Anonybit’s big gambit: disrupt the old world of biometric authentication

The Situation: A gambit is a clever, often risky action a game player takes to achieve an advantage. Well, that’s exactly what Anonybit is doing. It is taking a calculated risk to disrupt the world of biometrics still stuck in an old paradigm of tradeoffs and replete with centralized databases prone to hacks or device-based security approaches attackers can easily circumvent.

Anonybit was founded in 2018 by Frances Zelazny, a biometrics industry veteran passionate about identification. It is a US-based startup with a subsidiary in Israel that wants to make personal data unhackable and ensure strong authentication without maintaining a central point of attack or failure. Anonybit has already raised $5 million from venture capital and strategic investors, including Switch Ventures, NextGen Venture Partners, and Target Global.

Anonybit’s unique approach to solving existing identity management issues is disruptive and has the potential to change the way enterprises across all industries balance privacy and security going forward. Here is what makes Anonybit special.

Anonybit’s vision is doubtless ambitious and audacious—it gives hackers nothing to find and nothing to steal

Anonybit’s vision is ambitious and audacious: Enable a world with no data breaches because there is nothing for a hacker to find or steal. A world where we can conduct transactions online safely because the people we do business with know who we are. A world in which we as consumers trust the custodians of our data to safeguard it and use it for its intended purpose.

In the traditional approach, all biometric data must be matched in the verification phase with the template stored in a database. Anonybit takes a different approach by splitting biometric information into anonymized bits (hence the name of the company) and storing it in a peer-to-peer node network. The anonymized bits reside in the Anonybit network, developed with Kubernetes, and are never retrieved or recompiled, even for matching. Anonybit executes all matching functions as distributed, eliminating the risk of a data breach while ensuring strong authentication.

It is worth noting that Anonybit extends the concept of securing biometrics to non-biometric data through its decentralized data vault which can store and manage images, PII data and any other sensitive information that would otherwise also sit in a database.

Decentralization is the critical element for digital security and consumer privacy

Storing biometric data in a central database is subject to breach, and device-based security approaches are easily circumvented, but Anonybit’s decentralized node approach is an effective defense.

Leveraging multi-party computing (MPC) and zero-knowledge proof (ZKP) principles, Anonybit launched a cloud-agnostic and patent-pending breakthrough infrastructure that supports key use cases in the realm of identity management: decentralized biometrics storage and matching; zero-knowledge, passwordless authentication; and digital asset storage and retrieval.

Anonybit’s patented infrastructure underpins three main product offerings, as described in Exhibit 1:

• decentralized identity cloud for embedded partners to apply their algorithms and deliver privacy-by-design solutions to the market;
• a turnkey decentralized authentication including liveness detection, biometric matching, decentralized storage, and integration into orchestration systems; and
• a digital asset vault for private keys, backup passphrases, etc., with biometric authentication to ensure only the right person has access, an ideal product for blockchain applications.

Exhibit 1: Overview of the infrastructure underpinning Anonybit’s product offering

Source: HFS Research, 2022

Addressing the big-ticket issue—secure digital assets and their future applications with privacy-preserving biometrics

As digital assets expand beyond their current use cases, most promisingly as a form of a digital credential, the ability to securely verify their origin and authenticity becomes imperative. As an example, beyond art, non-fungible token (NFT) applications are gaining popularity in music, gaming, sports, entertainment, and representing physical documents such as tickets, certificates, and contracts.

It’s time to marry these digital assets with a decentralized authentication infrastructure, and this is where Anonybit can unleash its full potential. Decentralized authentication of digital assets clearly aligns with both decentralized finance (DeFi) and Web3 goals. Decentralized authentication could seal any gaps in digital asset security and management because identities must be validated against their real-world identity in every transaction. Digital assets need a chain of custody, and Anonybit can help enable and govern the process.

The Bottom Line: Anonybit has achieved a major technology breakthrough, but it must double down on its effort to accelerate the growth of a rich and diverse partner ecosystem

Anonybit is getting closer to disrupting the identity and authentication market with a breakthrough, privacy-preserving infrastructure that protects personal data and ensures digital security. The company has shown its commitment to enabling a privacy-by-design framework for the entire identity ecosystem. But to turn commitment into actions, Anonybit must double down on its effort to accelerate the growth of a rich and diverse partner ecosystem. With exciting and promising use cases in the banking and financial services sector, we expect more enterprise leaders across all industries to explore the vast opportunities Anonybit has to offer.