In September of 2023, a data breach bedeviled MGM Resorts, one of the largest international hospitality and entertainment companies, resulting in the exposure of thousands of customers’ personal data. The cyberattack cost the casino giant over $100 million.
Cybersecurity issues are unfortunately not a one-and-done phenomenon that plagues only big businesses. According to TechJury, 43% of all cyber-attacks are aimed at small businesses. Protecting personal data has never been more pertinent, and that’s why estimates predict that the cybersecurity market will reach $300 billion by 2024. It’s also a significant and growing expense for many companies.
That’s why Javier Cocero, an MBA student at Duke’s Fuqua School, has created a decentralized approach using Web3 technologies and AI to make identity verification more reliable, accessible and less expensive. With his startup Anon ID, the need for centralized third parties for verification is removed and users can start to feel like they own and control their data.
Cocero’s disruptive approach to identity verification based on a person’s face is what got him and Anon ID into the 2023-2024 cohort of Duke’s year-long Melissa & Doug Entrepreneurs Accelerator. [We’ve previously written about fellow cohort members: Alleviate Health, Hayha Bots, SaveOr, College To Climate, Aurganics, Infinity Portal and Himayat.]
Anon ID’s demo is currently live; you can check it out here. The Duke Web3 Conference on March 22-23 will also allow attendees to use Anon ID’s Web3 Face Vector ID for access to the conference. See more info on that here.
Anon ID is a multi-faceted platform that places data control into the hands of the users themselves. Its peer-to-peer network approach removes the “middle man” that companies use to approve and store customer data.
So instead of having to go to a centralized provider to prove an ID is real—which can take longer and be expensive—Anon ID will scan the ID, verify its legitimacy and, because of its decentralized nature, will not store any of the personal data on their or any company’s database.
By automatically validating the ID, the platform stores only a proof of its validation. So whenever a user needs to access something, Anon ID will compare the user’s face using AI to the picture that’s on file, and can prove that not only are they the owner of the account, but that they’re also a legitimate U.S. citizen, through Know Your Customer (KYC) guidelines, which require professionals to verify the identity, suitability and risks involved with the users.
The startup’s device-based authentication allows users to authenticate themselves without private data, while businesses can avoid private data liabilities and prevent bad actors without introducing friction.
“When you create the data, your face will be given a code and once your face matches that code, it’ll point to your face on file,” Cocero explained. “There’s no server that anyone can hack, unless they try to hack the entire internet, and that is part of this notion of decentralized technologies such as those that protect Bitcoin. The notion is to be transparent, open-source, not necessarily controlled by a company or organization.”
Cocero said that the idea for Anon ID came to him when he and a friend wanted to create a “casino-esque” video game that allowed users to sell their assets like virtual currencies or in-game items. But due to anti money laundering laws (AML), intense authentication is required and that can be expensive and tedious to manage.
Casinos are most targeted in this situation, as they have to store user data for AML laws and find themselves at a crossroads where the more compliant they have to become, the more friction they introduce to users and the more private data they need to pay to protect. According to Cocero, billions of dollars a year are lost due to privacy data fines and password or verification issues.
“I want to be kept private and don’t want to give my data to anyone, but I also want to access the game,” Cocero said. “There’s this balancing act that companies have to have this compliance, especially in casinos and banking industries, but you don’t want to introduce too much user friction, because then your users won’t use it.”
In order to truly keep users’ data in the hands of the users, what makes Anon ID’s decentralized network unique is their peer-to-peer authentication approach. Once they have enough onboarded, verified users, they intend to have humans identify other humans, similarly to an image-based CAPTCHA test.
“This approach makes it so that when other companies onboard their users, they don’t have to store private data and worry about getting hacked,” Cocero said. “If any stolen record involves a money transaction and that data is compromised, that company is [liable] for up to $30,000 per user and if you have a million users, your company is going bankrupt real quick.”
Anon ID’s B2B implementation targets businesses that store high amounts of personal data, especially casinos. By being able to automate the ID verification process, casinos can spend less money on centralized third parties and create faster access for first-time and returning users. Cocero also said it has the potential to counter cybersecurity attacks, as it’s harder for hackers to access information from just a photo of someone’s face.
