- The image of cryptocurrency tends to focus on privilege and flaunted wealth.
- Financial institutions dismiss Bitcoin as a fad, while exploiting the benefits of the underlying technology for themselves.
- But the story in developing countries paints a different picture – one of vast potential.
- The world has recently been exposed to the dark side of social media as our personal information is shared with corporations, oftentimes without our knowledge.
- Netflix's "The Great Hack" covers the now-famous Cambridge Analytica scandal and paints a picture of our current privacy landscape.
- Blockchain and other decentralized ledger technologies could be the answer for increasing data security and transparency.
The world promised by the internet and social media is one where physical barriers are a thing of the past and communication is instantaneous. The current reality has some of that promise, with communication faster and better than ever before. However, along with this ease of communication comes a dark side that we have only recently been exposed to. In order to power our instant messaging, personalized newsfeeds, and one-click shopping, we have agreed to lease out our personal information, even data we are unaware of, to corporations which are singularly focused on maintaining their bottom lines at all costs.
The recent Netflix documentary, "The Great Hack", covers the Cambridge Analytica scandal, a breach that saw the information of millions of unwitting Facebook users exposed and exploited for political gain. The documentary focuses on a specific case, but the lessons it imparts and the picture it paints of our current privacy landscape are chilling, to say the least. We are more exposed to corporations' whims today than we have ever been, and they are increasingly willing to leverage the massive troves of data they have spent years collecting from us.
Our unfortunate status quo is not completely bleak, however. This emerging awareness about the precarious state of our privacy and data security has led to a mass movement that seeks to restore the balance. Data analytics, and especially predictive analytics, are key cogs in our tech future. They offer a significant upgrade for our ability to understand our world. However, the benefits of these technologies must be tempered with a real focus on users' privacy.
Are Data Analytics Catalyzing Dystopia?
There is not a shadow of a doubt that data is quickly becoming the most important commodity in the world. Beyond consumer data, every single industry and service produces troves of data every day. According to the world economic forum, a single connected car alone produces 4 terabytes of data daily, while Facebook itself generates 4 petabytes of data. The WEF estimates that by 2025, we will produce 463 exabytes of data worldwide, every day. In this climate, user data plays a particularly important role.
For corporations like Facebook, Amazon, Netflix, and Apple—as well as myriad smaller companies—user data is a foundational aspect of their business model. Improving content algorithms, tailoring ads, and providing more personalized experiences are all made possible by this data, though this is only the positive side.
The power of predictive analytics, as evidenced by "The Great Hack", is that this stockpile of user data—which includes everything we do online, from search terms to clicks and even our friends' activities—can be used for other, more nefarious purposes. In Cambridge Analytica's case, it was used to drive voters towards the Brexit and Trump campaigns by presenting tailored, biased content that reinforced the campaigns' points.
More importantly, however, are the emerging concerns about data security and analytics. With the number of companies that hold some or all our private information, the fact that there have been so relatively few breaches is surprising. Even so, a single breach—such as Cambridge Analytica—can expose the data of millions of users, many times without them being aware of it. In this environment, finding alternatives that do not hamper analytics but protect users is increasingly challenging, though not impossible.
The Future Is Not All Bad
The future of data is undoubtedly concerning, though it is not necessarily all dark. Technologies like blockchain and decentralized ledgers offer an alternative that provides a potential infrastructure for analytics that respects data privacy and security. The current ecosystem clearly benefits a small group of data holders and users—corporations.
Facebook, Google, Amazon, and others' terms and conditions give them almost exclusive access to users' personal data to use as they see fit, and unless it clearly benefits them—as in the Cambridge Analytica case—they are loath to share their capability. With such a dearth of access to valuable data, researchers, small businesses, and even private individuals have limited analytics capabilities. Moreover, they must trust the security of their data to researchers who are not concerned with their privacy or data safety.
Blockchain and DLT support an alternative that could deliver greater transparency and easier access to data and the tools needed for analysis thanks to their decentralized structure. One of the major complaints users and advocates have regarding major corporations' use of data is their lack of transparency about how data is collected, used, and with whom it is shared. Here, decentralized ledgers offer a seemingly ready-made response. By their nature, DLT systems make data transparent as any transaction or operation is instantly synced across every node in a network. Although reality does not always align with this theory, it does offer a greater guarantee that users can see how their data is being used.
Additionally, while major corporations continue to be hit and blindsided by data breaches and hacks, blockchain data storage promises to be more secure thanks to its encryption standards and the difficulty of breaching blockchains themselves. While this also remains largely theoretical due to the relative recency of the technology and its still-unproven claims, it could provide researchers significantly safer and better access to data analytics tools.
Avoiding the Dystopian Data Future
Users are decidedly behind in terms of protecting their data from corporations. We have already given away the keys to the kingdom, so to speak, but it does not have to be a permanent arrangement. The current landscape is undoubtedly dark—our data is in the hands of corporations which are all too happy to use it for any purpose that may enrich them—but it can become brighter. Should new alternatives to the current analytics and big data models prove worthy and effective, we could see a major shift in access and transparency when it comes to our data and how it's invariably monetized.
- Bitcoin has long been the king of the cryptocurrency market.
- New coins and tokens have shaken up the status quo with unique use cases and innovations.
- Bitcoin has responded with its own improvements, leading to a healthier market.
Recently, Tron appears to have been at the center of the latest fake news scandal to hit the crypto world. It started on July 8, after Twitter user Hayden Otto posted a tweet stating that Chinese police were raiding the Tron offices in Beijing. The accompanying video initially seemed credible, showing uniformed police in an office that also displayed the Tron logo. The implication was that police were raiding Tron for participating in a scam.
However, this was far from truth, as Tron founder Justin Sun quickly jumped in to clarify. Protesters had stormed the offices, after finding out that a project called Wave Field Super Community was actually a Ponzi scheme (the project had associated itself with Tron, despite the company' attempts to dissociate itself). The police presence was, in fact, there to monitor the situation and protect Tron's employees.
Despite fast action on behalf of the company, Tron's price immediately plummeted. The incident wiped over $100m from Tron's total market cap in the space of just a few hours which it later recovered.
A recurring problem
Unfortunately, the Tron incident isn't the first case of fake news plaguing the digital currency space. In May, Primitive Ventures founder Dovey Wan outed a fake news scam in China. The report appeared to indicate that Craig Wright had transferred funds out of a BTC wallet known to belong to Satoshi Nakamoto and transferred it to Binance, thereby confirming that Craig Wright is indeed Satoshi.
This relates to an ongoing point of contention between Craig Wright and Binance founder Changpeng Zhao (CZ). The latter had delisted Craig Wright's Bitcoin SV coin from Binance a few months back following Wright's repeated (and unproven) claims that he was Satoshi Nakamoto. Again, the fake news had a market impact, as the value of BSV spiked immediately after the "news" broke.
Neither are these new incidents. Back in 2017, a Steemit writer had warned of the market impact of fake news. They cited a story that had circulated, stating that the IOTA project had partnered with Microsoft and Cisco. In fact, IOTA had only been in talks with those companies. The writer warned:
"This is a PRIME example of how virality with news about popular currencies can create massive, artificial pumps that are destined for a short life once the inaccuracy is revealed for what it is."
While some may dismiss these rumors as frivolous, the truth is they can inflict severe damage on markets. Investors can quickly lose trust and dump their holdings, causing markets to nosedive in response. The Tron and Bitcoin SV incidents are illustrative of just how easily this can happen.
Navigating the sea of fake news
It's not just necessarily a crypto problem, although crypto-Twitter seems to be an unhealthy source of truth for many in the industry. One problem with Twitter is that it becomes a breeding ground for fake news because projects are competing with one another. However, one project losing value doesn't equate to others gaining. This isn't how markets operate.
Nevertheless, traditional markets are also often subject to ups and downs depending on rumors and misinformation. Elon Musk caused shockwaves in the financial markets last year when he suddenly tweeted that he was taking Tesla private at $4.20 per share. He wasn't - resulting in the SEC taking swift action against him.
Because of incidents like these, 40% of Americans report fake news as one of their serious concerns in making investment decisions. Even seemingly reputable brands like Walgreens have faced SEC action for misleading investors.
However, crypto is far more volatile in general than the traditional markets, meaning fake news disproportionately affects market swings. With the influx of institutional money into crypto, we need more reliable sources of news and information than just Twitter. If markets continue to fluctuate so violently, it may ultimately cause institutions to pull their money out. This would be catastrophic for the digital asset space, which is only just starting to gain a veneer of credibility with big investors.
Is there an answer?
Some sources, Mark Zuckerberg included, point to artificial intelligence algorithms as the solution to the fake news problem. In the future, it may be possible that crowdsourced intelligence will help to reduce the instances of fake news. But currently, AI algorithms aren't advanced enough to differentiate all the levels of human nuance contained in even the shortest texts.
The cryptocurrency media operates at breakneck speed, resulting in reporters often picking up stories and reporting them as rumors, asking questions later. The mainstream media only tends to report on significant events in crypto and doesn't track every story. Therefore, crypto media needs to take responsibility for putting facts before clickbait headlines.
However, individuals can also take steps to ensure that they are applying reasonable doubt to tweets and clickbait headlines they see online. If you read an outrageous claim online, check multiple sources, and verify the author before sharing it. Check to make sure the website or Twitter account isn't a spoof or a fake. If something seems inauthentic, don't give it the oxygen of publicity.
In the end, there is no easy solution to the fake news problem. It's down to each individual and entity to take responsibility for what they post, what they share, and what they choose to believe and the markets will do what the markets will do. But let's try and make sure that as much as possible is based on facts, rather than fake news.