Infinity Blockchain Ventures APAC head, Nicole Nguyen, shares insights on data ownership and how blockchain could tilt the balance of power in favour of the end user.
Since the advent of the internet, users have marvelled at the ability to create an online persona – be it in the first virtual communities, social networks, retail sites and multi-player games. Increasingly, a greater proportion of our personal lives and information can now be found on digital platforms.
Along with emerging technologies such as the Internet of Things (IoT), 5G and Artificial Intelligence (AI), we can only expect that generated data, particularly of the individual, will increase exponentially. In fact, the global datasphere is projected to hit a staggering 163 Zettabytes (163 trillion GB) in 2025, according to a recent IDC-Seagate study.
Even as data continues its exponential increase, recent cyber breaches and incidents around the misuse of user data have also cast the spotlight on the ownership of user data and how blockchain is disrupting this.
Growing concern over data ownership
The notion of one’s identity in the online world has evolved over time – once solely defined by a username and password, the increased integration of social media profiles, shopping history and other personal data has meant that our digital identity is fast becoming a reflection of our physical lives.
Such data can be beneficial for businesses to better understand their customers and provide tailored services and offerings for an improved overall customer experience, particularly in e-commerce.
However, an issue arises when individuals no longer have control over how their data is used and collected, particularly in the scenario where organisations monetise user data without the user’s knowledge or request for more personal information than required.
It’s unsurprising that consumers are increasingly becoming concerned about how their data is used and shared, and policies such as the European Union’s recent General Data Protection Regulation (GDPR) are also a reflection of the growing demand for greater ownership over personal data.
Gaining a foothold on your data
Blockchain, a technology that has seen success in cryptocurrency through its security, efficiency and non-centralised control, can help to democratise data and put ownership back into the hands of users.
As compared to the current practices where ownership of user data is held by the enterprise, blockchain would enable the creation of a self-sovereign identity, where individuals control their own identities and personal data and are able to decide who to share it with, and to what extent.
In addition, blockchain offers the possibility of micro-incentivising people to share data at their own will, which can significantly disrupt current ways of working for industries such as advertising, marketing, content production and event management.
Organisations will need to come to terms with this new reality and be aligned with the changing mindsets and desires of their users when it comes to the management of personal data. While a self-sovereign identity enabled by blockchain could revolutionise how personal data is managed, a few challenges remain.
For starters, the burden of managing and allocating access would have to be borne by the individual. Education would be crucial to familiarise users with treating and managing data as assets that they now control and use to their benefit. Additionally, users themselves should be aware of the pros and cons of self-managing their data, rather than having organisations manage these on their behalf.
At the broader level, this new approach also requires organisations to evaluate and adapt existing systems to ensure compatibility and that they continue to deliver the same user-friendly experience for their users.
Despite the hurdles, blockchain will undoubtedly bring about changes to personal data and digital identities as barriers to adoption gradually decrease for both enterprises and individual consumers. Given the rallying call for organisations to be more open about the data they collect and how it is used, organisations will need to be prepared for a future where data acquisition is dependent on the conditions of users.
Blockchain may pave the way to a future where large scale cyber breaches involving millions of stolen personal identities could be a thing of the past. Organisations too will need to evolve accordingly and bear responsibility for the just use and management of user data. After all, personal data belongs solely to the individual, and blockchain might well enable users to regain that control.
Nicole Nguyen will speak about the challenges of blockchain adoption at the upcoming ConnecTechAsia Summit in Singapore, set to take place from 26-28 June 2018 at Marina Bay Sands.