With recent news on a café in Japan offering coffee for your personal data, the response by many readers was alarm. The Japanese chain Shiru Café has made much success with students providing personal ID information name, date of birth, in exchange for a beverage after registration. It is important to give the concept a second thought since many of these young customers will be using café Wi-Fi to log in to social media sites such as Facebook, Twitter, and Linkedin where they freely provide much personal data. Some companies have been looking at ways to ensure the personal data is still protected in this process while ensuring both parties benefit. The blockchain is a natural response to the problem as its anonymity ensure the privacy of data, incentivization through the option of tokens and trust will be built between the customer and the company.
Instead of only having the option of potentially opting out of data harvesting when opening a new account on Facebook, Twitter etc., blockchain technology provides a different solution to create a culture of “opting in”. Here customers choose what to share and when to share it, rather than handing everything over to corporations and hoping it isn’t misused or lost. To move from opt-out to opt-in will happen on the ground level where companies like MYIAX are already operating in the advertising space to improve the contract trading process. As well, iProdoos is hoping to create the future of entertainment by combining content, crowdfunding and social media using blockchain technology. The concerning payment and attribution for content find solutions. One company is Po.et founded by Jarrod Dicker, former Head of Project Management at Huffington Post that has been working to make blockchain help to reconcile content creation with a fairer more transparent system for attribution and compensation. As a result, the business model will change from the young freshman student trading his personal data for a coffee to something less menacing.
One brilliant company ahead of the pack has already created a win win win scenario. One use case is the Brave Browser, who are keeping advertisers in tune with consumers while also creating an opt-in culture for users. When Brave Browser users view ads and content on a publication, both the users and the publishers are rewarded with Basic Attention Tokens. The individual consumer’s data like that of the young freshman student will never leave his device. Considering the increased pressure on companies trading in the European Union to comply with GDPR, the concept will help push forward the realization that trust, and privacy can be manifested into a real product that profits investors, consumers, and businesses. As Facebook continues to receive scrutiny from the SEC, the stage continues to open for new startups that can promise more trust to the consumer.
There are other products that provide blockchain based copyright certification. Another is Binded which helps track the usage of your content online, monitor infringements and take respective action for the fraction of the cost associated with registering IP rights with a traditional authority. The problem with cybersecurity products is that they only provide information after the damage has been done after a hacking. With larger corporations and banks there is no luxury of permitted the risk cyber security products bring on. Detecting malware and working to remove it is expensive, time-consuming and does not ensure your data was not taken.
All the companies discussed above an integrate the token option to provide incentive. A perfect existing example is Indorse where tokenization can be applied to the social media network space.
A simple explanation of tokenomics is ultimately the use of tokens within an ecosystem allowing people to exchange goods and services within the community. A well-designed token will have utility within the ecosystem, resist inflationary pressures, scalable, stores value, fungible, traded on an exchange and incentivized. A hard cap on the number of tokens ensures inflation will not be harming the value. One concern is that tokens run the risk of entering the hands of a hoarder who expects the value to appreciate when in fact such an act will slowly break down the economy.
While Linkedin collects personal information on one’s professional history, the user does not see immediate profit from sharing that sensitive data. Even though Linkedin has been an incredible tool for many in tech spaces tokenization can benefit the user experience. Indorse leverages blockchain to allow users to remain in control and profit from sharing their data and being active on the platform. Profile holders can purchase token called IDS, once their skills are validated through an endorsement, increasing one’s score. The value IDS tokens are based on advertising revenues for that quarter, where users are permitted to cash those tokens out at any time. The company already boasts 1800 contributors, it launched upon raising 9 million dollars.
Smart contracts can also be made useful in this case. Automatically enforcing licensing agreements for your content, the individual has the power to create their own terms without involving a third party that will only take your money for unnecessary middleman work. Since smart contracts are unhackable public ledgers they contain all information related to a piece of content. In the case of artists, they can digitally inscribe their rights into their songs and control its further distribution.
Moreover, there is an alternative to sharing data freely that is just as easy. With blockchain technology integrated into social media platforms, consumers will no longer feel exploited for personal data and fear a loss of control. While the option of tokens provides a commitment to the success of the company as the customer is rewarded for supporting the community.
Written by Shermineh Saleh Esmati
As the CEO and founder of Cyrus BC Inc. Shermineh provides advisory services to promote the interests of her clients through the application of innovative products. One focus of Cyrus BC is to bring deliverable blockchain initiatives to the attention of investors focused on the security and socio-economic benefits of the technology.
With a background in foreign policy and intelligence analysis, Shermineh has been using her grasp of geopolitics to aid blockchain companies to best pursue growth while respecting international cryptocurrency regulations and blockchain policy. To ensure the expedited adoption of fintech products she is working with Blockchain Intelligence Group, New Economies DLT and building collaborative efforts for AI blockchain projects soon to be announced.
Shermineh has experience advising intelligence agencies, political leaders, management consultancies and human rights organizations. In the pursuit of developing an expertise in international security, Shermineh obtained her bachelor’s degree with a Specialist in Political Science at the University of Toronto and is completing her master’s degree in Government at Harvard University. To further Canada’s efforts in emerging technology she is also a member of the Blockchain Association of Canada and an Advisor to the Open Source Data Committee at the Treasury Board Secretariat in Ottawa, Canada.