Blockchain gets Personal
We’ve recently written about the potential of blockchain technology to help track and manage the sale of guns. Gun violence is, obviously, one of the greatest problems the United States must address going into 2020—but it is not the only problem best addressed using a blockchain. Personal data—your name, email address, browsing history, and more—is another source for concern. While we are inundated with more details of Facebook’s role in selling its users’ personal information, innovators are experimenting with ways in which we might create a future where the control of user data is returned to… wait for it... the user. Imagine that.
A Vulnerable Necessity
When you browse the internet, you open yourself up to a range of data-gathering possibilities. Navigate to a website and you can be sure that some of your information will be gathered. Leave your Facebook feed open and Facebook might be able to see where else you visit. Click an ad just about anywhere and that click becomes a piece of your preference information. Even if you use a “Private” browsing mode, your IP address still leaves a record of your activity across any site you visit.
Specific to Facebook, if you use it, you should gain a sense of what they’re learning about you. Consider, for instance, installing a tracker in your browser that shows you what they’re figuring out about you as you browse areas like your newsfeed. Among a myriad topics, here’s one just for reference on personality tracking they’re doing on me.
Separate from this, they predict my political affiliation (fairly accurately), my gender (even though i don’t specify it), my religion (also not personally specified), likelihood to purchase types of products and even how… credit card or not. You should understand the ‘digital exhaust’ you’re putting off and this is a good start.
All this information is hugely valuable to marketers and brands. By collecting, aggregating, and analyzing these data, they can organize like-minded users into groups by multiple variables. You may be categorized by your age, location, perceived political leaning, or even by whether you decided to click an ad or not. These variables of preference and behavior can help companies show you ads you’re more likely to click and ultimately generate revenue.
Getting ahold of user data, however, can be a complex and expensive undertaking. Most companies are able to produce their own by tracking visits and activities on websites they manage, but data sets that are representative of more groups need to be much larger. Large sets of user data, such as those gathered by Facebook, are highly sought after and expensive. User data is so valuable that selling it has helped Facebook double revenues between 2015 and 2017—from around $6 billion to $12 billion.
What About the User?
Established social and economic theory tells us that human beings are creatures governed by self-interest, so if social media giants are selling our data...what’s in it for us? Why doesn’t Facebook pay users a cut of what they sell their data for?
Mark Zuckerberg might argue that, since you agreed to share your personal data with Facebook per their terms of service (and data policy), they can do anything that does not blatantly infringe on those legal terms. Furthermore, since Facebook offers their service to users free of charge, Zuckerberg could bolster this stance by arguing that his company owns (or rents) and operates the servers which store and relay users’ data—all that storage does not come cheap.
The Third Party Conundrum
Though Facebook’s data sharing practices seem rational from a profit perspective, they lead to disquieting thoughts like “who else is collecting my data?” or “what if my data is hacked and decrypted?” Since you don’t actually own your data, you don’t know which companies have information, how they store it, or how they use it in practice. So if a company tracking your online activity is hacked or decides to loan out 87 million users’ data to developers (like Facebook did), an unknown amount of your personal information could be at risk...all without you knowing the specifics.
And every third party that collects your data is another potential entry point for people who might want to exploit your personal information to some nefarious end.
The Decentralized Solution
Moving beyond Facebook’s disappointing (if unsurprising) role in the Cambridge Analytica scandal, it’s clear that Internet users are in need of stronger security and greater transparency when it comes to their personal data. And there’s good news in two forms. The first positive development is that a blockchain system for user data could mean better security, and could even give users more control over what information they want to share. Secondly, there are already companies working on such a system.
If you’re still wrapping your head around the blockchain concept, just bear in mind it’s a record or ledger hosted across many different computers in order to maintain validity over the data it is tracking. Since the ledger is decentralized, it is nearly impossible to corrupt or access without proper credentials. For blockchain-based currencies like Bitcoin, this means that the amount of cryptocurrency you own cannot be altered unless you authorize the transaction.
Applying a similar system to personal data or IP information would similarly keep all your information on a decentralized ledger. Individuals would (should) be able to control what information they publicly share with advertisers, and what information they keep private. The potential usefulness of this kind of system could readily scale to accommodate public records like your birth certificate and social security number.
Your Data's Worth it
Startups like Profede and Bitclave are not only focusing on the potential for blockchain encryption as a hub for personal data, they’re also looking at ways consumers might profit from their choice to share that data with advertisers in the form of cryptocurrency.
If this model works, it could totally change the way digital advertising works, and how social media companies produce a good chunk of their revenue. Unfortunately, we’ll have to wait and see how the next several months unfold. Both Profede and Bitclave are still developing their platforms, and there may be potentially restrictive data privacy regulations brewing in the wake of the Cambridge Analytica news. What is clear is that the concept is sound—blockchain technology would be effective at giving users more privacy and control over their personal data. And creating a functional application for that technology could be a very big deal.