds will be completed in one action. Besides, the Blockchain IoT technology will help you get the cheapest medicine as fast as possible, which can be traced back to the source.

Use-Case 3: Insurance Recommendation. Insurance premium is a topic with a lot of debate. The reason for the debate is the presence of asymmetric information. The client knows more than the provider (insurance company), and therefore there is inefficiency causing premiums to be too high or too low. With THEKEY, you can give certain access permissions to the insurance organization, which it will base an appropriate insurance package for you. The insuring, underwriting and claim settlement are all based on your electronic identity on THEKEY Ecosystem, and controlled by smart contracts. Moreover, you can sell your own personal data to insurance companies for actuarial purposes, which can decrease the insurance premium you need to pay. This reduces asymmetric risk and determines a more fair insurance premium for both parties.

Roadmap

The Roadmap

The roadmap for THEKEY dates back to 2014, which is longer than most cryptocurrency projects. This shows there has been done a lot of work before launching their ICO in 2017. Furthermore, their roadmap is not very detailed which is unfortunate. There are two exciting events in 2018, their testnet in June, and main net in December. It is a long wait for the main product to be released which is unfortunate.

Team, Advisors, and Investors

THEKEY lists 7 core team members in their whitepaper. The CEO is Catherine Li. She was awarded as the most outstanding female entrepreneur in China in 2017. She has over a decade experience in medical information. The president IDV and blockchain is Ken Huang. He is an all-star as well, however, his LinkedIn says he currently works at 5 blockchain projects simultaneously, which could lead THEKEY project to snow under. The CTO is Geochun Xu. He has 17 years of experience in computer technology and is an expert on blockchain technology and big data application. However, he does not mention anything about this on his LinkedIn. The team overall is decent, but are not all-stars.

THEKEY mentions two advisors and consultants on their website. One of which is Roger Lim, the founder of NEO Global Capital. He is a famous investor and advisor for many cryptocurrency projects. NEO is also an early investor in this project. Another investor is Rexford Ventures, a famous venture capital firm which invested in many successful blockchain projects.

Strategic Partners

Here is where it gets interesting. THEKEY is partnered with:

China Unicom → $39.1 Billion market cap

→ $39.1 Billion market cap OnChain → Company behind NEO

→ Company behind NEO ChinaRe → $75 Billion market cap

→ $75 Billion market cap Ant Financials → Most valuable fintech company in the world

→ Most valuable fintech company in the world Ping’an Bank → $2.5 Billion market cap

→ $2.5 Billion market cap Uniscom

Minsheng Bank → Worth over $600 Billion

→ Worth over $600 Billion China Social Insurance Association

Tsinghua Unigroup → Part of Tsinghua Holdings, which is part of Tsinghua University. It was worth around $2 Billion dollars in 2015.

This is a major list of partnerships, and include many multi-billion dollar corporations. This is very impressive for a project with such little market cap. THEKEY are also working with the Chinese government as mentioned earlier, which is perhaps the largest ‘partnership’ considering their target market.

THEKEY has one of the most impressive partners out of any cryptocurrency project. Their partnerships are worth over a trillion dollars, which is absolutely insane. This alone is one of the reasons I think it is very undervalued.

Impressive partnerships (there are more partnerships than on the image)

Communication and Community

THEKEY is targeting China as their target market. Most of their marketing is done in Chinese, causing it to fly under the radar in the Western world. Their white paper also has some grammatical flaws, I don’t think this is a major problem as they are Chinese and targeting the Chinese market. The Reddit has around 4800 readers, the official Twitter account has over 24,000 followers, and their telegram group has over 20,000 members. This shows there is a lot of interest in the project, even though I think it is still overlooked massively.

Messy ICO

TheKey had a messy ICO. It was one of the first NEP-5 tokens to come out, and therefore their token sale went a bit rough. There was too much traffic on the website, which caused malfunctioning of the website. The ICO price was also raised which scared some inventors. The total hard cap was not reached and the hype around the project died out and is currently flying under the radar. This is a great opportunity to profit from the ‘failed’ ico.

Competition from SelfKey

SelfKey is another ICO which recently launched. It is relatively similar to THEKEY. SelfKey is targeting the western world, while THEKEY is targeting China. Although they are competitors, this market is not a zero-sum game. There is room for co-existence, and the projects will not yet face each other directly because of different geographical segments. Taking into account how conservative the Chinese government is, they will not allow an American project to collect data of Chinese citizens. THEKEY also has a more experienced team in my opinion, and the partnerships open doors towards fast implementation in China.

Conclusion

As the world digitalizes, there is a need for identification to be digitized as well. THEKEY solves this problem and comes with a practical solution based on Blockchain technology which lowers the identification costs and makes it more secure. The use-cases of this project could be massive if they succeed. I do have concerns about the high number of tokens still to be issued, and possible use cases for the token, however. They are currently operating in 61 cities and gathering data of over 260 million people. The team, advisors, and investors are solid. The companies they are partnered with are worth more than a trillion dollars combined, which is just astronomical for a cryptocurrency project. THEKEY is a NEP-5 token. Digital identity is one of the foundations of NEO, and that is why I think THEKEY is suited well as an NEP-5 token. THEKEY had a messy ICO, and combined with the bearish market state in 2018 so far, it results in THEKEY to be massively overlooked and undervalued in my opinion.

I hope you enjoyed this review! Make sure to follow me on Twitter:@DecentraIzing

References and other good articles to read:

https://www.thekey.vip/faq#n15

thekey.vip

Thekey whitepaper

https://steemit.com/cryptocurrency/@pandorasbox/thekey-tky-news-revealed-largest-chinese-chipmaker-and-largest-chinese-telecom-company-partnered

Disclaimer: This is for entertainment purposes only and is not financial advice.