Recent Gallup research indicates that institutional data security is not a major concern for most people, with nearly 80% of millennials, Gen Xers, baby boomers, and traditionalists saying that they have “some or “a lot” of trust in institutions (primarily banks) to keep their personal information secure. However, when it comes to data privacy just 44% of millennials indicated they trust that “all” or “most of the time” companies they do business with keep their personal information private. Gen Xers (32%), Baby Boomers (32%) and traditionalists (29%) all came in with significantly lower trust levels than millennials when it comes to data privacy trust. However, despite the comparatively low level of trust that all age groups have when it comes to data privacy, Pew Research indicates that 69% of American adults use some form of social media or online services, representing a fourteen fold increase since 2005 with every age demographic increasing substantially over the years, from as low as 1% of adults aged 65+ in 2006 to 37% in 2018.Contrasted with research that show 91% of American adults “agree” or “strongly agree” that consumers have lost control over how personal information is collected and used by companies, with only 34% agreeing or strongly agreeing that “it is a good thing for society if people believe that someone is keeping an eye on the things they do online.” Additionally, 61% of American adults “disagree” or “strongly disagree” with the statement: “I appreciate that online services are more efficient because of the increased access they have to my personal data,” with over 55% agreeing or strongly agreeing with the statement: “I am willing to share some information about myself with companies in order to use online services for free.” Finally, the research indicates that when it comes to management of personal information, 61% of American adults “would like to do more,” but only 24% believe it is easy to be anonymous online.
Blockchain Solutions to Centralization and Anonymity
Given the premise that people still care about their data privacy coupled with the Cambridge Analytica breach as the most recent example, data privacy innovation should focus on the infrastructure provided by distributed ledger technology. Specifically, the decentralized nature of the blockchain removes the centralized storage and commoditization of personally identifiable information of private or public conglomerates while maintaining the traditional self-regulatory focus of U.S. privacy law and principles.
The blockchain and its related technological capabilities have the ability to put user control back into the hands of individuals through decentralized ledger information, increasingly sophisticated anonymization smart contract protocols, privacy coins, and crypto vault information storage.
Summary of the ways in which the blockchain is revolutionizing privacy concerns:
- Private Smart contracts focus on zero-knowledge proofs that enable contracting parties to verify properties of data that underlie their transactions without revealing personal information embedded in the data and off-chain protocols for various aspects of dispute resolution (underlying public smart contracts are negotiated offline).
- Privacy coins are the antithesis to centralized banking’s financial tracking systems. Centralization affects the methods and efficiencies of transactional relationships, profiling for targeted marketing, and the susceptibility of mass information theft. Privacy coins use multiple authorization signatures to maintain the privacy of the sender and recipient (ring signatures), cryptographic algorithms to confirm input-outputs without revealing transaction data (ring confidential transactions), and stealth addresses for pseudonymization of transaction routing.
- Crypto vault storage focuses on innovative digital asset storage solutions that blend intricate cryptography methods for access key generation with procedures to segregate hardware storage devices, combined with multiple control methods for component distribution and reconstruction, then finished off with physical vault storage.
The statistics bear out the claim that Americans of all age demographics care about data security and privacy but not to the extent that it has undermined their usage of social media, online retailers, or provided personal information as part of obtaining services or access to services. Rather it appears that most people want to want to do more to manage and protect their information but believe they can’t do it on their own. Blockchain is on its way to becoming that solution.