Blockchain May Eliminate Data Abuse – Opinion

News | October 9, 2018 By:

Facebook screwed up users’ data again. The social media mammoth announced last Friday that a bug of their product might expose 50 million users’ profiles to hackers.

Facebook has been tangled with multiple data-related debacles this year. After the Cambridge Analytica scandal erupted and its stock drastically plunged following Q2 Earnings release, the European Union’s consumer protection authorities are currently pressing the social media giant to take immediate actions to further protect users’ data, otherwise it might face sanctions in Europe. At the same time, other tech companies, like Google and Airbnb, are also confronting doubts from users and possible punishment from regulators for not being able to protect users’ privacy.

While lawmakers are grilling greedy tech companies for misusing data, users have more mixed feelings. On one hand, they are worried about their privacy and data safety; on the other hand, they heavily rely on the Internet to do everything from shopping to dating, and it is nearly impossible to give up those seemingly free and convenient tools.

While tons of data is generated every second, data exchange seems to be inevitable, and even beneficial to some degree. Data fuels the development of machine learning technology, facilitates accurate consumer targets, and grows personalized online services. Tech companies, merchants and businesses could have used data for good things. The essential problem of data leak and privacy issues lies in how data is traded and handled.

Is there any possible way to address people’s concern over data security while keep utilizing data to make the world better?

Blockchain might be the answer. A set of its attributes make it destined to solve data leak problems.

First of all, it helps to put the control over data back to individuals’ hands. The problem confronting average users is, while they continuously create data just by clicking on a page or liking a photo, they don’t possess the data once it is out there online. Even though some companies now offer users the access to see who is using their data, they still don’t know how exactly their data is used and monetized. What users can see is the result: relevant ads appear on their social media feed and the sites they are browsing, meanwhile tech giants’ ads revenue is skyrocketing with billions of dollars.

Blockchain technology can change that by giving users private keys, which work as the only password for accessing data, to control and manage their encrypted data without any third-party intermediaries. They get to decide under which scenario they are willing to share data and whom they want to share data with. No one can exploit the data without the consent from data contributors.

Microsoft eyed blockchain to resolve this problem a while ago. Early this year, they announced that they added blockchain-based decentralized identity ecosystem to their popular identity authentication app whereby users can control and manage their data and cryptographic keys. Apps and services need to request consent from users to interact with their data.

“Rather than grant broad consent to countless apps and services, and have their identity data spread across numerous providers, individuals need a secure encrypted digital hub where they can store their identity data and easily control access to it,” it reads in the company’s blog.

Furthermore, when data is stored on a distributed blockchain network, data usage will become more transparent and incorruptible. For a long time, the lack of transparency and control over data result from centralization. Users’ data is all stored on a centralized database of tech companies. It’s completely their call to decide where and how the data will be deployed and traded.

A centralized database is also very vulnerable to hacking or internal technical errors. Last year, the data breach of credit reporting agency Equifax made headlines. Over 140 million Americans’ personal information, including names, address and social security numbers, had been leaked. Centralization makes it harder to prevent data from being leaked or stolen.

Compared to a centralized database, blockchain distributes data on a group of computers in a public network. And since every transaction needs to be verified and approved by consensus among participants, it’s difficult, if not nearly impossible, to tamper or cheat in the system. That means a single party can no longer arbitrarily manipulate users’ data anymore. Every node in the network makes decisions together and supervises how the data is used. Besides, it is much harder for hackers to smash many distributed nodes than just attacking a centralized one.

Filecoin and Storj are among the pioneers to create a decentralized database. They encourage users to share their unused storage with each other. Therefore, data is shattered and stored on different computers and only users who have private keys can access to complete files and data. Other blockchain startups like Bluzelle and Swarm go further: while developing decentralized database services, they are trying to address the inefficiency of the distributed network and make data quickly and easily accessible to app developers.

Apart from the encryption and decentralization of blockchain, traceability adds another layer of data security. Since all the transactions would be recorded on the chain chronologically with a timestamp, users, data buyers and data providers can see if and how many times the data has been used before, and have a better picture of where the data goes.

Traceability also makes it possible to capitalize data for average users. Once the data is generated and stored on blockchain, you can always trace back to its origin and owner no matter how many times it has been used and transmitted. It guarantees data contributors’ rights to possess and benefit from their data.

There are already some startups like Measurable Data Token that are working on helping users monetize their data by leveraging blockchain. Instead of filching data without users knowing it, Measurable Data Token wants to empower people to control and see where their data is used. Once they opt-in, their data will be anonymized, aggregated and traded as big data. Everytime their data is deployed, they can get their share of profits.

Blockchain is able to transform the way data is gathered and used. As an increasing number of tech giants like IBM and Microsoft are wielding blockchain to strengthen data security, we can definitely envision a near future where we, as data creators, can decide how our data is used and even make money out of it.