Hint: It doesn’t really exist.

Ask 10 people what privacy looks like and you’ll get 10 different answers. There was a time, however, when our concept of “privacy” (versus “public” knowledge) was fairly universal. That seems almost quaint now. With the advent of online commerce, social media, and the digitization of just about everything, personal information — let’s call it what it is today: data — the lines are no longer clear, even when you’re diligent about protecting that data.

The concept of privacy is only about 150 years old. In 1890 in The Right to Privacy, United States Supreme Court justices Samuel Warren and Louis Brandeis defined “privacy” as the right to be left alone. In practice, however, the line between being left alone and being “public” has always moved as technology has evolved. Facebook. Online banking. Electronic health records. WikiLeaks. Today, true privacy — the right for your data to be left alone — requires encryption.

A brief history of encryption

So how do we as a society provide a bright line between data that’s ours and data that someone else — the government, large corporations, NPOs — owns? A safer, more trustworthy web has been the holy grail for decades. But long before Tim Berners-Lee created the Internet, humans were encrypting. Early cryptography began in the 800s with the Arab conquests. Transposition ciphers began appearing in the West around 1450. In 18th-century France, a fairly advanced method of encoding personal attributes (physical details, personality, wealth, etc.) into a framed drawing was developed to uniquely identify that person when traveling. So even 400-odd years ago, people were already offering up their personal data without realizing how it might be used against them.

Even before the Internet, when access to localized computer systems needed to be secured, access protocols were the first line of defense. The first username/password combination method was deployed at MIT in 1961. In 1979, the Data Encryption Standard (DES) was developed. In 1997, 128-bit encryption came along in the form of the Advanced Encryption Standard (AES). But even public key encryption — which first reared its head in 1973 — was known in its first publicly available incarnation as PGP or Pretty Good Privacy.

The cost of breaches

Data security, of course, is the ideal. But is that even realistic? Big corporations. Governments. We’ve blogged about the frequency and costs of data breaches. It feels like nothing is truly secure anymore. Beyond the damage to confidence in our institutions and systems are the very real losses caused by security breaches. Globally, the average cost of a data breach is USD 3.62 million. In 2016, credit card and identity fraud cost $16 billion in the US alone. In 2015, lost revenue due to false positives — genuine transactions mis-identified as fraud — totalled USD 118 billion. And that’s not even factoring the reputational costs to businesses whose customer data has been hacked.

And how about those customers? The world is on their smartphones. And they’re buying. Convenience. Immediacy. We love online buying — online is our default. Imagine what our children will consider “normal”; it’s a future where our online identities are as natural as our offline ones. How can the average person truly trust that this new normal isn’t coming at the cost of, ahem, doing business?

Blockchain and decentralization

Here’s where things get interesting. Incorporating the best aspects of cryptography, blockchain allows for the creation of an immutable, decentralized ledger. These two qualities — immutability and decentralization — create a network of trust where all consumers and merchants are treated equally. Best of all, only you have the key to your information — a principle known as zero knowledge storage.

Blockchain delivers the total package: zero knowledge storage, encryption, privacy, security and trust. The possibilities for personal and financial data are immense. Imagine an online world where you didn’t require a separate username and password combination for every e-commerce account. The result: You’ll be more confident in the privacy and security of your data and more willing to transact online.

The problem with privacy is that it really doesn’t exist today. But it could tomorrow. And that’s what we’re working on here at Nuggets. A new digital era, where you control your data. Where your payments and unique identification are truly private and secure. Where every transaction you make is simple and fast. No data breaches. No passwords. No worries. Sounds pretty good, doesn’t it? We think so.

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