Blockchain Basics 22 – Why Social Media Need Blockchain

Blockchain Basics 22 – Why Social Media Need Blockchain

A Gold Rush For Data

We are Commodities, Not Customers

No longer is content king. Data is the gold of today. It is the core source of value in the online “attention economy.” There is buying and selling in lawless fashion. The aggregators that currently rule it are known in the technology sector as GAFA – Google, Amazon, Facebook, Apple. Recently, Netflix, Uber, Twitter (no, not NUTs) joined the elite ranks.

Data is the commodity and they are the banks. So, how do they mine their riches? By offering the users something for free. But is it really free? To paraphrase a famous quip from cybersecurity guru Bruce Schneier, “You, user, are not Facebook’s customer, you are Facebook’s product.”

It is not mereley collecting data – there is ruthless acquisition, trafficking, bundling, and categorization. Furthermore, sale is for other means of value like audience, advertising, services, or simply for profit. There is little transparency. For this reason, Silicon Valley social media companies continue to wrangle with lawmakers, investors, and the public eyeing them with scrutiny.

Let’s face it, there was a mad dash to put General Data Protection Regulations (GDPR) in place. It brought the Internet to a grinding halt as a direct result of improper data collection for targeting ads. In order for regulations to be effective, enforcement is crucial. However, it seems GDPR has done little to flip the relationship between massive tech companies and the users.

The Systemic Trouble of Social Media

Twitter’s CEO was grilled this year by the United State’s House Energy and Commerce Committee to defend the company from allegations of bias, as well as explain what it’s doing to protect users and curb misinformation. Bad news for Facebook continues to pile up, sending its stock falling 27%. Analysts don’t forecast immediate turnarounds in the social media tech sector either.

As a fact, problems related to user privacy and security appear to be systemic. Veteran tech analyst Michael Robinson of Money Map Press words on Facebook on Yahoo Finance’s The Final Round, “It’s a deeply troubled stock. I don’t know where the bottom is and I am not sure anybody really does.”

Facebook and Twitter’s problems have one common denominator: broad data collection practices and the inability to prevent abuse on its platforms. When it comes to data mining and the sale of data to advertisers, a decentralized ledger would provide transparency and oversight. It would indicate who shares data and revenue and how.

In the case of Instagram, co-founders Kevin Systrom and Mike Krieger resigned in late September amid turmoil on how to further monetize the photo-sharing site. Here blockchain technology would allow it to monetize content. It would distribute data to advertisers in plain sight, then compensate contributors.

However, restructuring these behemoths on a whole new platform is not exactly a motivating factor. It would mean overhauling a highly profitable system for the sake of transparency and compensating users.

Platforms like Facebook and Twitter own hundreds of patents that protect their data assets and methods. However, so does someone (or something) else.

Like Google on Steroids

With its tentacles in nearly every aspect of blockchain development, IBM has either already developed, or is in the process of developing blockchain-based platforms and software for possibly every industry known to man.

The move includes cosmetics to transportation, pharmaceuticals to whole governments. IBM filed for more than 1,900 cloud patents this year alone. It includes one that uses an unstructured data system to monitor news feed, network statistics, weather reports, and even a blockchain-based social network platform.

IBM’s goal to corner the AI market requires data – a lot of it. And, in stealth-like fashion, IBM has also discovered a way to collect, own, and eventually disseminate more data than every social media and streaming giant combined. Think Google times 10 on steroids.

Targeting Regulation

It appeared to some in the financial sector as posturing at an event in Brussels last week. IBM CEO Ginni Rometty called for “targeted regulations on transparency and a crackdown on irresponsible handling of personal data by a few dominant consumer-facing platforms.” Translated, it means, “We’re gunning for you.”

Her statement comes on the heels of a similar one made in Brussels a week before by Apple’s Tim Cook, who iterated that the business of selling ads against personal data has become a “data industrial complex.” Those are fighting words, though he stopped just short of naming tech giants like Facebook and Google in his criticisms.

IBM’s assurance that blockchain technology has the potential to improve trust and confidence in data should pacify regulators. It claims to create effective mechanisms to reward contributors for the content it produces. That IBM can actually control and be trusted with a monopolizing-quantity of data, AI, and future technology remains to be seen.

 

 

 

 

Leave a Reply

Close Menu