Tencent veterans secure $13M to build cross-chain decentralized identities
There are many startups working on decentralized identities for the next generation of the internet. Four Tencent veterans want their offering .bit, an identity protocol built on the blockchain, to become the universal identification system in web3, like how emails and phone numbers became ubiquitous in Web 2.0, while giving users control over their own data rather than letting it reside in the platforms they use.
.bit-powered identities come in the form of its namesake domain name. This is how it works: pick a .bit alias, link it up with the addresses of your crypto or NFT wallets that .bit currently supports, and all the data and assets from those wallets will now sit under .bit's "data container" and be displayed on your .bit page.
Say you need to receive cryptocurrencies from someone. Instead of giving them your 35-character wallet address, you could give them something as simple as claire.bit.
The Ethereum Name Service (ENS) is probably the biggest player in the blockchain naming system space today with .eth increasingly seen in Twitter names. While .bit sees ENS as its rival, it doesn't bill itself as a domain service but rather as an identity solution provider.
Furthermore, Tim Yeoh, one of .bit's co-founders, said his company provides a "neutral" and "chain-agnostic" solution whereas .eth interacts with only Ethereum.
"In real life, your houses and financial assets are all tied to your unique ID number; .bit serves as the digital ID for all your assets in the web3 world," said the founder.
One year after its founding, .bit has registered more than 110,000 accounts with some 38,000 crypto addresses tied to them. The identity protocol now supports Polygon, Tron, Binance Smart Chain and Ethereum; it plans to add compatibility with Bitcoin, Dogecoin, Polkadot, Solana and more down the road. All in all, the protocol has integrated with nearly 100 wallets and dApps.
Its business model is simple: charging an annual subscription fee for the accounts, including the domain names and other identification services. The strategy won investor support as the company has closed a Series A funding round of $13 million led by CMB International, which is owned by the Chinese conglomerate China Merchants Group, HashKey Capital, known for its early investment in Ethereum, QingSong Fund, GSR Ventures, GGV Capital and crypto-focused investment firm SNZ.
The startup plans to spend the capital on expanding partnerships, developing its user community around the world and hiring -- though it wants to keep the team small and nimble.
The company's next ambition is to promote the use of .bit for decentralized autonomous organizations (DAOs), said Yeoh. Every member of the DAO gets assigned their .bit account and can use that piece of identity to vote on the organization's decisions.
The startup comprises a small team of 10 people spread across the U.S., China and Singapore, led by four co-founders who were colleagues at Tencent -- Tim Yoeh, Specer Shaw, Jeff Jin and Kyle Wright.
Its users already span some 180 countries, but Yeoh wants the company to reach more users in Africa and South America, where a large proportion of the population remains unbanked due to their lack of government documentation.
"A person who doesn't own an official ID can get a .bit account, skip the government and start using a range of apps," the founder suggested. "If a person makes a contribution to a DAO, that record can be reflected on their .bit profile. There's no need for certificates anymore."
Similar to .eth, .bit has been gradually gaining recognition among crypto adopters on some established internet platforms. On Jike, a social network favored by China's tech workers, venture capitalists and web3 enthusiasts, people are attaching the .bit suffix to their names even if they haven't actually registered an account with the platform.
"They are treating .bit as a form of social cachet," said Yeoh.