Mining Giant Bitmain Launches KYC Tool ‘Coconut’
Bitmain, the world’s largest Bitcoin mining manufacture has launched its advanced know-your-customer protocol (KYC), named Coconut. Different to numerous identity authentication schemes in the industry that attempt to carry out authentication in an absolute decentralized manner which is not quite feasible considering today’s reality, Coconut is a privacy-sensitive solution for the implementation of KYC in blockchain.
According to the explaining document, Coconut adopts Intel’s Enhanced Privacy ID (EPID) to authenticate identity. It fully protected user privacy by separating the real-name authentication responsibility from the business platform, meanwhile following the regulatory KYC requirements to allow freed tracking of customers trading activities.
“It isolates the identity authentication entity from the actual business entity, allowing for identity data and business data to be managed in different organizations. Coconut protects user privacy fully, while meeting KYC requirements. Coconut finds the balance between privacy protection and regulatory compliance.”
Bitmain believes that the separation of user’s identity and their transaction history as well as other business movements, is one of the fundamental value of blockchain. However, the new regulations are requiring appropriate KYC procedures when conducting crypto-related business activities. Coconut is an authentication tool to provide independent verification solutions to both crypto practitioners and their business participants.
According to the official blog, Bitmain is launching Coconut to satisfy new regulatory requirements and mainly aiming to allow organizations to conduct business legally and compliantly.
Once users are identified by organizations, they are given EPID private signing keys that prove they are valid members of a group without revealing personal ‘real name’ identity. The valid signatures corresponding to the Intel EPID certificate can also be revoked and added to the blacklist once a private key is lost or copied, which may reduce the fraudulent identity risk significantly.
In addition, Coconut can be used in various business models. For instance, it can either provide Intel EPID identity service to external business platforms or provide an authentication system for risk management to big corporate groups.
Lorie Wigle, Intel VP Software and Services Group General Manager concluded that:
“Intel EPID was created as an open technology and ISO standard to solve the intersection of managing identity at scale while offering anonymity for users and devices. Bitmain’s implementation of Intel EPID unleashes the true potential of blockchain technologies by improving privacy as a barrier to adoption.”