In a digital world governed by corporations who own infrastructure and control the flow of information, users have no assurance of privacy. Amidst social networks and targeted advertising, our data and identities have now become a profitable product.

Privacy-oriented users have traditionally turned to private networking, which ideally protect traffic by rerouting it through private networks. However, there are still risks because of the centralized way these platforms handle traffic. For example, there is still a money and traffic trail, wherein users can be exposed on the basis of their transactions.

Therefore, the global privacy dilemma can be addressed by decentralizing control and flow of data — something that decentralized platforms like blockchain can ideally address.

Data collection is seen as a profitable venture by internet companies — something recently highlighted by actor and now social commentator Sacha Baron Cohen in a speech at the Anti-Defamation League and column at the Washington Post, where he criticized the so-called “Silicon Six”. He has accused top internet executives of being complicit to massively profiteering from user data.

“The very business model of internet companies is to aggregate as much data as possible,” says Eugen Salkutzan, Community Manager at MADANA, a platform for self-governing and community-driven market for data. “The vast amount of behavioral and preference information that can be extrapolated from this data is enormous!”

“We blindly sign away our data. As a result, giant tech companies are making money off of consumer ignorance — and we pay the price,” adds Patrick Lee, Chief Executive Officer at privacy-oriented search platform Boogle. “This wasn’t the internet we envisioned. Over time, we have created a terrible habit of outsourcing responsibility to big tech over our own data, and maybe it’s because we don’t see money flowing out of our pockets when it is being used.”

Private companies are becoming increasingly powerful due to the vast amounts of data they continue to collect on individuals.

“As we have seen in the past decade, most will overstep any opportunity to collect as much data as possible when given the option,” says Jared Polites, Venture Partner at Blockteam Ventures, a management consulting firm focused on blockchain, distributed ledger tech, and emerging tech. “I do not see this changing, so the real burden of responsibility should be on users to remain as private and secure as possible in their day to day lives.”

How decentralized platforms work to protect privacy

Salkutzan shares that decentralized and also distributed ledger technology (DLT) — which blockchain is a subset of — establishes a trustless mechanism with no single point of failure. It takes back control from organizations or corporations and gives more control to users. “An important advantage of DLT and decentralized solutions for businesses are the fact that enterprises can give the control and sovereignty of their data and power in general back to their customers and clients. Decentralization in the sense of empowering people often means also sharing any potential risks, which could be a risk but also a benefit from various views.”

Lee focuses on how blockchain-driven applications, like search platform Boogle, empower users to accomplish tasks like search but without having to unwittingly be part of a large-scale data-collection scheme like that of the major platforms.

A distinct advantage of blockchain’s digitalized nature is that users can get rewards for participation. The big difference is in how blockchain platforms treat users as clients and not as the product: “No single entity can access user’s search data without the user’s permission. We want to reward internet users for using our search engine. The more information you allow advertisers to know about you, the more we will reward you for it. Traditional search engines sell your data. We pay you for your data,” Lee says.

William Jiang, Head of Operations at technology advisory firm Elevate, shares on the game-changing potential of blockchain in addressing the global privacy issue. “Traditional means of enhancing privacy such as private networks can still leave digital ‘breadcrumbs’ that cyber attackers or advertising platforms can trace — even some decentralized platforms can fall victim to this.”

He says that businesses need to be smart about how they implement privacy, so that there is no single point of vulnerability. “Decentralized tech makes it possible to achieve true user data protection without sacrificing security. This is a big opportunity for businesses, since they no longer need to compromise on user data protection in optimizing their operations for targeted markets.“

Salkutzan summarizes the benefit of distributed ledger technology in ensuring privacy: “DLT’s have the benefits to build systems and databases that require no system administrator you need to trust, for the database or system to operate the way you intend it to be. The transparency involved in the open-source nature of DLT leaves little room for single points of failure.”

However he stresses the need to ensure records are kept private, amid the immutable nature of blockchain: “The security aspects of DLT’s are unmatched, but that doesn’t mean that privacy is something guaranteed. Quite the opposite can be the case as the records on a blockchain are permanent!”

He adds that privacy can be ensured by differentiating where data and transactional information are stored on the blockchain.

Toward mainstream adoption of decentralized tech

Polites stresses that blockchain platforms have been unfortunately tainted by illicit use in the past due to their pseudo-anonymous nature — thus compliance mechanisms such as KYC are necessary to overcome before decentralized tech can gain more mainstream appeal. “Blockchain records are public, albeit masked for identity, so the real need is the make sure KYC documentation and personal data remain private at all times.”

However, Polites highlights the need for users to be mindful of the solutions they use, in order to keep data protected. “My advice, in general, would be to always use decentralized applications and exchanges when possible to avoid any kind of documentation uploads unless absolutely necessary. This is simply for protecting sensitive personal data.”

Photo by Matthew Henry on Unsplash