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Comment by JumpCrisscross | Hacker News Reader

> Were a blockchain used to replace this industry

How would this work? Make everyone's personal credit details public?

Maybe we could encrypt each credit update with the person's Social Security Number? That way, it would at least approximate the current level of security.

This would be much easier if we could replace the current Social Security Number system with a public/private Social Security Number key system. But alas, that would require much regulatory change.

You're going to encrypt publicly accessible sensitive data with a 9 digit number ? This is not even close to the current level of security. You don't get to make millions of guesses when some dumb website or clerk requires your SSN to do something.

To decrypt data you get to guess over and over again. An SSN would be a terrible key for that.

Combine with zero-knowledge proofs. A bank can inquire whether the party that has given it a scoped token meets Criteria X, Y, and Z. The bank gets back a yes or no.

While Bitcoin and Bitcoin-like blockchains use no encryption, others like zcash do. It's possible to hide secrets in a blockchain using encryption and selectively confirm narrow assertions without compromising privacy.

So each credit interaction would be stored, encrypted, on the blockchain? And then to check my credit an agent would request all those blobs? What prevents me from just handing over the blobs I haven't defaulted on?

You'd need a blob that links a "me" blob to all those interaction blobs, and an authentication mechanism that links meatspace me to the "me" blob. People will lose their private keys, so you need a trusted party comparing the meat and blob "me". This ends us up at the same place we started, with extra steps and a structurally-ensconced middleman.

For the sake of brevity I'm ignoring that a blockchain kicks dispute resolution to an oligopoly of miners.

Much as Bitcoin addresses the double-spending problem to ensure that a single output isn't spent twice, a "credit interaction" would be added to the ledger as a continuation of an existing history (or a new one). The zero-knowledge proof would assert various attributes of that history.

At one point or another, the history could be associated with a specific human. Or not; depending on the goal of the design, a single credit history might pertain to one person, multiple people, or a business association. A single person might have multiple histories -- though longer-lived and more active ones would be more valuable, which reduces the viability of a Sybil attack.

Loss of private keys is a problem if users are their sole maintainers. A credit union would surely be willing to safely store a key for a 2-of-3 transaction that empowers it to manage a customer's history.

Distributed ledgers absolutely do not need miners, especially if level of trust is a variable aspect of the design.

By the way, your initial question could have been interpreted as a request to engage in a brainstorming discussion to produce a blockchain-based public record that preserves privacy. If so, you should know that your subsequent response is inconsistent with that sentiment, though I'm giving you the benefit of the doubt by continuing in the spirit of additive discussion. If you're not interested in brainstorming, then please state your intentions so we don't waste time talking past each other.

Check out Cred - https://crednetwork.org

yes, though it could be pseudo-anonymous like bitcoin. you could have each side of a transaction rate the transaction, and use a page-rank algorithm to create ratings.

Tied to some form of secret ID.

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