Banks have paid us interest in return for holding our money and extracting profits from it. In the process, they became the richest institutions in the world.
Now companies like Google and Facebook have become the world’s richest institutions — by extracting profits from our data rather than our money. But, this time we are getting zero interest in return. Paying a high price when we use products from Facebook, Google, Twitter and other giants who make their money from advertising, we feel they are free. After all, we’re not handing over any cash or tokens in exchange for the services. But, we do pay a very high price for these services — through our personal data.
The reality is that we still need them quite a bit, not least because that’s the way the government regulates the financial industry. But their influence on our personal lives is waning, in large part because they haven’t kept up with the times. “After being in the business of serving banks for the better part of a decade, this has got to be one of the worst industries on the planet for innovation,” says Yodlee chief strategy officer Joe Polverari. “The banks were not willing to enable access to stuff that people wanted as fast as people wanted.”
What’s more, the money that we deposit with banks is insured for even more protection against financial loss. If money is stolen, it is replaced. But, in the case of companies that are dealing with personal data, that unique, valuable asset can’t just be replaced if something goes wrong. When personal information is stolen, there can be long-term, far-reaching effects on the victims.
We use products from Facebook, Google, Twitter and other giants who make their money from advertising, we feel they are free. After all, we’re not handing over any cash or tokens in exchange for the services. But, we do pay a very high price for these services — through our personal data. When we delete it from Facebook, there is no proof the platform doesn’t keep records of it. Meanwhile, many of the startups we hand data to, many of whom go bankrupt, sell it on to generate revenue. So, perhaps there is another solution to the data exploitation problem.
Not only are we losing the monetary value that resides in the data itself, but the misuse of that data can cost us dearly in other areas of our life — through fraud, power imbalances and privacy violations. That’s why “free” companies like Facebook and Google need to treat our data like banks treat our money.
Blockchain technology was originally designed to disrupt financial systems and change how money is controlled. By applying the same decentralization principles, the personal data ecosystem looks set to be disrupted in the same way. New business models and applications will soon emerge that give control to individuals. Data wallets will determine who has access to our data, and we’ll be able to turn off that access when we choose. There will be proof on a blockchain that Facebook can no longer see our data.