The recent Netflix documentary, “The Social Dilemma” has caused shockwaves in the public and tech discourse. The film offers an insider’s look and perspective at how big tech companies utilise data as a core part of their business model. A central point of discussion is how these companies use that data to capture our attention and nudge us to change not only what we do, but how we think too.
Individuals and governments are taking notice.
Just last week Facebook threatened to pull out of the European Union if the EU didn’t relax its rules around how data of EU Nationals was processed and where it was stored. You read that correctly: They threatened to shutter both Facebook and Instagram across the whole of the EU.
An entire cottage industry of startups has been working for the past three years to build platforms promising users the ability to control their data or to get paid for their data. They promote that “it’s time to stop all of that money going to big tech firms”.
Some of those companies plan to use blockchain technology as part of their solutions. But will it work?
The short answer is: No. The long answer is still No, but it’s complicated – Let’s break it down.
There are 5 main reasons why blockchain isn’t the answer.
1. It isn’t your data.
You’ve seen it dozens (or maybe thousands) of times. “They are selling your data!” (cue the *gasps*)
Whilst this is an easy to digest headline, it’s simply not true.
The data isn’t yours. The data is about you, but it isn’t your data. The company collecting the data owns the data. In the same way, a photograph may be of you, it is owned by the photographer. The only data you own is your personal data (email, phone number, address) and data you provide (photos, status updates etc.). And some platforms claim ownership of that in their terms and conditions (You know. The ones all of us never bother to read…)
“They are selling your data!”
Whilst this is an easy to digest headline, it’s simply not true.
Companies are spending billions of dollars collecting all of this data and then using it to build predictive, highly complex algorithmic models as to who we are, what we like and what we might do next. That data is their most significant asset. There is no way they would ever sell this data to another party. Yes, they may use some of that data as part of their business model, but the data never gets packaged up and sold to someone else.
Even before GDPR and the new California CCPA legislation, it was illegal to sell personal information to a third party. Sure, some black market hackers may sell your email address and password after penetrating a company’s lax security, but in general, selling of personal data just doesn’t happen.
Managing your data with Blockchain is just too hard
Ok. Let’s say that you decided to sign up to one of these personal data monetisation services. The first thing you would need to do is to spend hours and hours entering all of your personal information, engaging in hours of endless surveys. You will be effectively giving away a massive amount of your personal data to a third party. This is going to take some time. Nevermind the fact that you’ll need to refresh this information every 1-3 week to ensure that it is current and correct.
It gets worse: Every merchant or advertiser or media platform that wants to access your information is going to show up as a notification. You’ll be flooded all day, every day, with requests for your information and you’ll need to decide who you say yes to, and then determine what information to share. In a matter of hours, you’ll be overwhelmed and just say “Yes” to everything or “No” to everything.
It would effectively be an endless feedback loop that just thinking about is not only impractical and massively time consuming – it would drive the most patient person on the planet mad!
As the data is (somehow) connected to a blockchain you will need to manage your private key and make sure you never lose that – otherwise you’ll have lost all of your data and any altcoins/tokens you may have earned from sharing that data. Forever.
2. Your data isn’t worth much.
You’re a crypto fan – right? Naturally you’ll want to get paid in crypto for your data. The fact that crypto is divisible is excellent. The smallest unit of BTC is 0.00000001. And that’s great because that’s about what your data is worth for every enquiry. It’s going to take you time to make any money doing this. (Oh – and please don’t talk to me about Brave. Their business model has no future.)
“The value of self-reported data is substantially less than the value of observed data. I’m sure that YOU would never answer a survey question the way you wanted things to be rather than the way they are – right?”
Remember how much time and effort you spent managing your personal data. The majority of that value will still go to the platform (the intermediary) and some to the publisher of that game you’re playing or the article you’re reading etc.
Blockchain can’t store your data.
Blockchain is terrible for storing large amounts of data. Even if you could store the full amount of data in the blockchain and keep all the copies in sync, it would take up a tremendous amount of resources.
Then there is GDPR and similar regulations that have enshrined “your right to be forgotten”. Sorry, data in a blockchain is immutable. It can’t be edited, amended – or deleted.
You’ll have to store all of this data somewhere else. You know. Somewhere those black hat hackers I mentioned earlier could come along and steal all of it.
Current blockchain/DLT tech can’t keep up.
A real-time bidding transaction in ad tech takes around 100 milliseconds. That’s providing all of the data, getting the bids, selecting a winner and serving the ad. With multiple ad networks all trying to serve billions of ads per day, the transaction volume is staggering. Today’s blockchain and DLT technology have no means of keeping up with those speed demands. It just can’t, it shouldn’t have to, and it’s not designed for that.
Blockchain is simply not the right platform for consumers to manage their data. And frankly, most consumers are too lazy to manage their data – especially with such a small reward. But what if there was a new business model that turned advertising and content monetisation on its head? What if blockchain could play a vital role in a totally new ecosystem?
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Get in touch with us info@blockchainrookies.com / Twitter @igetblockchain
Troy Norcross, Co-Founder Blockchain Rookies
Twitter: @troy_norcross
