3. Self-Sovereign Identity

3. Self-Sovereign Identity

Detailed Description of the 1CoinH Technology

With very simple software that runs on every smartphone or computer, anybody can make a combination of some pictures, name, birthday and some other features as color of eyes, hair and other descriptions that identify you in one .png image file. This image is then hashed (sha256) which gives you your 64 hex-characters ID-Code. If we are afraid of quantum computing we could simply create larger hashes. You can always update your ID.png card by adding previous ID-Code hashes to the image, update your pictures or data and hashing it again. It should be clear that this is the only way a real Self-Sovereign Identity can be created, simply because no one else can prevent you from doing so, and also nobody can destroy that identity (unless they crack the hash).

Illegal Copies

Now the second part is the major issue. If you want to attach the property of money creation to this ID, how do you prevent people from creating multiple ID’s to create a multitude of money?

There are several ways multiple identities can be created. You can do it yourself with your actual name or another (slightly or fully changed name) or someone that has a picture of you or of himself and uses your name, etcetera. There are many ways to create a false ID with the goal to get one or more extra streams of 1CoinH.
And How To Prevent It

There is no way to prevent people to create multiple, fake ID’s (The Sybil attack). This means that created 1CoinH coins must be labelled in a way that they are traced back to their originators and that people are able to decide for themselves if they want to accept coins from an originator they don’t know. Only when you are sure the coins are legit, you can – for example – sell your privacy crypto to the person with these legit coins. The only way to know if coins are legit is when you are able to trace them back to people you actually know and that are in a lager group with also several people you also know more or less and that you can see that the coins they exchanged originate from this group or have longer histories.

Personal Blockchain

The trick to do this is receive a full personal blockchain from the person that wants to use the coins. The open source software that is used for the creation of coins and also to store all transactions in your personal blockchain copies your blockchain to the person you do a transaction with and copies his blockchain to your device. The open source software checks the number of people your transaction partner has dealt with before and verifies these transactions with the transactions that you have done in the past and whose blockchains are also stored on your device. This way each fraction of coins in possession of your transaction partner can be traced back to its origins. When you have a multitude of mutual acquaintances, the confidence level of these particular coins go up and you can decide only to take these coins, or to take the fresh created coins of your transaction partner, as you can check that they have proper legitimacy. The same open source software checks the value of the coins after depreciation.


In short: The solution to ID fraud is rating of each coin that is being offered. In reality it is even so that each portion of a coin can be traced back to its originator. It is even possible to do this fully decentralized with personalized blockchains. This means that – in stead of using one synchronized blockchain – users just share their personal blockchains at every transaction, which reduces the size of data copying/downloading extremely and makes it possible that the system can be used in a mesh network that is even running without internet connection for longer periods of time. These features are necessary for adoption of this system in remote areas or where the globalists restrain the internet.

Digital Signatures

To avoid confusion of the validity of a transaction we can use digital signatures. Digital signatures however cannot prevent people from illegally using multiple identities. So lets see how important it is to use digital signatures at all.


A digital signature is a good way for both participants to authorize their transaction. But what happens if for example someone steals the signature and abuses it? In that case you should be able to go back in your blockchain and fork it, if you not already have done that because the abuser is the one that created an illegal fork without you knowing it. This means that you – as a self sovereign person – can decide to create forks at any moment. The question is would you dare to do that if it is not legit? Which is the same question if you would dare to add a transaction with a person when it didn’t take place in reality. With digital signatures this would be very difficult. But assuming there are no digital signatures, would you do it? What are the consequences?

The Consequences Of Fraud

What will happen is the same what will happen if you encounter a person that uses more than 1 ID-Card. What do you do? You probably don’t want to use any of his coins at all. But what if somebody else tries to frame you and made the double identity of you?

It is likely that there will be an international register on the internet where you can find instances of people that did fraudulent transactions or used multiple ID-Cards. But also these reports could be fake. How do you know what is true?

The Surviving Fork
In all those cases it boils down to the question which fork of the persons personal blockchain survives. And survival of the fork is in fact a matter of a persons trustees. The people that trust you will continue with the fork you tell them to use, where the others will probably never want to deal with you or any of the other double identities they have encountered. This is the reason that there is no need for digital signatures: Committing provable fraud will cause massive long lasting distrust which seems a bit pointless on a world where most necessities are provided anyway and where money has become more similar to ‘a thumbs up’ or ‘like’.

Don’t Waste Trust
Also in the beginning, where the coin doesn’t have real value, it seems a bit silly to commit fraud. And later – when you have a large blockchain with many connections – it seems silly to waste the trust on a simple fraud.

Security Image
Because of these assumptions it seems right to start the prototype without digital signatures and see how that works in a pilot. Having no digital signatures also avoid all issues with protecting the secrecy of the private digital signature key which would be very difficult for most people. We will however the possibility to include the hash a security image. A security image can be the scan of a contract that is digitally signed (outside the 1CoinH app). But it can also be the hash of a picture where both seller and buyer smile into the camera holding the sold object, both proving the deal is real.

Putting hashes in the appended changes in your data create a “blockchain” and makes sure any minute change in the old data can be easily detected. When you add “Proof of Work” attributes to the hash (a protocol asking for the hash to begin with a number of zero’s) it becomes even more secure. Together with the digital signatures these mathematical methods create the perception of solid security. Reality is however that the average person will not be able to protect himself against losing his Private Key to hackers. This problem is very underestimated but is so fundamental that it is already clear that this single issue will destroy all cryptocurrencies in the end. Hashing and other digital security systems won’t protect cryptocurrencies against the ultimate disappearance of trust from the average person.

To Be Self-Sovereign
In the 1CoinH philosophy, any person is a self-sovereign being. You create your own ID-Card and you are responsible of your own transaction data. You can decide at any moment to abandon your identity completely or to change anything in the history of your transactions. But when you do change your transaction blockchain, anybody that you did transactions with will spot the irregularities easily when they compare your blockchain the got directly from you with your blockchain that they receive from others. When they spot the irregularities, it means that it is very likely that your coins won’t be used in that transaction and that the holder of your coins will be very annoyed about it and will confront you about it. This is why it will be very important to be as trustworthy as possible.

A method to be trustworthy is hashing. When you hash your transaction data, you are able to spot any changes in your data very easy. You can store the hashes regularly in an analogue way (writing it – or parts of it – on a piece of paper) so that you can spot any hack or data-corruption by malfunctioning hardware.

Key is however that the hash is not securing anything. The only way to make others trust you is to act trustworthy. And as a self-sovereign person, it is fully up to you how you will go about that.

Still Have Questions?

The 1CoinH / Ethical Money system is nothing like we have ever seen before. We can imagine you have plenty of questions left.

Please don’t hesitate to ask us. It also helps us to understand what we haven’t explained well enough.