This whitepaper outlines a token-based platform that will allow users to connect with their friends and verify themselves across the web in a secure and pseudo-anonymous manner. People on the network will receive a tokenized income, which represents a quantified measure of their likelihood of existence. The aim of this network is to avoid having more nodes than real entities. This approach focuses on social network as bot resistance and not primary identification, due to the likelihood that this identification can be copied, replicated and invansive to repeatedly share. Many governmental authorities not only rely on primary identity, but also a proof social network. ie. Passport recovery in Canada involves having 2 other citizens vouch that you are indeed a real citizen of the country. It is relatively easy to hack a server and steal identification, but it's very hard to hack someone's life and steal all their friends. On top of this, it's also difficult to steal a password that you don't have stored on a server. The user will want to vouch for their friends as they can verify their identity and in turn will receive credibility for correctly verifying their identity. In this way a free market will be created, with the sole purpose of proving the unique existence of a person or bot. As far as possible, the platform should be able to identify an individual without requiring the person to reveal excessive information about themselves. Login protocols and age verification can be accomplished without necessarily leaking the exact age. This opens up an opportunity for an innovation in online identity, where a user's data can be proven without being shared, increasing both security and privacy. This type of identity system is referred to as Self-Sovereign-Identity. There are two main hurdles to creating a self-sovereign-identity. How can we quantify the credibility of an entity and how do we know that the data truly belongs to them? Credibility is defined as the probability that you are a real entity and that you are able to vouch for other entities you know are real, in a form of proof-of-relationships. Data is defined as anything you use to tell the world who you are.
The economy of credibility operates through financial gambles on another users' identity, creating a proof-of-trust in this person. Each user is required to gamble a percentage (or minimum amount) of their credibility on themselves. In this way, nodes will lose credibility when a majority of users are gambling against them.
This gamble will hold a financial reward if the majority of nodes agree with the users' bet, whether it's yes or no. In this way there will be financial incentive to both verify your friends, and find nodes who don't indicate future credibility. We refer to these users as nodes because each node may be a single entity of any type, such as a corporation, a group of people, or bot in the form of a smart contract. Although much of this platform is designed to reduce bots, I think it may be valuable to allow bots as long as they are properly identified as such. People may produce effective bots that are programmed to do positive things for the network, and as long as they are properly identified, they may be considered credible bots by the network. It's unclear what economic role bots would play, if they're allowed, since it's problematic to have them reinforcing particular users. Perhaps bots could be allowed, but only are allowed to vote "no" on other nodes. Remember Credibility doesn't necessarily indicate a degree of trustworthiness, but instead represents whether the network thinks you are who you say you are.
. Credibility payouts will be made every x blocks. Each round a node is required to gamble "yes" on themselves, which they will earn back if the majority of nodes agree that you are credible. A problem with this approach is that when a node achieves 100% "yes" votes, the supporters will not receive any profits, since there is no one voting "no" and subsequently paying the winners. A solution is required for this problem as there remains no incentive to vote "yes" on somebody that has nobody voting "no", since there are no losers in this market. It's a small problem however, because reinforcing a node which already has 100% "yes" majority, may not pay off immediately, but your securing a safe bet incase of future attacks. The economics of this indicate that controversial nodes will be more profitable. The biggest payout a node can gain is to win a market with 51% of votes. This maximizes the amount of Credibility earned, but is inherently more risky.
The use cases of this technology are broadly concerned with situations where you would like to prove your information without sharing it. If a user would like to prove that they have enough Ethereum, they can use this platform to prove they have enough, without explicitly showing their balance. Crypto currency is moving towards implementations of Zero-Knowledge-Proofs. This technology allows for the proof of information, without revealing this information. 
This picture shows the basic concept of recursive prediction/result sequence. This technology can be used to check for minors, without publicly stating what their exact age is. The obvious use cases of this platform would be to secure login protocols and to implement verification protocols that don't unnecessarily store private information on servers. Eventually the platform can be used to eliminate bots on other platforms and create a stable reference point for users to find out the addresses of their friends wallets. Ideally as browser technology changes and IPFS/Blockstack begins to reshape the internet, we hope that other blockchain companies will utilize ad-block and the new Dapp payment structures, to put browsing data in the hands of the user. The use case then is to streamline and add security to current verification processes and to give users monetary control over their private information.
Credibility and Data, which are not necessarily related but require one another. In this system credibility will be the profit margin between people gambling "yes" on the validity of your identity and the people gambling "no" on the validity of your identity. Your data will be everything you use to let the online world know who you are. Unline credibility, data can be bought and sold, but this data relies on the node being credible in the first place. In this way we would like to secure a network that reinforces credible nodes and then develop tools in which users can become autonomous and pseudo-anonymous over their online identity and financial operations.
PGP is a time-tested mechanism for exchanging encrypted messages and provides an efficient way to encrypt data and send messages.
There may be situations where a node is credible but is claiming anothers persons data to be their own. This type of conflict will be solved by creating a special type of gambling market, where either side is allowed to present evidence and communicate with users invited to arbitrate the dispute. A vote will take place in which each user commits a minimum amount of Credibility and/or Ether in support of one side or the other. The user that reaches consensus in this vote will be rewarded with the Credibility/Ether and the loser will be eliminated from the network. This is done so that no duplicates exist on the network. Names can be duplicates, but they must be referring to seperate people. Most identity disputes will actually be users who have lost the password/private-keys to their previous accounts and are therefore forced to create a duplicate node of their previous self and start a dispute against that old node. In this case the old node won't be able to present any evidence and will sacrifice his Credibility/Ether to the new node. All people vouching for the old node will be invited to the market to indicate whether they support the challenging node, or the challengee node. 
. Three outcomes can come from this. Either node 1 gets claim on data, node 2 gets claim on data, or neither has valid claim on the data which will subsequently erase the data from the network. This is a complex game theory problem that needs to be reviewed intensively.
The main problem with running an incentivized and decentralized service is the game theory problems that can open up. An obvious weakpoint is the ability for someone to create thousands of nodes and subsequently create a self-reinforcing ring of nodes that all verify eachother. This attack however, would cost a lot of money to start up and would rest on a very fragile foundation, since this credibility-network isn't diverse and can fall in a domino effect as the reinforcing nodes get discovered. Security against this attack would naturally be users who are looking for obvious collusion networks. As this platform grows so does the security, but so does the ambitions for cheating.
It will be vital for a new node on the network to sign up with a very credible node to avoid being gambled against by the network. The smart contracts could be coded, to allow for a multi-sig node that can do direct verification, such as encrypting drivers license numbers, proof of address or any of the typical centralized verification approaches. With token-incentivization, decentralization is an efficient way of delegating power and offers higher security, however, it is a difficult approach when the network is small. Crowdsourced economies work better when the crowd is large (ie. Wikipedia, Stack Exchange). For this reason it may be smart to have a pre-programmed centralized aspect that fades over time, as a way to transition into a fully decentralized identity platform.