Facebook's Data Scandal Brings Blockchain to the Spotlight

Before Mark Zuckerberg’s testimony to Congress, Facebook stated that it had disabled the search tools “malicious actors” had used to collect information on most of its 2 billion users. “But this vulnerability remains,” says Pawan Deshpande, founder and chief executive of Curata, “I know because I invented it.” 14 years ago, as an undergraduate at MIT, Mr. Deshpand was frustrated with the amount time he was spending trying to connect with the largest number “friends” on the then-nascent Facebook. His need for speed was the mother of an invention he co-created for Microsoft that allowed “mining” of users’ shared data.

 

In order to uncover identities of Facebook users all that is needed, Mr. Deshpande explained, is to create an email account on any service, fill its address book with email addresses of intended targets and then upload those contacts into Facebook. Identities of users with matching email addresses will then be revealed. Mr. Deshpande points out that millions of email addresses are available for purchase on the dark web. A more complicated enhancement of this technique to influence a specific voter or lawmaker involves guessing “thousands of possible permutations of the victim’s email address.”

 

Schumpeter quotes a popular meme: “if data are the new oil, then Facebook’s Cambridge Analytica fiasco is the equivalent of Deepwater Horizon.” It then follows that artificial intelligence (AI) is the internal combustion engine of the technological revolution. User data is the fuel of the big technology companies. Without oil, we'd be better off with a horse; without data, human cognition beats a computer. Facebook, with its 2 billion users worldwide is the Standard Oil of data today. When asked by Senator Lindsey Graham (R-S.C.) who his biggest competitor is, Mark Zuckerberg said, “I think the categories of -- did you want just one? I'm not sure I can give one, but can I give a bunch?”

 

To Senator Graham’s question about regulation of Facebook, “You think the Europeans had it right?” Mr. Zuckerberg responded, “I think they get things right.” Senator Graham was referring to the European Union General Data Protection Regulations (GDPR) which come into effect on May 25th. Under GDPR, fines for mishandling personal information can be set as high as 4% of global revenue. That means a further misstep by Facebook could cost it upwards of $1.6 billion.

 

Artificial intelligence technology and its benefits are available to those companies that can now afford it. Amazon makes significant use of AI and now controls 40% of American online commerce. Because of its success and profitability, Amazon can afford more AI and stands to continue to increase its market share. The largest firms that have the resources to invest in AI stand to attract more customers by offering lower prices and putting smaller competitors out of business. Those same firms have access to the most customer data to fuel their artificial intelligence engines.

 

With blockchain technology, smaller companies and individuals who wish to use AI for decision-making may soon be able to. The Senno Network was designed to address the major barriers to data gathering, and scaling in sentiment analysis. Sentiment analysis is widely applied to understand customer's perception of a company, brand or product through data gathered from social media, reviews, and online surveys for applications that range from building successful marketing campaigns to customer service to financial decisions and company restructuring. Senno is the first sentiment analysis platform built on a decentralized ledger. Using the NEO platform, Senno will provide an open application programming interface (API) and software development kit (SDK) for sophisticated business intelligence analytics. The Senno digital coin (SENNO) is in pre-sale until the end of April. SENNO will be used to reward hardware contributors and software developers, as well as commission affiliates that send referrals. Senno will enable both companies and individuals to receive real-time indications of public opinion and changes in sentiment. 

 

Access to information today is facing a similar need for balance between the benefits of immediate access to essential information and the potential for abuse of that access by hackers, profiteers, and other digital invaders. The use of blockchain and distributed ledger technology to allow individual users and smaller companies access to a commodity they would not otherwise be able to afford resembles the structure of rural water, electrical and telecommunication cooperatives. As part of the New Deal, the US government made loans to rural communities and established the Rural Electrification Administration (REA) in order to regulate those utilities. Each cooperative customer is also an owner of the cooperative utility, has control over how revenues are used and is entitled to distributed dividends. Electrical cooperatives were established in areas where private and investor-owned utilities would not expand because those areas were seen as potentially unprofitable.

 

Each new technological advancement, along with its benefits, brings with it new challenges for government regulation and legislation, corporate customer and employee relations and to the rights of individual users of the technology. Water, sewer, electric and telecommunication utilities came under government regulation as their services were recognized as necessities. The trend toward monopolization of personal data may require adaptations, accommodations and regulation, as have other technological advancements. If data becomes recognized as a commodity like water, oil or electricity, then regulation by the FTC, SEC, CFTC or some new government agency may in the offing. Europe is leading the way with the GDPR, which goes into effect in May and the U. S. may follow. If corporate titans like Mark Zuckerberg of Facebook agree with Tim Cook of Apple that “privacy is a human right,” then individuals may have not only a right to control the use of their own data, but they may also have a right to access the stream of data that is available to large corporations. For now, it is up to the individual user to be aware and beware of the potential problems, pitfalls, and price of accessing desired information online and sharing their own in order to do so.