The Next Tech Unicorns Won’t Exploit Personal Data; They’ll Have None. #PriTech
A new breed of unicorn is coming and it‘s not a ‘datavore’.
This article was co-authored by Joshua Marriage and Matt Collis, co-founders of Privacy Express — a Privacy Venture Studio based in Sydney, Australia.
You’ve heard that privacy’s dead, right?
Even Mark Zuckerberg admitted in a sweaty moment that privacy is a thing of the past. But the Facebook boss spent $30 million on the properties surrounding his Palo Alto home in a desperate bid for a little privacy, while companies just like his stripped it away from their customers.
You see, without your personal data, the likes of Facebook would cease to function, and Zuckerberg wouldn’t have had the money to buy the extra houses. Today’s tech unicorns survive on a diet of personal data, and that’s what gives them their actual value.
You are the product, and without your information, these monolithic companies would have nothing.
But shouldn’t personal data belong to the people?
Of course, it should.
But that wouldn’t be profitable, now, would it? Well, neither was the Cambridge Analytica Scandal that still hasn’t died down. It cost Facebook’s market cap $124 billion in a single day.
The biggest one-day loss in stock market history.
At first, it seemed like Facebook might just get away with this one. The news broke, then it went viral, and the stock price continued to climb. That was until investors received the next quarterly earnings report.
“Privacy costs often become clear only after they’ve already been paid.”
While the Facebook/Cambridge Analytica scandal brought data privacy into the public eye, they are far from alone. In the past few months, we’ve seen headline-grabbing losses of personal data from:
In total, an estimated 3.4 BILLION data records were compromised in the first half of 2018. That’s 214 data records either lost or stolen every second.
That is a broken system.
So, what’s the value of personal data?
People are often quick to dismiss the value of personal data. ‘I have nothing to hide,’ they think. It’s quite surprising that a person would take more care over their credit card, which is replaceable and almost certainly insured.
Once someone has your name, address, date of birth, driver’s licence or your Medicare card, they can apply for a new credit card that you will never know about until the bills start to arrive. On the Dark Web, traders buy vast quantities of partial data files hoping to fill the gaps in your file and turn your details into a loan application.
If that’s not scary enough, consider that once this data is stolen, it can NOT be recovered — those details can be re-used over and over again. Entire criminal networks exist to phish, capture, and steal your data because the value is so high.
Privacy is a human right
Another less talked-about impact of privacy is the right you have as a human. What’s that you say, and why should you care? Consider the impact that a lack of privacy has on your behaviour.
To simplify the issue, consider how your behaviour changes when the curtains are open or closed. We know that surveillance systems like CCTV are there for our protection, but there is no doubt that we change our behaviour when we know we’re being watched.
Now consider how your behaviour might change if you knew that 100,000 strangers knew your home address. Time to close those curtains?
Government is doing something about this though, right?
Well, sort of.
GDPR in EU and the APP in Australia are designed to protect individual privacy, but it’s always a rearguard action as the companies fight to protect information from hackers and thieves. These measures can also stifle development, and that’s a real issue.
Deloitte argues that GDPR may have a significant impact on innovation and the marketing industry. They estimate the damage at 1–2% of the GDP and warn that these security measures could cost millions of jobs.
Hang on, what?
So data privacy is valuable and important, but please don’t make us change our practices so much as to really do something about it.
Meanwhile, in Australia, there is a pending policy change that would enable the government to force an organisation to decrypt personal data. This initiative was so damaging that it was hilariously parodied on a viral video by The Juice Media.
Unfortunately, privacy is no laughing matter… So what is being done, and what makes it so hard to solve?
Good intentions, but no solution providers
Cynics among us may believe that some solutions exist just to generate revenue. We disagree with that and believe many providers have good intentions — they just lack the bite necessary to kill the beast.
- Privacy law firms exist to conduct audits and help companies take remedial action, but they are just not practical for smaller firms. An Australian specialist provider recently indicated a small business would need to pay $15k and wait three months to get an audit completed.
- Pseudo credit cards and communication services make sense. However, in all the instances we have investigated there is usually some fatal flaw like requiring the user to sign up with their personal details in the first place — making the service provider a honeypot for would-be attackers. Companies harvest your data, mine it and then try to protect it. But should that happen at all?
What does a real solution look like?
To understand what a possible solution might look like, it’s helpful to consider what are the foundational problems — the immutable truths driving the ‘privacy issue’.
We believe there are two problems:
- Companies are incentivised to collect customer data, but not to protect it.
- Individuals choose convenience over privacy.
To address these issues, there is a range of existing technologies that we believe will combine to form a new privacy layer to the Internet.
We’ve coined the term #PriTech (Privacy Technologies). These companies and initiatives include:
- Cryptocurrencies — CloakCoin and Monero for example, can hide the currency-owners’ identity through transactions.
- Blockchain — An encrypted distributed ledger that can hold smart, private contracts either P2P or P2B.
- Digital ID — Securely handshake your identity authoritatively to an organisation without transferring your personal data.
- Chatbots — Unique ability to provide anonymous access to expertise.
The next billion-user company doesn’t want your data
The business model of collecting and exploiting personal data will almost certainly be dead within a few years. We’re not the only ones to believe that.
Even the world’s most valuable company, Apple, has begun to change its tune in the past year. Its new ‘privacy pledge’ goes as far to say that:
“Privacy is a human right, and here’s our pledge about what we are doing about it.”
Many major brands might see privacy issues as an inconvenience, or even a threat to their business model and the economy at large. There is an emerging view that putting privacy first is more of an opportunity than a threat.
Technologies like blockchain exist today to make that possible, and those that actively seek solutions that customers care about, stand to win in the not too distant future.
About the authors
Joshua Marriage and Matt Collis are co-founders of Privacy Express — a Privacy Venture Studio that helps businesses connect with individuals without compromising privacy.
Continue the conversation by visiting https://privacy.express