This is a piece I wrote for the Anatha publication on Medium >
Privacy as a Red Herring
So
I recently watched the Netflix documentary, “The Great Hack,” which
purports to reveal the nefarious things Facebook and Cambridge Analytica
have done with our data. It seems these companies used our information
to sell us things — in particular, to sell us a world view that
supported a certain candidate in an election. Egad!
What
the film, in its achingly obvious and predetermined sanctimony, fails
to talk about is that these companies — Facebook and Cambridge Analytica
along with Google, 23andMe, etc — sell our data without sharing any of
the wealth with us. Another way to say this is that these companies
steal our property, generating such absurdly vast wealth — for
themselves.
Now,
the film’s presumed whistleblower, Brittany Kaiser, repeatedly says
this to the camera. But the film ignores this thread, focusing on how
one or two companies seem to have been unethical in how they used our
data. No mention of massive theft. No mention of financial retribution.
No mention of Ms. Kaiser’s campaign, #OwnYourData. Instead, the film
turns the systematic, institutional pillaging of our data into a few
instances of bad behavior.
Which of course is precisely what Facebook wants. As long as the conversation is about data privacy, not data property,
all it has to do is amend some terms of service, perhaps pay some
fines, while its immense coffers remain untouched. The audience feels
outraged. But the real question — whose property is this data? — remains unasked.
What is the Information Resource Economy?
As Edward Hickman, the CEO of Anatha, argues we are living in an information age economy — a resource economy of information.
That is, information has become the most valuable asset in the planet —
more than oil — propelling what are now the richest companies in the
world.
We
all know this. We are not an economy of manufacturing; we are an
economy of data. The biggest companies in the world, such as Google and
Facebook, don’t make much. In fact, the things they make — software —
they mostly give away for free. They make their money by selling
information. But here’s the odd thing: it’s not their information they’re selling. It’s ours. And
yet when we talk about data today, the discussion is never about
property — and its theft by these companies — but always about privacy.
In
the age of smart devices, consider for a moment all the data you
(potentially) generate that is used and sold for enormous profits. Take
your driving: where you drive, how fast your drive, what car you drive,
how often you buy a new car, how often you repair your car. Now clothes:
what clothes you buy, how much research you do before you buy, when you
buy them, where you buy them, why you buy them. Your music, your food
habits, your home buying, your DNA, your voting, what you read and
watch: all this is your data that companies want, that they gather and
sell.
And
yet we don’t share in any of the tremendous wealth that our data
generates. And, what’s stranger, we even pay to give our data away. Just
think about companies like 23andMe. People pay to give their DNA to a
company which turns and sells it to pharmaceutical companies.
Now,
I understand that 23andMe provides a service that costs the company
money. The same is true of Google and Facebook: they spend money
creating software that we use and should therefore be compensated. Of
course. But should they own 100% of the profits our data generates —
data that we literally create?
What
I’m saying is that we are experiencing a dramatic shift in the global
economy. Whereas resources such as oil and metals dominated the economy
for decades, information is now the most valuable asset. And where does
this data reside? In each of us, individually. Every person alive is a
kind of oil well, an enormous and continuous source of this sought-after
resource. Each person is now their own source of wealth generation. The
question is: Who gets to enjoy this wealth?
I
understand that legally defining the limits of data property can be
tricky. After all, if I’m using Facebook’s software stored on their
servers, why isn’t it their data? I understand that, perhaps, this needs
to be worked out by the courts.
But
there’s a better solution: it can be worked out by the market via new
economic tools in which individuals not only control their data, they share in the value it generates.
Consider for a moment that the the country of Iceland sold the DNA of
its population to Roche for $200M which, I believe, it shared back with
its citizens.
What
if there were a new social media app in which all users were
stakeholders? Where you shared in the wealth generated by your activity,
by the content you created? Wouldn’t we all use that one? We don’t need
the courts. We need new applications — and new economic tools to drive
them.
Enter Information Age Economic Tools: Blockchain & Decentralization
Try
to picture Facebook, Google, Uber, Twitter, Yelp suddenly shifting
their economic model and sharing the wealth they generate selling your
data. Well, it’d be complicated — technologically and practically
speaking. All those unique contracts between the company and its two
billion users. Oy!
Now
try to picture the complexities of actually sharing that wealth with
you. All those different currencies, each with its own set of
regulations that change nation to nation. The fact is: it’s hard for me
to even get paid by my clients. They issue a check from a bank that
holds their money; they send that to me; I then go to another bank that
holds my money. If my client chooses to wire me money rather than send a
paper check — yes, most payments are still done via paper checks — then
there are other intermediaries overseeing and managing that flow of
funds. We take this process so for granted that we never even consider
it odd that all these intermediaries — multiple banks and payment
services, each with their own legal regulations — have to manage an
exchange between two parties, my client and me.
Why
can’t my client just pay me directly? Because that’s not how our
centralized economy of government run fiat currency functions.
Everything has to be run through a central point.
Blockchain
technology, along with other means of decentralization both known and
yet-known, proffer a different model. Currencies are no longer managed
by a central party such as a government or corporation. Rather, each
runs independently, according to rules set forth from the get go (if you
don’t like the rules, use a different currency; yes, cryptocurrencies
make currency itself multiple and competitive). So payments are
peer-to-peer. No need for the bevy of intermediaries that carry money
from one person to another — no need for banks, no need for financial
services such as VISA, no third parties siphoning off money just so my
client can pay me.
At the heart of these currencies is what people call a smart contract.
A smart contract is an automated, computer-run set of transactions
between parties that needs no third-party to oversee or execute it. It
executes itself. As Blockgeeks
define it: “Smart contracts help you exchange money, property, shares,
or anything of value in a transparent, conflict-free way while avoiding
the services of a middleman. The best way to describe smart contracts is
to compare the technology to a vending machine. Ordinarily, you would
go to a lawyer or a notary, pay them, and wait while you get the
document. With smart contracts, you simply drop a bitcoin into the
vending machine (i.e. ledger), and your escrow, driver’s license, or
whatever drops into your account."
So
now picture a social media company, such a new version of Facebook,
that is run on a decentralized platform. When you sign up, you agree to
certain terms — what data you’ll share and sell (if any) and what data
you won’t. Based on these terms, as the company manages and sells your
data, real spendable value is returned to you. It’s all worked out by
the smart contract as payment is delivered directly from the company —
that is to say, from the network or DAO (decentralized autonomous
organization) — to you.
And
while you’re probably thinking that the company would inevitably try to
screw you over, two aspects of such decentralized technologies are
immutability and transparency. As all transactions — the exchange of
data and currency — happens on the blockchain, they are all recorded for
anyone to see (transparent). There is no way to tamper with it, no way
to embezzle (immutable). This is why these networks and contracts are
called trustless — not because you don’t trust anyone but because you don’t need to trust anyone. The code executes the terms of the deal without anyone getting involved.
Suddenly,
all technological and bureaucratic obstacles are removed. As the
information resource economy is as distributed and decentralized as
human beings are, the blockchain offers distributed, decentralized
economic tools, readily distributing wealth as information is created
and shared.
Now
picture your own digital identity that moves between apps, smart
devices, and currencies. At each step, you control what data you share
and what you don’t while you share in whatever value your data generates
— automatically.
And
voilĂ : now every person on the planet who so chooses is suddenly
participating in the vast wealth creation that is the information
economy. And, together, we all flourish.
Some years in the future, we’ll look back at this time as the age of the Information Robber Barons. Do you remember Facebook, we’ll ask each other, that company that so relentlessly stole our data to get rich? That was nuts! I wonder what happened to them.