This came out last summer and I've heard Vinay talk about it in these terms since, but this is a good summary, all in one place.
Identity on the blockchain is an issue, because, as we've known for some time, "on the internet, nobody knows you're a dog". E-commerce gave those dogs credit cards, the blockchain lets dogs build world-altering digital infrastructure. So maybe it would be a good idea to actually know that the people (or dogs) you're dealing with are who they say they are.
Turns out this isn't simple, people (and you can hear this in the comments towards the end) have been trying to work on a complete solution for many many years. But Vinay suggests that instead of trying to "stamp a number on the engine block" of every human being, we apply an insurance model - accept that identity is a probability function (I'm 99.99% sure that all the people voting for this post this aren't dogs) and know that that's either good enough or I can take out insurance to mitigate any possible losses incurred by me if the 0.01% chance that Millie the wonder Mutt went on an upvoting spree with someone's steem account. OK, so that doesn't work so well... there's no actual downside to letting your dog vote for you... but if we were dealing with a more sophisticated smart contract, you can see that there might be cases where knowing that the other parties to the contract are who they say they are and aren't either fictitious dogs that I just made up, or evil oligarch scammers or some other bad actor.
Anyway, dogs aside (there are no dogs in the video, that's just my way of understanding it), have a listen, it's good stuff and it contains other building blocks for a good understanding of how the blockchain might be used to build sustainable infrastructure for trade without having to worry too much about who's who.
We'll be talking more about this at the third Internet of Agreements Conference on April 10th in London.
