Humanity Protocol Raises $30 Million as Blockchain-Based Digital ID Startup Hits Unicorn Status

Humanity Protocol, a decentralised identity solution, has raised $30 million (roughly Rs. 250 crore) from a fresh funding round led by Kingsway Capital and the startup has hit unicorn status with its valuation surpassing the $1 billion (roughly Rs. 8,350 crore) mark. Over 20 other venture capital firms participated in the seed funding round, including Animoca Brands, Blockchain.com, Hashed, and Shima Capital. The startup competes with Worldcoin, a rival service that has faced legal challenges in several regions.

Decentralised identity solutions (DIDs) aim to authenticate users and entities without a central authority. In order to record the uniqueness of each individual, Humanity Protocol collects the palm scans of individuals. These scans are stored on a blockchain, and a proof-of-humanity is issued that verifies that the holder of this identity is genuinely a human and not a bot.

“Proof-of-Personhood is a powerful concept but the solutions that exist today haven't seen adoption because onboarding is invasive and high friction,” Terence Kwok, Founder of Humanity Protocol wrote in a blog post. “The world needs a truly self-sovereign identity framework that is built on first principles of inclusivity, privacy, and decentralisation.”

Humanity Protocol's Proof of Humanity (PoH) consensus mechanism aims to mitigate the risks of identity frauds and Sybil attacks. This brings a layer of trust and credibility on human individuals within decentralised networks in the real world.

Explaining why the proof-of-personhood is a promising concept, Kwok's Medium post said, “The PoH allows users to perform various transactions, such as asserting their ownership of real-world assets, accessing restricted services, or proving their education and employment history, without having to disclose their personal information to third parties.”

The blockchain ID project also claims that deploying PoH could make activities like the distribution of Universal Basic Income more equitable because these transactions are linked to real human beings.

In recent times, however, these controversial decentralised identity projects have garnered criticism and concerns from several governments from around the world.

One similar such project is Worldcoin founded by OpenAI CEO Sam Altman. Using the scans of people's irises, Altman plans to generate a unique global identification of individuals, that would eliminate the need for them to present their IDs like names or email ids to interact with computers and machines while also ensuring that the holder of this ID is genuinely human. The project has been perceived as intrusive and is currently facing legal hurdles in countries like Nairobi and Italy.