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How blockchain can protect your personal and payment data

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When the internet first began to proliferate in the 1990s, once unfathomable connections became a ubiquitous reality, transforming the ways people interact, companies conduct business, and governments regulate growth.

It was a brave new world that seemed like it was full of possibility and devoid of risk, and, in many ways, people and companies behaved as such.

Since its inception just three decades ago, almost half of the world’s population has gained access to an internet connection, and, in Australia, nearly 90% of the population has access to the web. What’s more, they are participating in the digital economy at rapidly increasing rates.

Globally, 2.5 quintillion bytes of data are created each day, a staggering figure that is so large that it almost fails to register as a tangible metric.

In the US, a study by the Pew Research Center found that 77% of Americans are online every day and 25% report being online “almost constantly.” This is not an American abstraction. The average Australian is spending the time equivalent of a part-time job online each week.

At the same time, companies are navigating a deluge of data of their own. Enterprise initiatives are using big data to make strategic decisions about inventory, shipping and receiving, financial management, and a seemingly unending array of use cases that are transforming the nature of work, commerce, and everything in between.

Of course, all of this data is created for and stored by the platforms that these users frequent, and that’s where the problem starts.

As TechCrunch notes, in the next several years “the amount of data will increase by a thousandfold, reaching a staggering 44 zettabytes of data. The only logical response to this data deluge is to create more ways to store and maximize all this information.”

If the current climate is any indication, security must become the top priority. A seemingly unending series of high-profile hacks compromised user data and reminded people that the existing internet infrastructure is anything but safe and secure.

A high-stakes security breakdown

Yahoo’s egregious and extensive 2013 breach that compromised three-billion user accounts was alarming, but it was just the tip of the iceberg. Subsequent data thefts or data misuse at prominent companies including Equifax, Uber, and Facebook underscore the scope of the problem.

Equifax, one of the largest credit monitoring bureaus in the world, lost control of the personal data of 145 million customers. While their breach was severe, at least it was widely known. When the ride-hailing newcomer, Uber, was hacked in 2016, the company paid $100,000 to try and cover up the offense.

Moreover, almost everyone is familiar with Facebook’s role in releasing user data to third parties who ultimately used that information to create targeted advertisements that preyed on people’s worst inclinations and eventually helped influence the U.S. presidential election.

In a bizarre and outlandish example of data misuse that hit closer to home, supermarket juggernaut, Woolworths, accessed their users’ data to create profiles that targeted the frequent fliers in their casinos. This overreach is a reminder that user data is vulnerable even when bad actors aren’t responsible for the misuse.

These events are truly only noteworthy because they are the high water marks of a growing trend that is impacting nearly every internet user and every business sector. As a result, there is a shifting sentiment among tech companies and the consumers who populate their platforms.

However, this change isn’t just limited to the business to consumer relationships. It impacts whole industries in problematic ways that require a solution.

More than a consumer problem

It’s time for consumers and companies to own their own data. Although the current internet infrastructure with its sizable centralized databases and data-driven economy doesn’t easily accommodate this reality. However, the emergence of blockchain technology as an enterprise solution for data management alters the possibilities for all parties.

The opportunities are especially intriguing when applied to specific industries.

For instance, the shipping industry, a sector that is particularly important to the Australian economy, can fortify its payment systems by integrating blockchain technology into the existing infrastructure.

As The Guardian notes: “There is no nation on earth in which a viable shipping industry is so important,” so ensuring that the industry doesn’t succumb to its own data disaster is crucial to its success.

Most notably, blockchain can improve the quality of the data while making it more secure and less vulnerable to misuse.

Creating tamper-proof records

The blockchain’s distributed ledger is renowned for its accuracy and immutability. Rather than storing data on centralised servers that are relatively easy to compromise and are subject to manipulation, the blockchain makes it possible to create tamper-proof records that are accessible to all stakeholders.

When it comes to improving the shipping industry, research and consulting firm Deloitte documents its use as a digital tool that “can help participants record price, date, location, quality, certification, and other relevant information to more effectively manage the supply chain.” 

In addition, blockchain technology supports digital payments and rapid data transfers that are impossible using the current web infrastructure. Since the blockchain was first introduced alongside Bitcoin, the first digital currency, it is uniquely adept at facilitating digital payments at the enterprise level.

Other ancillary components like smart contracts create a trustless digital escrow ecosystem that automatically processes payments when certain, predetermined conditions are met.

More secure infrastructure

For the shipping industry, this means that digital payments can automatically accompany the different components of the process.

Taken together, the blockchain offers a more secure infrastructure than the current web-based platforms that dominate the consumer and enterprise landscape.

For companies to remain competitive and secure in this perilous digital age, they must stop hoarding or commodifying user data, but that doesn’t mean that they have to sacrifice effectiveness.

In fact, as the shipping industry demonstrates, the blockchain can improve upon existing systems by expanding their capabilities and protecting the underlying value, the user data that comprises the platform.

Perhaps most notably, this potential isn’t limited to the shipping industry. The blockchain adds value to virtually every sector that data and transactions, which, in the digital age, is to say all of them.

Alastair Johnson is the CEO of Nuggets, an e-commerce payments and ID platform

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