Humaniq

Abstract

The Humaniq team is building a next generation model for financial services (Banking 4.0) which is based on Blockchain technology, mobile devices and biometric identification systems. We will use cryptofinancing (Initial Coin Offering) for growth capital rather than traditional venture capital and shareholders.

Our aim is to empower a market of 2 billion people who currently don’t have access to banking across the world. Almost half the world — over three billion people — live on less than $2.50 a day. At least 80% of humanity lives on less than $10 a day. More than 80 percent of the world’s population lives in countries where income differentials are widening.

We believe Humaniq can help reverse these trends and help bring people out of poverty by giving them banking tools that can provide liquidity for entrepreneurial ventures via loans, investment, online work and cryptofinancing as well as create new opportunities in the digital economy, locally, nationally and internationally. Humaniq can also help mitigate the refugee crises occurring in many countries in the West due to economic disparity and lack of opportunities in emerging economies.

Our unique selling proposition (USP) in the digital banking market is our use of Blockchain technology combined with biometrics and a focus on mobile technology. We plan to not only provide a software solution but also bring mobile hardware (phones) into the markets we are aiming for in Africa, Asia and South America.

Mission

You may notice: there are unbanked regions on Earth. As a matter of fact, nearly 2.5 billion people live in regions where no banking infrastructure exist. The only form of payment available in those regions is manually giving banknotes (and/or coins) to a counterparty. What makes it worse, even in banked regions, there are millions of people without passports or any other forms of identity or documentation, thus they are cut off from modern banking facilities. According to a recent World Bank estimate, the total number of people who did not have identification documents amounted to 1.5 billion by 2016. We at Humaniq, will provide a new financial infrastructure for everyone who has a smartphone with a camera. The smartphone is necessary to make and receive payments, and the camera is needed to earn the first coins. The price of smartphones is falling every year and they are currently priced at between $10-$20 on the low end.

What makes Humaniq special?

It is natural to ask why the problem of banking for the unbanked cannot be solved by Bitcoin or any other cryptocurrency. And the questions can also be asked: «What makes Humaniq special?», «Are you just another startup offering yet another mobile wallet app?

At first glance, it looks like any Bitcoin mobile wallet could be used in unbanked regions. But if you think deeper about this, you will discover the following issues:

✘ The problem: the number of satoshis in circulation (or any other small units of crypto) is insufficient for some regions. E.g., in Indonesia (250 million people), there’s just not enough digital currency to have substantial daily turnover (volume). Bitcoin is scarce, and if you don’t have bitcoins, you are inclined not so to be interested in the network. For regions poorly integrated into the international financial system, it would take a lot of time for sufficient liquidity to appear in the local market. But there’s no doubt that such regions have their own domestic economy today. It’s just they are almost exclusively cashbased.

✔ Our solution: unlike other cryptocurrencies, Humaniq provides an egalitarian emission mechanism. The amount of coins that one person can mint is limited, and this is what makes Humaniq so special. This mechanism has nothing to do with competing in specialized hardware, having access to specialized hardware, wasting electricity, or owning the coins preliminarily. It may be called proof-of-face, and nothing is more fair than that.

✘ The problem: the lack of local exchanges. Even now in 2017, there are lots of countries where no infrastructure to buy or sell cryptocurrency exists. This is the issue even for some European countries, which have no problems with Internet adoption and where virtually the entire population is using smartphones. We’d like to stress that it has been more than 8 years since the first cryptocurrency launched, and more than 7 years since the first cryptocurrency exchange ever appeared.

✔ Our solution: since our platform provides infrastructure for people to earn Humaniq coins from home, we understand that people would eventually like to exchange cryptocurrency for local currency. Of course, we provide such infrastructure in our app. (And still, we are in talks with some national and international shopping franchises in various countries we are targeting — and engaging them to add Humaniq as a payment option.)

✘ The problem: some states are concerned with pseudo-anonymity of cryptocurrencies, which causes recurring legal issues associated with them.

✔ Our solution: since app users have to pass bio-identification, there is no anonymity in Humaniq. That is good news for transparency advocates, and that makes Humaniq unviable for financing terrorism, trading drugs and all the other deadly sins Bitcoin is accused of. Another point is, Humaniq provides the ability to earn while working from countries abroad. This enables an export-driven economy in depressed regions, improves living standards of depressed regions, and reduces the impetus for migration, which is great for all governments both in developed and in developing countries.

✘ The problem: the network effect of Bitcoin (and other cryptocurrencies) is relatively small because of relative usage complexity. According to the report from Juniper Research, the number of active Bitcoin users around the world could reach 4.7 million people by the end of 2019. Even now the network has reached the capacity limit of 250 thousand transactions. Eight years of the Bitcoin era have passed; compared to PayPal, after 8 years it had 100 million active accounts, despite the fact that it appeared with less developed online infrastructure and can require passport details for use.

✔ Our solution: we discarded the private and public key approach, which confuses newcomers; we also had to reject using fractional amounts of coins, since decimal fractions may be uneasy for people with little or no education. It’s very simple. Coins are whole numbers (integers), faces are used as passwords — if you think it gets any easier than that, please tell us what could be simpler.

✘ The problem: complexity of reputation accounting in anonymous communities, needed for various p2p-solutions (p2p-insurance, p2pbanking).

✔ Our solution: we handle this problem with our bio-identification procedure. By the beginning of 2017, elegant solutions for biometric authentication already exist. If we take a combination of authentication

✘ The problem: the lack of crypto evangelists in undeveloped regions, which contributes to people’s unawareness of innovative payment systems.

✔ Our solution: the reasons why people don’t promote cryptocurrencies in undeveloped regions are understandable: technical complexity of the subject, language difficulties, no financial incentive etc. But we’ve targeted our project directly at such regions. Working on the problem, we have studied nearly everything about the current state of developing countries. We talked to ∼100 prominent bitcoiners who live in developing countries such as Sierra Leone, Afghanistan, Botswana, Pakistan and Indonesia. Dozens of them decided to enter our Humaniq Ambassador Program: they will teach people about how to use Humaniq and earn cryptocurrency for that.

This is why Bitcoin or any other crypto isn’t used in unbanked regions. And won’t be used. The currency of unbanked regions (the dark ones on Figure 1) is called Humaniq.

Vision

In Humaniq, the amount of coins that one person can mint is limited, and that is what makes Humaniq truly special.

This may sound really strange for an experienced crypto-community member. How did we achieve this?

We did it with the help of bio-identification. Our bio-identification has to be passed only once, taking less than 20 seconds and does not require to have any e-mail or passport. And modern face recognition algorithms for neural networks can check one’s identity with incredible accuracy Briefly, bio-identification is obligatory to create a wallet; every user is given coins for passing bio-identification; the process consists of taking series of photos, recording videos of the user making facial gestures, and recording the user’s speech. For details, move to subsection 9.3.

To prevent theft of coins, every time a user signs in into the app, he or she must pass the authentication procedure. The authentication is similar to bio-identification, but much shorter: the user has to repeat just one of the recorded gestures in the front of the camera. It is as easy as unlocking a smartphone.

The software we have developed works with the cheapest hardware solutions on Android 5.0: with smartphones that cost $10-$15. Such affordable devices are usually fitted with a front-facing camera and microphone, and thus are sufficient to install a mobile wallet and to authenticate the user. After passing the bio-identification, everyone is invited to earn additional coins by inviting friends and making transactions. Moreover, we enable the possibility for everyone to earn a living with their mobile phones, and that’s what is truly impressive.

You may ask — how? Well, we work with local companies and brands to achieve this. Our cherished will is to make Humaniq the de facto currency of the world where over three billion people live on less than $2.50 a day. Humaniq can give these people the opportunity to break free from poverty, improving the lives of their families and themselves by entering and helping create a new mobile digital economy. Imagine now... over two billion users improving capitalization of popular services by getting used to them — isn’t that what brands dream of? Isn’t that why Facebook is making a play with internet.org?

Our user may purchase a smartphone perhaps even with a loan — and after the purchase, cover his or her expenses within several weeks, by executing simple actions.

We feel honored to repeat it once more: Humaniq provides an egalitarian emission mechanism. The amount of coins that one person can mint is limited, and that is what makes Humaniq so special.

This mechanism has nothing to do with competing in specialized hardware, having access to specialized hardware, wasting electricity, or owning the coins preliminarily. It may be called proof-of-face, as we’ve mentioned, and there’s nothing more fair than that.

In this section, we are about to present the details of the emission model we chose. Developing it, we pursued the following objectives:
1) The early adopters should receive more money than the later ones.
2) The total amount of coins that will ever be issued must be five times
bigger than the amount of coins issued via Pre-ICO + ICO.
3) Emission proceeds until kmax people are registered. kmax should be relatively big.
4) In average, one user is granted with 500 coins.
5) Tokens are issued by the smart contract upon request.
6) Emission per one person is carried out not by one-time payment2
, but in accordance with a scoring function which depends on the person’s activity: passing through bio-identification, inviting friends, making transactions.

Let E(k) be the amount of HMQ coins that may be granted to the person who was k-th to pass the bioidentification in the Humaniq app (the user number k). The objective number 1 tells that the function E(k) should be decreasing one. We chose the simplest decreasing function — the linear one:

10 Conclusions
The Humaniq project was launched to create a financial infrastructure for people who were previously isolated from it. We are using the most advanced and mass technologies: the blockchain with the possibility to connect thirdparty projects, a mobile application, along with bio-identification. Humaniq will also add to the science of cryptoeconomics, the well-being of developing countries, and can even benefit the European economy.

For cryptoeconomy:
• expanding the amount of cryptoeconomy users will result in a positive development in this industry
• original inherently friendly and open source architecture of Banking

4.0 will help start-ups to get instant access to customers around the world and obtain financial support from the Humaniq project

• bio-identification will allow testing reputation systems and personalized interaction programs, introducing this realm to charitable organisations, NGOs and United Nation services.

For developing countries:
• poverty level reduction
• remote work and economic growth: greater opportunities for savings will increase the lending capacity of the population; collection of customer financial data will reduce lending risks
• innovation and infrastructure: electronic finances will allow the creation of new business models and products
• reduction in class inequality: financial services can provide new opportunities for billions people living on less than $2.50 a day and bring them to the middle class, greatly improving their lives

• establishing gender equality: engaging the female population in the electronic finance system will raise incomes of health care and education systems; a barrier for women in financial account registration will dissolve, and women will have more control over their funds and business

• improving the quality of education through remote access and payment capabilities.
For the EU: • improving the economic situation in third world countries will reduce the current immigration challenges faced by advanced economies, particularly in the European Union where the influx is creating huge strains on the social welfare systems and high costs associated with the problem.

Humaniq is not welfare or charity, we are more about empowering people to change their lives and pull themselves out of economic disparity by participating in a new digital economy that they can help build.