Blockchain Will Really Disrupt Silicon Valley Once Consumers Control Own Data
Blockchain will enable information sharing agreements that put consumers in control of their own data.
The mantra “If the service is free you are the product!” has become the common battle cry for Silicon Valley.
Consumers on the lookout for freebies have flocked to these free services and signed away their data rights to access these cool and “indispensable” services. However, with AI, microtargeting and next best action algorithms becoming ever more pervasive, things can now feel a little creepy for many consumers.
There are plenty of recent examples where social media has collected, mined and sold customer data to third parties only for the data to be “weaponized.” The customers’ very data is sold to political parties and propagandists of all persuasions who target specific groups of customers.
Consumers today have zero control over who can access and sell their data and how they go about doing it. Existing regulations assume that a consumer will know who has their data but that is impossible in today’s world.
Governments take aim
The advent of new global data regulations on protection and sharing of data will disrupt and end this era of “collect everything and sell everything to everyone” business models. That, in turn, will have a massive impact on social media companies in the Valley.
The movement to give consumers control over their own data is rapidly growing, and information sharing agreements are likely to be the means by which consumers can take back control over their data. However, for such agreements to be effective, you need to have a distributed ledger that all parties can access. This ledger must be tamper-proof and allow buyers of consumer data to be certain that the consumers in question have given consent.
Data consent has traditionally been delivered via terms of service agreements or by ticking boxes on a web site. Blockchain technology will enable new ways for consumers to dynamically provide consent even more granularly. This ironically turns the tables on the very companies that have used ever finer targeting of consumers.
Imagine you are asked by a prospective utility company to provide two years’ worth of past bills from your current supplier to determine the best plan for you. In today’s world you provide the data manually and hope that what the company implicitly would use the data exclusively for that one-time purpose and then destroy it.
As a consumer you have no way of giving consent every time your data is used. Nor do you have control over the scope of the consent you do give. Finally, you have no control over the use of the data, who is allowed to use it or the retention period.
Using the Blockchain
Creating a centralized information sharing agreement would be one way of achieving this. However, such a solution would have to be owned by one party, which is unlikely because of business competition. In reality, the industries that use your data tend to be quite fragmented.
Storing consent on a Blockchain will allow the consumer to authenticate the consent directly. This also creates information sharing agreements that can be read by anyone and appended to the data that is transmitted to a company. This metadata will enable tracking and enforcement of consent against a distributed Blockchain ledger and give the consumer dynamic control over their personal data.
This further enables a company to perform due diligence to determine – before accepting any data – if the consent to share this has been granted and what scope of access has been agreed to.
Companies are coming to the realization that data is not only an asset, it is also a liability.
Therefore, this needs to be a service that for businesses of all sizes and it has a small incremental cost per customer. Blockchain technology can enable such a service and put the consumer in the driving seat on exactly what, who, and when anyone can access their data.
- By Stephen Holmes
Stephen Holmes is Vice President of Virtusa’s xTech Lab. In this role he investigates the application of core technologies in solving current digital banking challenges, including Blockchain technologies and smart contracts.