• The internet has a problem. On the one hand, we have the ‘Western internet’ where everyone can do as they like, where you can be anonymous and say/do whatever you want, but where reputation and online trust is difficult. As the famous saying goes: “on the internet, nobody knows that you are a dog”. On the other hand, we have the ‘Chinese internet’, where every action you do is recorded and contributes positively or negatively to your reputation. However, privacy is non-existent. None of these two internets is ideal, which is why we are working on a solution to make anonymity reputable and accountable.

    However, for most of us, the ‘Western internet’ is known, while the ‘Chinese internet’ is less known. Especially their social credit scoring system that enables (online) reputation in China might be relatively unknown. This Sesame Credit scoring system is rapidly changing China and how Chinese citizens interact with each other. Let’s have a look what Sesame Credit is and what the effects are:

    Sesame Credit’s Impact on Society and Privacy

    The ability to provide product and service offerings to customers online requires businesses to assess risk. This risk assessment becomes difficult when a reliable online reputation system is practically non-existent. This was the issue that China’s emerging credit reporting and scoring industry faced. However, with the help of large private organisations such as Ant Financial, Alibaba’s payment affiliate, they developed Sesame Credit. This social scoring system stands to drastically affect society and invade the daily lives of Chinese citizens in a variety of ways.

    Alibaba was one of the eight approved technology companies by China’s central bank in 2014 to develop online and e-commerce rating systems based on social trust. Ant Financial developed and integrated Sesame Credit into Alipay and assigned social credit scores to Alipay users who have agreed to use the credit-scoring service. Sesame Credit can leverage Alibaba’s robust database in conjunction with other factors, such as online transactional history, tax payment history and traffic infraction history, to determine an individual’s trustworthiness.

    As such, Sesame credit is becoming a nation-wide credit rating system that incorporates social scoring. It is a reputation system unlike anything before. It calculates credit scores based on online shopping habits. For example, an individual who buys diapers may have higher scores than a person who spends money on entertainment, since the diaper transactions would be perceived as being more responsible.

    Sesame Credit will impact society as the use of the credit scoring and reporting is incorporated into the everyday life of the Chinese. The program will help China push its development of a nation-wide social credit system. However, it also comes with concerns regarding privacy and transparency of information.

    Privacy Concerns

    Many individuals were not aware that Sesame Credit rated them when the service initially began. This caused concern, especially because the system lacked 100 percent accuracy. Although China will, of course, use artificial intelligence to improve the system, using the massive amounts of data gathered through the system. Sesame Credit uses big data analytics to assign a social score based not only on a person’s dealings with businesses but also on how they interact socially online and offline. This will affect consumers by providing them with access to preferential treatment, such as skipping long lines at the hospital, and access to loans.

    However, the Chinese government is not stopping there. Recently, they announced that all cars would be required to have an RFID chip, that can monitor the exact movements of the car. Although the government states it will be just to combat congestion, it will likely be used to increase surveillance. Add to that the 170 million CCTV cameras already in place, many of which are smart cameras, as well as the rapid developments in facial recognition; it is quite likely that increasingly offline actions of Chinese citizens will also contribute, positively or negatively, to their social credit score.

    Since the social credit score is a centralised system, controlled by the government, it gives the government tremendous power, rewarding citizens that do well (according to the Chinese government) and punishing them for breaking social trust, such as denial of public office consideration and loss of welfare and social security. The goal is to enhance market economy regulation and penalise people and businesses for poor practices, such as selling toxic food or engaging in bribes. The Chinese government aims to fully implement these measures by 2020.

    Online reputation and privacy

    Although Sesame Credit could resolve several issues that we face with the ‘Western internet’, such as online bullying, online threats and illegal activities such as selling drugs online, it is also a massive violation of privacy. In addition, since the system is controlled by the state, they could easily punish citizens by reducing their score, preventing the person from obtaining a loan or even travel by train of an aeroplane, since increasingly all kinds of services will connect to the social credit system. Therefore, while Sesame Credit enhances the validity of the social trust credit scoring system with improved verification and increased transparency, it is also a very scary system that gives the government total control over their citizens.

    Self-Sovereign Reputation

    Therefore, the Chinese solution to online reputation, is not the solution to the problems of the ‘Western internet’, as we value our privacy. A system that would combine the best practices of the ‘Western Internet’ and China’s solution, however, could benefit all. We see this as a system where one’s actions online are accountable, but where the user remains in control over who sees what; where you can remain anonymous, but still build a reputation and where you can create trust, without knowing the other person, organisation or device. Such a system, not a self-sovereign identity but a self-sovereign reputation, could make the internet more trustworthy and enable global online collaboration and it is exactly what we are building. If you wish to learn more about our solution, feel free to ping me or let me know in the comments below your thoughts on online reputation.

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