Privacy, Technology and Perspective
The Future Will Be Decentralized. It’s often said that the future is contingent on decisions made in the present. Today, we’re seeing a trend toward decentralization that we believe will fundamentally transform the Internet and digital privacy in the future. Let’s explore this.
Background: The Centralization of Today’s Internet
Since the World Wide Web was invented by Sir Tim Berners Lee in 1989, it has undergone a radical transformation. Today, platforms like Facebook, Google, Amazon and others dominate the market, in large part, because of their accumulation and exploitation of consumer data.
Big Tech companies rely on business models that treat individuals’ data as an asset that they freely collect, use and sell to advertisers. Those models rely on individuals providing such data, which includes both personal information and other content. The companies also utilize algorithms to derive “insights” from the data in order to encourage more “engagement” with the platforms. Their business models have created an attention economy, which in turn, has been astonishingly effective at causing the big platforms to get bigger and bigger. The result is a growing proportion of the world’s wealth becoming concentrated among a few companies.
The current Internet paradigm is one where the centralized collection and monetization of consumer data powers Big Tech and disempowers individuals. It deprives people of meaningful control of their data, control over its uses, and profit from the data’s value.
Up to now, privacy law hasn’t been much real help, has it? What we’ve seen is that privacy laws have largely failed to reign in platforms’ exploitation of consumer data, much less to address the automated, growing imbalance of consumer exploitation and platform benefit. Speaking broadly, privacy regimes have tried to address these issues by requiring “notice and consent.” In other words, the laws generally require data “controllers” (the companies) to provide consumers with elaborate notices and get varying levels of consent to process that data.
On the whole, it doesn’t seem to be working well. It’s just too cumbersome a system, and it misses the point that without data security and without ownership and control of consumer data in the hands of consumers, information and economic asymmetry will eventually overwhelm our society.
But a possible new path is catching our attention.
The Trend toward Decentralization: Web 3.0
Blockchain and distributed ledger technologies on the rise, and along with them comes the promise of “Web 3.0,” a decentralized and fair internet where individuals control their own data and identities.
IBM provides a good written overview of the underlying technologies here:
We also recommend watching a great documentary called “Cryptopia,” which contains an easy-to-understand segment that visually analogizes blockchains to safe-deposit box vaults in which each safe-deposit box is transparent, and anyone can record or see exactly what is in each box and what transfers that are made between the boxes.
You can watch “Cryptopia” on Amazon Prime or by clicking on the following link:
In essence, a blockchain is composed of blocks that function like safe-deposit boxes for whatever is stored inside each block (e.g. a Bitcoin for the Bitcoin blockchain, or Ether and code for the Ethereum blockchain). Whoever has control of a block also has control of what is inside it and can decide to transfer or share the contents by using a private cryptographic key—like the private key one would use to open a safe-deposit box. Only with the private key and a block’s public key—like the bank’s key to a safe-deposit box—can the contents be transferred.
We believe that having a persistent, distributed, tamper-resistant, cryptographically secure database would signal a paradigm shift for digital privacy. On a decentralized web, an individual could take sovereign control over her data simply by establishing a blockchain based pseudonymized identity (e.g. a “wallet”), which she could then use to make her own decisions about how her data is used and shared. Having such individual ownership and control over data and strong security also offers opportunities for individual compensation related to data use. We have previously written about data dignity—the concept that individuals have moral rights to their personal information and therefore should be paid for its use here:
We predict that in the next 5 to 10 years, decentralized infrastructure and application platforms will displace tightly-centralized tech colossi, and individuals will be able, practically, to be compensated for their data.
In fact, this is already starting to happen.
Hosch & Morris, PLLC is a boutique law firm dedicated to data privacy and protection, cybersecurity, the Internet and technology. Open the Future℠.