In the future as we achieve more of our decentralization goals, options may exist wherein KYC will not be required. For example, if users send direct, on-chain, P2P tips/contributions to publishers, then these transfers will not require KYC as there will be no intermediary infrastructure (apart from the blockchain itself).
In our case, KYC is required at the moment in order to comply with financial laws and regulations as value passes through Uphold’s custodial wallet infrastructure.
Some background: Right now, publishers withdraw into a linked Uphold account (a custodial wallet provided by Uphold). Accordingly, as clients of Uphold who make use of Uphold’s custodial wallet services, they must KYC with Uphold, as Uphold is subject to various financial laws and regulations (e.g., AML).
“But what if I don’t depend on Uphold’s infrastructure as a publisher?”
The reason why KYC is still required even if publishers bring their own wallets (“BYOW”) is that value continues to pass through Uphold’s infrastructure, even if not at the publisher’s end. In this case, the publisher is not a direct client of Uphold so they need not KYC with Uphold itself (and can use another vendor such as CIVIC). But because value continues to pass through Uphold’s infrastructure at some point in the process, the general KYC requirement still needs to be met.
“But where in the process is there Uphold infrastructure if the publisher is no longer using Uphold’s custodial wallet services?” Answer: Recall that users are still using an Uphold custodial wallet: namely, the one provided in the Brave browser!
The only way to circumvent KYC is for the transfer to never touch Uphold’s infrastructure: i.e., to be a purely P2P transfer from the user to the publisher. Such options may exist after we introduce the Ethereum Wallet feature into Brave, allowing users to manage their own on-chain (rather than custodial) Ethereum addresses/accounts.
The reason why pure P2P options are not currently viable is that most mainstream users and publishers do not know how—or do not want to—manage their own on-chain wallets. Indeed, this is a blockchain adoption problem, not an issue specific to Brave.
However, as blockchain usage, education and adoption becomes more mainstream, you can expect such features to become available. For now, a good way to understand what Brave is doing is to view Brave as offering an easy on-ramp for mainstream, non-crypto savvy users & publishers. This increases adoption and accessibility of what’s fundamentally blockchain technology, but one of the side-effects of abstracting away the nitty gritty details of blockchain for the end-user/publisher is the KYC requirement.
Decentralization is one of Brave/BAT’s fundamental guiding principles. However, we will decentralize over time as the technology becomes available (e.g. scaling issues), and as blockchain adoption/education is at a point where it does not become a major obstacle or impediment to adoption.
Hope that helps and provides you with some assurance that the team has thought long and hard about these issues!
cc: @braveuser @agentofuser