How Blockchain’s Decentralization Narrative Can Redefine Data Privacy

The true value of blockchain technology can be found in data privacy.

Blockchain’s prolonged sentiment as a panacea to the world’s problems throughout 2017 was unambiguously representative of what the Gartner Hype Cycle details. However, out of the extended bear markets, which pruned many altcoins from the markets and helped participants in the broader ecosystem become more discerning, emerged several trends that still can drive important change in crucial areas.

One of those areas is data privacy, and the future role that decentralizing network and systems architecture can have in mitigating the endemic problems of data security, unethical data sharing and Orwellian-grade mass surveillance.

Surveying the cryptocurrency and blockchain landscape reveals that privacy has been continually emphasized among core proponents of the underlying technology, and is beginning to garner more widespread support following consistent revelations of data hacks and the extent to which governments seek to reduce financial privacy.

Privacy is a fundamental principle that has been overlooked for years as social media companies and internet tech giants rose to oligopoly status with enormously popular platforms. The platforms were free and groundbreaking, but behind the scenes, it is the users’ data that drives the business model and is doled out to third-parties without reprehension.  

The centralization of these models is inextricably linked to the problems that have increased data privacy concerns, and are gathering momentum.

While blockchains and cryptocurrencies do not singularly pose the solution to data privacy, they have reignited the debate about digital privacy and accelerated growth in novel technologies that help to secure better privacy. From a tangential development like zero-knowledge proofs (ZKPs) to distributed storage architecture, the narrative of decentralization provided the foundation for much-needed change.

Now, it is just a matter of creating that change.

Despite its original conception as an open and decentralized digital realm, the internet has not really lived up to its promises in this regard. Tech and financial companies employ siloed data models that contain massive amounts of sensitive, personal information and are subject to influence by governments and attack by hackers as central points of failure.

According to a Javelin Strategy & Research study from 2017, roughly $16.7 million was stolen through identity fraud in the U.S. Fraud stems directly from the poor security that centralized data models confer. Voluntary credit freezes following mass data scandals have become commonplace.

Privacy is the power to selectively reveal oneself to the world, not have your information sold to the highest bidder.