June 2nd 2020
President and Co-Founder of Anchorage
It is where many of us store personal data and financial information. In just twenty-five years, it has become a mainstay of everyday life. And as work-life for many goes virtual in the midst of the COVID-19 pandemic, our reliance on the Internet will only grow.
And yet, despite (or perhaps because of) our collective reliance on it, the Internet is now broken. Disinformation is rampant, privacy is nearly nonexistent, security is tenuous, and we give our personal data away. These are fundamental, intractable problems that will only worsen without our sustained, collective action.
But they are also problems that blockchain technology was tailor-made to solve.
There is a huge overlap between the innovative technical solutions currently emerging in crypto, and the problems endemic to the web today. If technology companies apply even just a few of these innovations, the Internet will become a better, safer place for all of us.
Crypto security protocols Protect us from hackers
First, crypto-native security protocols are already helping people better secure accounts and personal information, keeping sensitive data safe from the likes of hackers.
Since Jack is the CEO of Twitter, many observers assumed this attack was sophisticated and highly coordinated. In reality, it was a simple case of SIM-swapping: one attacker walked into a cell phone store with a fake ID and asked an employee to transfer Jack’s phone number onto their device. At that point, all the attacker had to do was recover access to Jack’s Twitter account via SMS.
Of course, SIM-swapping can lead to far worse outcomes than a few phony tweets. Most people rely on their phone numbers for two-factor authentication and account recovery for things like email inboxes and bank accounts—either of which can be taken over in a similar fashion.
For these reasons—and the fact that crypto holders are prime targets for hackers—most crypto companies no longer rely on phone numbers and text messages for two-factor authentication.
Instead, some crypto platforms leverage new forms of biometric authentication to verify end user identity. These same tools can be used to authenticate users and protect personal data across a broad range of devices and services.
In addition, crypto security concerns have spurred some phone companies to develop purpose-built hardware for safely storing digital assets on mobile devices.
By force of circumstance, the crypto industry has learned to protect itself against the threat of hackers better than most. Now, these innovations can help protect everyone.
Blockchain innovation is bolstering online privacy
Second, advances in cryptography––fueled and enabled by the blockchain industry––can improve privacy protections by preventing the kinds of massive data breaches that have become all-too-common on today’s Internet.
Too many companies, struggling to keep pace with cybersecurity best practices, fail to protect online privacy for individuals. These same companies—companies people entrust with their personal and financial data—have amassed huge online databases of highly sensitive user information. If and when these databases are breached, the results can be catastrophic.
Thanks to crypto, there are much better ways to ensure consumer privacy. Zero-Knowledge proofs, a type of security protocol, were developed by blockchain engineers for the express purpose of reconciling public accountability (maintaining a balanced ledger viewable to everyone) with personal privacy (concealing the identities of parties transacting on the ledger).
In layman’s terms, Zero-Knowledge proofs enable Party A to prove to Party B that they know a secret without ever sharing what that secret is. This allows both parties to verify data without that actual data ever being disclosed.
In the context of enterprise and consumer software, Zero-Knowledge proofs can enable individuals or organizations to prove their identity to applications without those applications ever having to store weak authentication devices like usernames and passwords on their servers. That way, even if a company’s servers are breached, client data remains safe.
In short, Zero-Knowledge proofs have the potential to revolutionize the way we authenticate user identities online and safeguard personal data.
Crypto technology is restoring data sovereignty
Third and finally, more than safeguarding data, blockchain’s decentralized architecture just might be the key to true data sovereignty.
Now more than ever before, many of us are living a significant portion of our lives online. We send photos and videos to friends and family. We store and share important files. We have sensitive business conversations over video chat. Entire conversational histories with colleagues and loved ones are backed up in centralized protocols. The problem here is what happens to all of that information—information that is rightfully ours—when centralized providers fail.
Of course, the problem of data sovereignty is not unique to Yahoo! or Facebook. It is a latent problem for any centralized protocol—the architectural reality for most large technology platforms on today’s internet.
In effect, this means that individuals, organizations, and even governments surrender control of their data to the platforms and applications they pay to use.
Bitcoin, the originating blockchain use case, was pioneered, in response to the 2008 financial crisis, as a means of eliminating over-centralization and single points of failure in the financial system.
Part of its value proposition has been to enable ordinary people to accumulate and protect their own wealth, without centralized intermediaries.
Through the use of unique private keys––randomized sequences of letters and numbers tied to each wallet—holders of Bitcoin (and other digital assets) retain full ownership of their crypto assets, as well as the ability to transact in a peer-to-peer fashion.
Private keys and blockchain networks can help internet platforms and online applications restore data sovereignty to their customers and clientele.
The Internet’s future is still bright
As the Internet has matured into the omnipresent force it is today, it has done incalculable good. It has generated extraordinary wealth for businesses and entrepreneurs. It has become the source of unparalleled convenience.
And it has delivered new educational opportunities for anyone with a connection. But it is by no means perfect. Personal security, privacy, and data sovereignty are just three parts of the internet that stand to be improved. With lessons learned from crypto, the Internet can become a better, safer place.