How Digital Identity Will Reshape Your Business with Vinny Lingham

[upbeat music] All right. Welcome to another episode of 51 Insights.

Today, we're gonna talk about digital identity and its impact on consumers, and I'm very pleased and honored to have on the show today Vinny Lingham. Vinny, hello. [chuckles] Hey, Marc. [bell chime] Good to be here.

Thanks for having me. Yeah, likewise. Um, great to have you on the show. Um, Vinny, you've been in this space for many, many years. Um, you've seen a lot. You've done digital identity.

Now you've building, you're building an AI startup. Tell us a little bit what you do, where you come from, and how you got into this space. Yeah, so, uh, I've been in, in tech for 25 years now.

Uh, multiple, uh, tech companies, everything from, you know, uh, search engine marketing and ad tech to mobile payments to, uh, blockchain and, you know, AI.

Uh, I'm actually-- Uh, I've stepped down as CEO of, of Roomy.ai. Um, [lips smack] I'm chairman now, and I'm just focusing more on personal, um, investments and, um, you know, just looking after my portfolio companies.

I've made hundreds of investments over the past, you know, two decades.

Um, and so I've got a lot of portfolio companies that, that always need help and, uh, you know, companies I've started and, and operated that I'm involved in.

So my time is kind of split, and being a full-time operator doesn't really work for me anymore. Um, so I'm in that phase of my life right now. Okay. So that's super interesting.

Uh, yeah, I know you work in a lot of fields. One of the fields you focused on, and that's the company you founded in 2015, that's Civic. Uh, Civic is one of the leaders in digital identity.

But before we talk about Civic, uh, I just wanna start a little bit earlier. Um, you've been in, in blockchains for a very long time. Um- Mm-hmm... why, why did you got interested in identity?

So I was, uh, in, in Bitcoin in 2013, so very, very early on, and my company Gift was the largest, uh, you know, Bitcoin retailer.

In other words, people spend more Bitcoin with us than anyone else, uh, on a, you know, based on sort of percentage of blockchain transactions. At one point, we were 5% of daily transactions, um, which is crazy, right?

Um, and I, I think, uh, I just started seeing the gaps in the market here, and one of the biggest gaps in the market was [thud]

as we try and take Bitcoin and crypto from something which is very, um, you know, I would say, uh, nascent to something which is mainstream,

uh, I just saw a world where we need to know who the person is on the other side of the transaction more and more for, for, for multiple reasons.

One is just, you know, uh, just improving trust in the ecosystem, um, [lips smack] and the other one is, is just banking regulations and compliance, 'cause I didn't see a world where the governments would sit back and just say, "Hey, you can do whatever you want on crypto," and, you know, money launder, you know, evade taxes, and finance terrorism, which is the hot-- those are the hot buttons they have.

And, and I think I've been largely right that the government is out to get crypto now, and that's what you've seen in the, in the most, in the current administration's a-approach to crypto.

And so I saw the opportunity to actually create a decentralized identity network where you can hold your own information and, and it's not sitting in a bank, uh, server, and, uh, the bank is not controlling your information and how you use it, but then you can use it and assert who you are where you need to.

Um, and so that's the, the, that's the sort of core fundamentals of the tech is that Civic doesn't wanna own your identity. We just want to allow-- We wanna allow you to use it everywhere.

And, um, and I think, uh, in a centralized world, the banks are the guardians of your identity, and they are the gatekeepers, and they can freeze your accounts and, and w- do all those things.

Um, and with us, we're just trying to create this identity layer that everyone can use and, and, and, and be compliant.

Um, so it, it, it was a very ambitious, uh, company and project, and it still is, and w-we're making, I'd say, good progress.

Not as fast as we would've liked, but we're making good progress, and partially because the governments haven't created regulations that are, you know, that, that, uh, that people have to conform to.

So it's kind of still the Wild West. But I think that in a world where, um, we move to better compliance in crypto, I think Civic will do really well because we've built all the tech around this.

We've got tons of patents around it. We've, we've just invested a lot of tech and IP, and we have great people working on this problem for a long time. Mm-hmm.

Yeah, you, you, you said you make good progress, but it was also, um, you know, it took longer than expected. What makes digital identity so challenging?

I mean, when I, when I hear about digital identity, uh, here I'm based in Switzerland, um, I hear a lot, and we have a lot of discussions about the, um, the digital, uh, health report and bringing them, bringing that on-chain and kind of enabling information sharing between insurers and doctors and everything, and it's been a project for many, many years.

We haven't figured out how to, uh, bring that, uh, to life because it involves so many stakeholders. It's, it's so complex. Um, and I feel it's a little bit the same for digital identity.

Well, I'll simplify- What, what-- Yeah. I'll simplify for you. The, the, the real issue here is that everybody wants to own your information.

No-- All these big stakeholders, big companies, uh, governments, they all wanna centralize this data and own it and control it, and nobody wants to give it to the people, and that's why you always have these conflicts.

It's like, "Well, we have to own it. We have to control it. We have to know." There are so many ways around that, but, but the, the issue is that the powers that be don't want you to be in control of your own data.

And there's a number of, uh, issues I think that people, uh, you know, kind of gloss over. Everyone thinks that, oh, well, if I own my data, I can sell my data, I can monetize my data.

Yes, you can, but it's-- in aggregate it's not worth much. Uh, sorry, individually it's not worth much. In aggregate it is. If you're Facebook and you own everyone's data, you're a multi-trillion dollar company.

But if you-- uh, if everyone owns their own data, i-individually you don't get any scale there, so you don't get a lot of revenue per year on your personal data. So that's the problem.

The economics don't really work when you try and aggregate, uh, or, or give people... You decentralize data versus aggregate data.

Um, but again, the politics always, when I sit in these meetings and I listen to these banks, and I've had tons of conversations, yeah, it's always about them wanting to own and co- control and centralize your data, and that's not our mission.

Our mission is to decentralize identity information. Mm-hmm. Can you, uh, paint that world a little bit for our listeners? How would that look like if everyone had a decentralized digital identity?

How would you surf the web? How would you use Web3? So couple of ways is obviously you'd have a, a, you know, a crypto wallet, uh, on your, on your, uh, browser, so a MetaMask or Phantom, uh, for example.

You'd have a, a wallet that has, uh, credentials attached to that wallet. So for example, you could say, "I'm a US citizen living in California," whatever, whatever.

And, uh, Civic would attest to that data based upon information that we've, we've proven or we know about you, facial recognition. We don't store the data. We just write the, the attestations to you.

And then when you go to a website, you can log in, and if they trust Civic, that we've done it, you know, we've done it, they can say, "Okay, is he a US citizen? Yes."

They don't have to ask you where you live, uh, what your address is. Or, "Does he live in California?" And you can just, "Yes." And, and so using zero knowledge proofs, we can help websites and services identify people.

And if they need to know exactly who you are, we can still provide that information for, to them, and they can store it, but then you know that they're storing your information and you a-agree to it.

Um, you don't have to be re-verified every single time. They can also say, "Hey, uh, we know it's Mark, but can you just double check and ask him to s- to, to do a, a selfie?"

So you pick up your phone with a, a good scanner. It, it, it verifies that you're, you're there in front of your phone, you know, and you got your credentials and, or even your computer. And it's done, right?

So, so we're at the point now where we can verify that someone hasn't hacked your wallet and is trying to use your credentials. So w-we, you know, that's the tech we've built.

We've got Civic Pass, which is an- I think about a million passes issued right now and still growing. We've got-- we're across 12 different, uh, chains.

Um, we've built a lot of infrastructure and a lot of tech over the past, um, you know, nearly a decade.

And so w- I guess we're just waiting for the, you know, government regulations to really say, "Okay, this is how you do identity online."

Right now people are avoiding it because, I mean, this is being frank, most people wanna avoid being detected online. Most people wanna avoid paying taxes.

You know, so, so a lot of people are just kind of a-anonymous in the crypto sphere.

But the moment it becomes illegal or governments sort of clamp down hard, I think something like Civic really takes off because it's the best alternative to, you know, going centralized identity.

So you have a choice: anonymity, centralized identity, and then you have decentralized identity, which is the middle ground. Mm-hmm. W-who are your main clients at the moment? Who are you targeting to?

Are those, like, end users? Are those, um, centralized, um, platforms that wanna work with you? Like, who, who's your target customer? So we, we work with a number of projects.

I mean, uh, one of them is, I think, uh, Gitcoin uses us. Uh, we work with Realm, Realms DAO, Metaplex. Um, you know, we've got a whole bunch of, of, of, uh,

uh, great crypto companies that have, have actually switched to us. We, we're running, um, you know, multi-chain. I think we have 10 EVM chains. We're supported on Solana as well.

Uh, we're GDPR compliant, we're hacking audited, uh, all the rest. So, so it's a great solution. It works. Uh, we have t- you know, we have tons of people using it.

Um, it's still nascent in the sense that-- I think, like, there's, like, over 500 projects using us right now, and we, we've blocked millions of bots and, and whatnot. So, so the product is great. It works.

It is not mainstream yet. But when crypto goes mainstream, I think we are the solution that goes with it. Mm-hmm.

Um, you say when crypto goes mainstream, and when we think about mainstream, we also have a lot of issues revolving around fake identities, fake users, fake profiles, fake bots in mainstream media.

Um, when we look at, you know, the US elections 2016 even, uh, when the Russians interfered with the elections, uh, this election that's coming up, it's gonna be a huge topic what's gonna happen with, you know, AI bots suddenly creating content that's not verifiable.

Um, how do you see digital identity play into this? Um, it's-- uh, honestly, I don't know the answer to that. I wish I knew.

[chuckles] I, I just know that it's gonna be a slow process, and then suddenly it's gonna switch over. Mm-hmm. Does that make sense? Yeah. Because, like, there's just too many moving parts in figuring this out.

I mean, you got 180 countries around the world trying to figure out crypto regulations, um, and, uh, and they don't coordinate well. [chuckles] Yeah.

Uh, and could digital identity be a solution to authenticate content online? Yes. Um, yes. We've worked on this before. We've had products, uh, like ID codes, um, that we've come up with.

Uh, absolutely can, but it's cart before the horse. Do we focus on, um, the authentication part of the content first, or we focus identity p-part?

Once you have identity as a ubiquitous solution and service, then you can do these other cool things. Mm-hmm. Okay. So a, a lot of consumer brands entered the crypto space in the last two to three years.

Many of them experimented with, with NFTs. Um, they look at blockchain, they, they look at gaming, they look at different verticals that are popping up. Um, and one of the verticals they also look at is data.

Uh, and, uh, a problem, uh, for many consumer brands in the last years has been that third-party cookies are fading away, and they, uh, looking, they're looking for new ways to get to first-party consumer data. Yes.

Uh, uh, um, and now how should a corporate leader innovator think about digital identity when it comes to data and when it comes to customer and customer identity?

How could they deploy a solution like Civic and what would, what would, would make it better for them when they would work with a decentralized identity system instead of what they're already doing now with a centralized CRM?

Um, so the, it, it, it really depends on the country, first of all, 'cause every country's got different rules, so people get, pe- people wind up getting, uh, uh, stuck in the, the, um,

people wind up getting stuck in the weeds. Um, look, there's, the issue is there's no one size fits all, right? And so a lot of the... It's a good question.

The problem is I don't have, like a lot of these things, I don't have a good answer for you on because it's very specific to the country you're in and what their rules and regulations are.

So sometimes they're required to store this data.

W- I mean, we've worked with Filecoin, for example, to create, um, uh, you know, a vault, and this vault would allow you to do the KYC checks, AML checks, whatever, put it in a vault, and only under like a regulator saying, "Hey, this guy committed, you know, some atrocious crime," can that information be revealed.

The company doesn't have it, um, the, you know, the government doesn't have it, but it's available if there's some sort of a subpoena, for example, for that data.

And, and so those are the sorts of things we, we've looked at doing, uh, and vaulting it. But it, it's... Identity is a very, very sort of difficult topic 'cause every country does it different.

You got, uh, you know, India's got Aadhaar where they centralize all the things and then they get hacked and the information's out there. The issue really is this. Um, in my... This is my, my personal view on identity.

Information without a signing key is invalid because if you phone a bank and you pretend to be me, and you have all my information, and they say, "When's your date of birth? What's your, uh, address?

What's your account number?" You could, as a hacker, you could have all that information. It means nothing, right?

You can have all the information in front of you, and, but if they say, "Hey, please sign this message with a known key that we know you have," now it's a different story. But they don't do that, okay?

And this is why people have, get b- hacked all the time, um, is because information, knowledge-based, um, authentication is a joke. You cannot do knowledge-based authentication. KBA, and that's how the world runs.

The world runs when you phone anyone, it's like, "What's your date of birth? What's your this? What's your that?" Just 'cause we wanna know it's you. I mean, come on, really?

Like I, I mean, I, we are as, like as a society, we're so stupid that we think that knowledge-based authentication work.

It, it's either we have a crypto key to sign a message and prove that we own the key, so that's one part of it. You have possession of a key or, or, or, or, or some sort of video call facial recognition.

That's getting tougher now because of AI. So I think the future is just key signing. Mm-hmm. Known key signing.

So, a- and, and if the whole world runs on that information-based verification, what needs to change that we get to-

The laws, the laws, the, the laws, uh, the laws allow banks to use this stupid KBA system, and, and they get away with it, and, and, and they, they just accept the fraud as part of the system. Mm-hmm. Um, okay. Okay.

Um, uh, so again, going back to digital identity, um, and how that, how that all works, like let's untangle that a bit and explain our users who may have heard for the first time w- about digital identity, how, how does this work?

What kind of information can you attach to it? How do, how you have to think about that, um, in terms of, you know, Web3 infrastructure that you already know? Is this a, a, a wallet with a key that you possess?

Is this, uh, some kind of- Yeah. Yeah. It's a wa- it's a known wallet, right? So if, if, if Civic has identified Mark as, "This is Mark. We know it's him. This, he owns this.

Th- th- this is the public key associated with his, with his, uh, identity."

If he signs a message, um, that proves that he, uh, he has the private key that is related to the public key, then that's him, and you can ask for an additional validation check to make sure that the, the facial recognition ma- excuse me, matches or whatever else.

That's totally fine. But that fundamentally is the issue. Like you need to have a known public key, and then you need to prove that you have the private key, and, and that's I think the, the, the solution, yeah. Mm-hmm.

Okay. Um, all right.

Let's take a step back and, and look a little bit about, um, look a little bit on your, uh, journey as an entrepreneur now with, with, with Civic and all the other companies that you've built now with Roomi AI.

Um, what have been some of the tougher, toughest leadership decisions that you had to take as an entrepreneur in the last 10 years? The, the toughest le- leadership positions? Lead- leadership decisions. Deci- decisions.

Um, so I think during COVID was the toughest because COVID, COVID presented a, you know, we, like we had a very, very tough time in COVID thinking about how do we... Do we lay off people?

I mean, this is, we're talking March of, uh- You know, M-March of 2020, and I guess the question was, like, do we lay off people? Do we fire the team? Do we, like, what, what do we do? How do you, like, get through this?

You know, w- what's gonna happen? And I think the fundamental belief was that, that, you know, I think crypto would be fine, digital identity would be fine, the remote stuff would be fine.

So, uh, from a financial perspective, we just did a, I think we did a small salary cut, like 10% across the board. Um, which,

y- you know, if you think about it, like, if you can save a bunch of jobs and people's careers and by just cutting everyone's salary and doing a nice trim, um, and you're in a tough time like this, it would be a lot better than just laying off, you know, a, a bunch of people that you need in the company.

And also laying off people in the middle of COVID would be just a horrible thing to do. But, you know, we, we had to figure out what to do financially, uh, 'cause the world was falling apart at that point.

And we had meetings and discussions. In the end, we just decided to, we cut some costs, but we didn't, we didn't fire anyone. We just gave everyone a small trim, and then we raised people up afterwards and, you know...

And, and that's instilled so much loyalty in the company. I mean, 95% of the people are still there over the past four years, 98%. Like, we have a, a small team, 20-odd people, and they're very dedicated to the cause.

They love doing what they're doing, and they, they love the culture, and I think when you make decisions like that, people really look at the management team and say, "You know what? They care about the people."

And for me, that's an important part of being a CEO, is making sure that, that there's a good culture and that people care about what you're doing. Mm-hmm.

Um, and in the last 10 years, you've seen a lot of different things. You've worked in a lot of different fields, AI, blockchain, um, and other emerging technologies.

When you look at that mix of technologies and what's happening now in the space in the last, uh, five years, where do you see this going? What's the most exciting thing for you? In, in, in blockchain specifically?

No, in general, across emerging technologies. Yeah. You know, it's, it's an interesting question as well. Um, I, I mean, AI is obviously front and center.

Now, I'm busy investing in a company that does, uh, uh, like holographic touch. So you and I could shake hands remotely right now, and using a, a, a soundboard which emits these, like, you know, high-frequency waves.

I could feel your hand, you could feel my hand remotely.

I think, I think holographic touch is, is something which if, if the technology can evolve to the point where it's high fidelity and enough pressure, um, that it is interesting. So, so that's...

I, I'm invested in the company for nine years r- now, right now, and, uh, I think they're building some really cool stuff. So I think that's interesting.

Uh, r- remote, remote sensors, so being able to mo- you know, because we, we've done remote sensors on, uh, on visuals and audio. Uh, we haven't done taste, we haven't done touch really.

Um, and I think that's what, like, you know, Apple's probably moving towards something like that with, uh, with the Vision Pro, and I know there's a lot of haptics companies out there, but that's interesting.

I like, I like that space. I mean, AI's kind of overdone. I- everyone can say, "AI, AI." Great, but like, okay, we-- it's out there now. What, what, what's, what's emerging? Mm-hmm. Mm-hmm.

W- where do you see the biggest, uh, opportunities in, in AI when it comes to consumer applications? Um, that's a good question.

I, I- Is it- My company Roomi, Roomi.ai, it's not a consumer application, but it's very powerful.

It's like when you're having meetings and you're able to transcribe things, and the AI is listening to your meetings, and it gives you some insights.

You can go-- We have a thing called Meeting Memory, where you can go and ask it questions about what happened in previous meetings and, and give you summaries of like, "Hey, you know, I meet with Mark every week. How...

You know, give me a summary of what we spoke about the past year." And it'll, it'll give you that.

So, so I think that's kind of cool, um, having this, like, system that basically memorizes all your interactions, keeps notes, and I think for a consumer that, that's powerful.

Um, but, uh, a lot of the stuff in generative AI is, is, is, is gonna be around, uh, making people's lives easier, take less time. I mean, when I do investments right now, I use, uh, I use ChatGPT a lot.

Like, um, I'm looking at a property investment. I uploaded the, the, you know, the tenants', um, uh, you know, uh, revenues and what the building looks like and what the returns are.

Then I start projecting forward and said, "Okay, give me, you know, a, at, at 5% a year rental growth, at 3% a year rental growth, at 10." And I'm not even like...

You know, back in the days, doing a spreadsheet around this would take forever. Now you just, like, you ask it to do the projections, do the curves, look at the net present value. I mean, it's great. It speeds up.

I don't need to hire a team of analysts. I can just, like, do the stuff myself. So I think it's gonna, it's gonna make people who know what they're doing a lot more, um, efficient. Yeah. That's super cool.

Uh, uh, thanks, Vinnie. Um, we're almost at the end of the show. Um, and thanks for that brief insight into digital identity and everything else you're doing.

Um, just to end the show, a quick lightning round with very short questions and very brief answers. Um, and the first one is, um, [lips smack] what's the first app you open in the morning?

Um, usually my WHOOP, uh, or my, my WHOOP app, uh, to check how I slept the night before. So I, I wear this, like, WHOOP monitor.

Uh, it tells me my, you know, my HRV, my, uh, heart rate, 'cause that sets the mood for the day for me, right?

If I had a good night's sleep and it's telling me like, "Yeah, I'm refreshed," like, okay, maybe I'll jump on the treadmill and go do, you know, an hour.

If it says, "You didn't sleep that well," okay, maybe I should save myself for the gym.

So, uh, my WHOOP app is-- a- and I have Eight Sleep as well, so just depending which, you know, one of the two I'll, I'll open up, um, and, and, and check.

I think the WHOOP seems to be more accurate for me just 'cause it's, it's on my body versus, um, I'm lying on the Eight Sleep. Mm-hmm. Mm-hmm. Um, okay. Second one, if you could tokenize anything, what would it be?

If I could tokenize anything, um- You know, I, I think that, uh, the, I mean, the, the, the guys doing the idea that I, I really like, uh, already, it's, it's, uh, watches.

I think, um, being able to tokenize watches and make them tradable is really interesting. [notification sound] The Cubby doing it, uh, I like what they're doing.

Uh, but they also, I think, uh, I invested in Baxus recently, and they're doing, uh, they're tokenizing, uh, um, whiskey and, and hopefully eventually wine, because I'm a big wine drinker.

So yeah, I like, I like, I like collectibles and consumables, or at least stuff that ages, uh, well. Mm-hmm. Mm-hmm.

Uh, if you had an audience of a couple of thousand people, uh, that you can talk to and you need to tell them the biggest misconception about blockchain and why they should pay attention, what would you tell them?

Well, I, I think the biggest misconception is that, um, uh, you know, is that it's, it's, it's always gonna be going up forever.

[laughs] I, I think, like, you know, uh, uh, my, my advice would be, look, you have to have exposure to the sector, and if you're really in it deep, you can maybe pick a winner here and there, but there are so many players in this game right now, it's very, very hard to pick winners.

I mean, you know, uh, and I, I think the, the, the, look, it's not, it's not all a scam, but it's not all sort of altruistic either. It's a mix.

And so you have, uh, there's good and bad of every coin, whether it's Bitcoin, Ethereum, Solana, there's goods and bad. So you have to figure out what's important to you.

Uh, and, and, and I try and do value-based investing. I try and invest in projects that have similar values to what I have. That's great. Uh, thanks Vinnie again for coming on the show.

Where can people find you and more about Civic, uh, more about, uh, Rumi AI? Uh, Rumi AI is easy.

It's just rumi.ai, and if you wanna find more about me or just hang out and chat to me, uh, come on, uh, Twitter or X rather, and it's @vinnielingham, and then Civic Key, Civic is just @civickey.

Um, we couldn't get Civic, so we used Civic Key, uh, [laughs] as a handle. But that's it. Like, I'm just, uh, I'm on Twitter a lot, so, um, I'll see you all there, and thanks for listening.

And thanks for having me, Marc. Yeah, thanks for coming on the show, Vinnie. It was a pleasure, and thanks for tuning in. If you like this, please repost, please share. Um, that helps us to keep this going.

And Vinnie, thanks a lot. Uh, talk soon, and all the best. [outro jingle] Talk soon. Thank you. Thanks, man.

[on-hold music]