Blockchain is a greater threat to Equifax and Other data Brokers
Feb 23, 2018 Posted / 4187 Views
Blockchain technology in short span of time has seen all- scammers, impostors, comedians, and regulators. On one hand, there is a joke cryptocurrency which magnetized piles of real cash, some governments announced plans of ICO and an ice tea company swivelled to bitcoin mining. While no elixir, blockchain technology is remarkably good at doing one, useful thing: eliminating mediators.
The economy harbours plenty of middlemen besides banks, but projects based on bitcoin's core innovation, the blockchain, have the potential to challenge them as well. For example, take data brokers. These are principally complex, with unimportant and vague, x-heavy names like Acxiom, DataLogix, Experian, Arimidex, and the now-famous Equifax. These firms abrade consumer data such as financial transfers, social media activity, browsing history, e-commerce purchases, location data from public sources, or buy it from digital services.
The brokers scrutinize this data to determine everything from hobbies to creditworthiness to inclinations to sexual orientation. They sell it on to advertisers, card issuers, prospective employers and whoever else might be interested. In this way, each individual consumer generates a nice stream of rent for an industry that gives them nothing in return. Equifax Inc. earned $488.8 million in profit in 2016, $3.36 for each of the 145.5 million victims of the data breach it announced in September.
Accounting for the number of players in the industry and the rapid growth in the amount of data users produce, there are reports in the media that estimates that in the year 2022, roughly $7,600 worth of personal information will be bought and sold per person.
It can only serve that purpose, though, if the money does not go to middlemen, but to the people who actually generate the value. That's hardly the case today. User data, often called the "new oil,"is never compensated to the users, from whom it is generated. However, Blockchain technology and related cryptographic techniques could change that, giving us control over our personal data and enabling us to sell it to whomever we please.
There are blockchain companies that are trying to bring this change about. The idea has a more fundamental appeal, the ability to control- a "self-sovereign system," which makes the user the sole owner of their data and the only one with the ability to grant access to it. There are many blockchain-based apps aiming to do away with data middlemen wherever they can be found.
However, most of these projects are in their very early stages and their operative details vary, but the solution is generally representative of the technology that enables these decentralized platforms. For instance, you want to sell some of your personal data of your Facebook activity or Amazon purchases. You and the purchaser each have a public key and a private key. Public keys are used to encrypt a message, to scramble it so that it looks like gibberish to everyone except the holder of the matching private key, who can use it to decrypt the message.
In order to exchange your private data securely, you encrypt it with the purchaser's public key and send the encrypted data to them. They take the data and decrypt it with their private key. If someone in the middle intercepts the data, all they obtain is an unreadable mess.
Hashes are cryptographic functions that enable quick verification that two sets of data are identical. They do this by distilling data down to a manageable chunk. No matter how short or long the text you run through SHA256, the hash function used by bitcoin, you will get 64 characters back. Now if you hash text, you can immediately check that what you've received has not been tampered with – no need to pore over every jot and tittle. Simply hash your text and compare it to the hash of the sender's ostensibly identical text. The process is instant because hash functions are so finicky. Delete the exclamation point in the scene's first line, and that one change yields an unrecognizably different hash.
This sensitivity to tampering makes hashing central to bitcoin, ethereum and their peers. Thousands of identical copies of a blockchain can be efficiently maintained because they're compared using hashes, rather than through meticulous scans of every block.
Even though the data exchange itself does not happen on-chain, the ledger is crucial to decentralized data transfer. Blockchains are immutable public records that remove all doubt about what was traded, at what price, and when. The hashes broadcast to the blockchain either match or they don't, so buyers can't claim they didn't receive data that in fact, they did. Nor does anybody need to wonder whether a hacker or spy tampered with the data en route.
Without the need for someone to mediate the exchange, brokers lose their raison d'être. They are replaced by a large number of (ideally) dispersed, competing and mutually distrustful "miners" who post exchanges to the ledger. Thus providing more efficacy to the system.
Hence we can say that Blockchain is far better data supporting solutions than any other platform, which claims to do so. No other company will give us our data in our hands rather selling our personal data to the companies for which no user is even paid.
Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .
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