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Blockchains a boon for user privacy?
February 14, 2017

Blockchains (the basis of Bitcoin) offer users more - yet in some ways less - control over their data. We're likely to see their increased presence within apps, so what's the rub for developers? 

 


Big Data is snowballing. 90% of all data was produced in the last two years. Facebook alone has collected 300 petabytes of personal data since its inception, a hundred times the amount the Library of Congress was able to collect in two centuries! Understandably, there’s growing concern about the user privacy – especially users of apps. Apps often collect large amounts of information governed by privacy policies that are not closely read.

 

Three issues that often concern users of mobile apps are:

Ownership of data: Very often by accepting the terms of the installation, users are passing over the ownership of any data submitted in the app.

Transparency of the data and control of how it’s used: The user loses track of his data and can’t see how’s it’s used and by whom and even whether that’s being done in accordance with the privacy policy.

Access control: At the time of installation, the user must grant a set of permissions to the app. Some of these permissions are granted indefinitely and the only way to change them is to uninstall the app.

 

Enter the blockchain, most well known as the basis of cyrptocurrencies such as Bitcoin and Ethereum. The same mobile app built on a blockchain would deal with these in a completely different manner:

Ownership of data: The blockchain app can guarantee that users have 100% control of their personal data. The system would recognize users as the owners of data and the app owners as guests with delegated permissions.

Transparency of data and control: Each user can seamlessly see how the data is gathered and who has access to it.

Access control: At any time, the user can change the set of permissions and revoke access to previously harvested data, even retrospectively.


On the other hand, the philosophy of the blockchain is that of tracing. Blockchains change the rules of the game: less centralization, less authority, more sharing. There is no longer any sensitive data on centralized servers but there’s always tracing.

In a blockchain, the massive collection of data takes place according to a logical sequence strictly timestamped, a sequence of blocks that remains for life. So is freezing data in a blockchain better for privacy than leaving them on a company’s remote server? Not necessarily – and this will remain an issue until the privacy of these blocks “frozen in time” is properly addressed. This is a pioneering area of software development which is developing rapidly and in which we are taking a keen interest.

The rub of all this for companies who wish to develop apps, is how will this affect the collection of important data that they rely on for strategic decisions. We suggest that it will become ever more critical to stress the reasons particular data is needed and to guarantee the de-identification or aggregation of data to keep user anonymity.