Our personal data is our asset, which we voluntarily give to the business in order to use their products and services. So, for the Internet companies, our data is the same asset, by means of which their business operates. They use it for their robotic advertising mechanisms to provide the user with relevant contextual advertising. For instance, in 2017 the advertising revenues of the Google Corporation accounted for 87% of the profit - $95.38 bln. The percentage of advertising revenue in total revenue of Facebook is even more impressive - 98% of the profit in 2017, that is $39.84 bln out of $40.653 bln.
One of the Singapore-based DLT-company in cooperation with Deloitte is keen to return the power over personal information to users, launching a new blockchain platform for data exchange in Southeast Asia. Users will be able to contact commercial organizations and disclose their personal data by monetizing it.
At the moment, the issue of the data privacy is the most acute for users. This year Facebook, and it is especially upsetting, allowed the leakage of its users’ data this spring. A London-based company providing political consulting services, Cambridge Analytica got access to the personal information of more than 50 mln profiles on Facebook (or 87 mln according to Facebook statements) through the Facebook app, "This is your digital life", and, without their knowledge, used it to influence the outcome of the presidential election in the United States in 2016. 9% of affected users deleted their accounts from the social network afterwards.
It is logical to suppose that such an ethical approach of the platform, based on obtaining the consent from the user for personal data processing and giving him the opportunity to directly see who will use it and how, will find a positive response from the public that is predisposed negatively in the recent time. And the additional motivation in the form of earnings will only contribute to the growth of the platform's popularity.
However, it should be noted that users should not count on substantial earnings. The calculator, developed by the Financial Times in 2013, shows that basic information about age, gender, and location costs an average of $0.00054 (including the US inflation), income details and shopping histories are a little more valuable, they both sell for $0.0011. The information about people, who are believed to be "influential" within their social networks, sells for $0.00081.
Moreover, the personal information is considered valuable only if it is not available online, and in the era of social networks and mobile phone communication, it will be difficult for a user to share something new. Ken BODNAR, the consultant for Blockchain Associates of North America, Caribbean, Europe, and SE Asia, says: "I do not believe that individuals selling their personal data will make much money and will be able to add something significant. Using Bayesian inference, with just a few data points, a data scientist can generalize how much money a user has, etc. The only surprises that an individual can make, is to reveal secrets - the amount of adult films that they watch, etc. All other stuff can be inferred from their internet data tracks".
We have a rather superficial understanding of the real volumes of personal user information that telecommunication companies already own. In 2011, an Austrian law student, Max Schrems, sent a request to Facebook for all the data the company collected about him in accordance with the European "right to access" provision. While studying law during the semester in Silicon Valley, Mr. Schrems decided to write a coursework on Facebook's lack of awareness of the European privacy law after attending a lecture by the company’s lawyer Ed Palmieri. The result of long negotiations was a mailed CD with a PDF-file of 1,200 pages, which contained details of personal life, correspondence, photos with the coordinates of the places where they were made, etc. Photos, videos, and documents deleted by the user himself were also present in the file.
In the data privacy issue, the blockchain-based platform can also offer a new level of security in the valuable data exchange. It is possible due to the fact that the blockchain uses complex mathematical software rules - cryptographic codes that are unique for each block. The reliability of each transaction is confirmed by consensus algorithms. On the one hand, the DLT technology with a high degree of security gives the advantage to a new platform over the same security systems of traditional business, which suffers significant losses in the case of hacking. For example, in 2014 the website of the financial giant JP Morgan Chase was suffered to a hacker attack, during which fraudsters got access to the data of 76 mln household and 7 mln small business accounts. After the information had been announced, the bank shares fell by 0.89% in a few hours, which was equivalent to almost $4.5 mln. The above-mentioned data leakage of Facebook users provoked a drop in the company's share price by 24% losing roughly $134 bln in the market value. You can only imagine what a financial disaster could be a hack of the security system of less authoritative and wealthy companies.
On the other hand, even the security of such a seemingly perfect system as the blockchain cannot be guaranteed by 100% as Mr. BODNAR notes: "My ICO platforms are under constant attack. This platform will be no different". In January, scammers managed to steal $500 mln from the CoinCheck crypto exchange. In total, in the first half of 2018, hackers robbed about $1.1 bln.
Another important economic aspect is the cost of participation in the platform. The platform does not disclose specific figures yet, but the white paper confirms that the network fee will be charged. The CDO at Healthtex and the CEO of Smart Contract Auditing, Frederik BUSSLER notes: "Running big data centers is financially prohibitive for many tech startups, so offering alternatives is a huge benefit to those in need of compute power. This platform could be a solution, but it depends on the rates Deloitte will offer".
Long ago telecommunication companies have realized that business was often interested in a common state or regional audience overview, and therefore they established their own Big Data Centers, where they now consolidate information and conduct its analysis, selling it subsequently. The cost of the most basic survey by the Google Marketing starts at ¢10. Thus, there are doubts that the platform will be able to offer the analysis of the same high quality at a lower cost. "This platform will be more expensive to obtain info. They can get it cheaper from companies like Facebook and LinkedIn who package the data many times over", - Ken BODNAR believes. The expert insists on the economic non-viability of the platform now, considering all the competition, as launching similar platforms in other world regions is open to question.
You have been successfully subscribed to our newsletter!