As social media giant Facebook continues to reel from its recent privacy breach, blockchain technology is quickly emerging as a more secure approach to data storage.

With over 50 million user profiles affected, Facebook’s recent Cambridge Analytica scandal ignited a global discussion on the safety of personal data currently stored on the Internet. This led to a number of mass realizations, such as how sensitive personal data is entrusted to a few powerful corporations and held in sprawling data centres that are at risk of being hacked. Worse yet, users are finding themselves unable to retrieve or even see how their data is being used.

But where most internet companies have faltered, blockchain technology is stepping up to the plate – not just to take the mantle but also to revolutionize data privacy and storage. With applications that enhance not only security but transparency, blockchain is providing a way for users to reclaim ownership over their data.

Cambridge Analytica Scandal

The Cambridge Analytica breach began with a ‘personality survey’ developed by academic Aleksandr Kogan that was distributed among 270,000 Facebook users who were paid US$2-3 each to download it. However, the app’s terms of service granted it the ability to see not only the participants’ personal data but also the profiles of their Facebook friends. That was how the breach snowballed to impact over 50 million users. Once obtained, this treasure trove of data was sold to Cambridge Analytica who used the information for political ads micro-targeted at individuals based on their psychological profiles.

It is important to note that Kogan’s collection of data was not illegal. The violation only occurred when the data was sold to Cambridge Analytica, a practice against Facebook’s data sharing policies. Once Facebook found out about the sale, it made the company sign documents promising the data would be deleted, but it never was.

The scandal makes clear that Facebook users have no idea who can access their data and what it is used for; and that the platform itself has little control over what third-party applications do with the data accessed. However, Facebook is only one small part of a much bigger problem.

Towards User-Owned Data

In today’s digital age, online data is one of the most valuable resources in the world; but shockingly, individuals do not have the right to control it. Instead, it sits in central servers owned by massive corporations who use this position of power to profit tremendously. As the scandal shows, this data is often irresponsibly left open for unknown third-parties to exploit and in many cases also misuse.

For these circumstances to change, data needs to become property owned by an individual rather than a corporation. If one buys a Toyota car, Toyota does not have the right to lend it to a stranger without asking. Online data should not be any different – a mission that blockchain is accomplishing by championing user-owned data.

Possibilities Of Blockchain

Prior to Bitcoin and blockchain, it was impossible to send transactions over the Internet without going through an intermediary like a bank or PayPal. The Bitcoin blockchain enabled individuals to send peer-to-peer transactions over a decentralized global network of computers. Ethereum took things a step further by allowing for the transfer of value to take place without any intermediaries at all. Given that Facebook is essentially a bank for personal data and social interactions, Ethereum based social-networks have the potential to be massively disruptive.

Where Facebook’s user data is stored in a central database, Ethereum based social networks keep data in users’ hands through a set of cryptographic keys. The data is fully encrypted and is only decrypted and available for authorized parties when a user provides permission via a cryptographic key. This way, interactions can only take place with full knowledge and agreement between two users over a blockchain network. The ownership is further exemplified by users’ ability to choose how they share their data. If they are dissatisfied with one blockchain-based social network, for example, they can take their data to a competitor. With Facebook, the only option is deleting the account and losing all data.

Blockchain certainly has the power to technologically restructure the Internet and transfer valuable personal data from the hands of large corporations back to the people who created it. But it still needs to scale to match the user friendliness and massive amounts of data that centralized companies currently hold. However, given the number of talented engineers and entrepreneurs in the field, solving these issues is more imminent than ever. The final frontier will likely be getting the public on board and impressing the importance of owning their own data. As more scandals like Cambridge Analytica surface, the switch from centralized to decentralized social networks should only be a matter of time.

About The Writer

Gaurang Torvekar is the Co-Founder and CEO of Indorse, a decentralized professional network powered by Ethereum technology. He also co-founded and serves as the CTO of Attores, which partnered with Ngee Ann Polytechnic to formally issue blockchain diplomas. Previously involved with several FinTech and AI startups across India and Singapore, Gaurang is also the co-organizer of the Ethereum Singapore Meetup and helped it grow from just 23 members to 1,300. He conducts courses on Ethereum hands-on coding and has also worked on a book on Building Ethereum Dapps. Gaurang holds a Masters in Information Systems from Singapore Management University.

This article was first published on the MillionaireAsia Issue 47 - March 2018

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