How Blockchain Will Bring Back Data Ownership to Consumers
Blockchain is set to change data ownership. It will help restore data control to the user by empowering them to determine who has access to their information online. It is a paradigm shift in how we deal with data and it will offer consumers the much-needed control over their own data.
Change is required for various reasons, including security and privacy concerns. A 2016 Pew Research study revealed that 74 percent of its participants ranked control over who can access information online as a primary concern. The study also revealed that transparency of data collection is a concern. Often, consumers do not even realize that they provide companies with the permission to use their data based on the use of their applications. Websites and applications served as some of the first collectors of personal data. Now data can be collected in many ways, including via smart devices and vehicles.
The issue of privacy, security, and transparency can grow when third-party vendors who create accessories or supplemental services have access to consumer information. Moreover, the amount of data produced every day is increasing exponentially. Every person is expected to produce 1.7 megabytes of new data per second daily by 2020, which includes consumer behaviour and personal information, that organizations will be able to access and target. While access and usage of this data may be expressed in these companies’ user agreements, often the terms and conditions are so long and complex that it may not necessarily be easy to read or understand.
Centralized organizations, such as Facebook, Google or Amazon, have too much control over consumer data and this system no longer works. It limits transparency and authenticity because users can only see their own interactions or transactions. It becomes problematic when a third-party vendor or partner of an application a user utilizes, has access to their information. Companies do not necessarily make it simple for users to know who their partners or affiliates are that purchase the right or have access to the personal data of their users. However, blockchain technology helps to mitigate these issues and increasingly consumers demand control over their own data.
Blockchain technology works by using a decentralized ledger system. This ledger is not isolated to one primary server or central ledger, such as in the case with a traditional banking system. Instead, the ledger is shared among a variety of computers, thousands or millions depending on the type of blockchain. This creates a system that is decentralized.
When using a decentralized ledger, it can expedite the verification process because it removes intermediaries. For instance, a bank transaction would not be verified until it goes through the Federal Treasury on the current centralized system. However, blockchain technology speeds up this process by verifying transactions cryptographically. Data ownership can be put back into the hands of the consumer when blockchain technology is used to speed up the process of verifying the identity of third parties. Consumers can be given a choice to select, for each piece of data that they create, whether or not they want to allow third-parties to have their information and verify if they are authentic. In addition, they can get paid for it.
It can be viewed as every piece of data having its own vault, including smart contracts linked to it that determine who can access the data for how long and against what price. Any transaction can be tracked and the data owner can benefit in real-time.
