Note: This blog is written by an external blogger. The views and opinions expressed within this post belong solely to the author.
With the very recent rise of digital money, otherwise called cryptocurrencies, one is forced to acknowledge the past few decades, which have seen the base layer of what made this rise in cryptocurrencies possible. People living in the most remote areas of the world have also started interacting with it. The once underdog technology has successfully managed to affect nearly every aspect of our lives and economy. As believers in the adoption of blockchain and cryptocurrencies, it’s impossible not to draw parallels among the two technologies – The BLOCKCHAIN and the INTERNET!
Most people spend a large part of their days connected to the internet. Sometimes for work, sometimes for their entertainment. Children are growing up believing their online lives are more important than their offline lives. Whether this is a healthy development in the effects of technology in our lives or not is a whole different conversation that I may not be qualified enough to hold. What I do get surprised by, however, is the apparent disconnect between the operation and business practices of big internet-based businesses and their public perception.
The internet companies that affect our lives the most today largely started out as idealist, libertarian organizations with a desire to connect the world in meaningful ways. For the most part, they seem to have succeeded. People across the world today are connected in ways that were unimaginable only a few decades ago. This connection gave rise to beautiful things. Closer relationships, better collaboration across industries, more cultural awareness due to exposure to people from all over the world, and a general sense of a global community. Truly the golden days of the internet.
Idealism, however, can only go so far if it has an obligation to fit within our current social, economic, and political systems. The companies had taken on massive venture capital to grow as fast as possible, and the time to start thinking about monetizing the human connections these companies had facilitated had come. The Silicon Valley start-up mindset of “Build a product first, think about revenues later.” was first seen coming into effect with companies like Google and Facebook. In 2007, Facebook announced the start of Facebook Ads. The same year, amid antitrust concerns from America’s Federal Trade Commission and the European Union, Google bought the digital advertising company DoubleClick for $3.1 billion. That acquisition would fuel Google’s rise to the advertising behemoth that it is today.
Okay, till now, it sounds a little dodgy, but nothing too crazy. So what’s the problem?
The primary objective of any company under capitalism is to increase shareholder profit, quarter after quarter. In 2007, two of the most influential internet companies found a way to do just that. Monetizing human connection in terms of relationships and information, however, is a tricky road to walk. Even more complicated is to keep somehow increasing that revenue every quarter. There’s only a finite amount of value people can derive from being connected to their loved ones.
Piece by piece, the focus changed from human-to-human connection to human-to-application connection. In 2007, if you spent 5 hours a day of your waking time on Facebook, you’d be labelled insane. In 2021, that’s the reality for a large part of the world’s urban population. If not Facebook, then any of the other companies under its umbrella. Nobody can spend hours every single day just in pursuit of connecting with people from different aspects of their lives, so Facebook and others like it had to get creative. Some of the most advanced companies, practices, and minds from all over the world were brought in to solve this problem. The solution it came up with was nearly perfect for its purpose. A set of algorithms that would track almost every single move, across every single website, all the time – for everyone. They would then form unique and individual personas for all of its users, creating data points for exactly what and who they like and dislike, to what degree, why, and so much other data that it’s impossible to mention it all in one article. Facebook now allows users to download a lot of the data that they have about them, and the file sizes usually run into tens of gigs in HTML pages. Even then, Facebook doesn’t give out all the data it has on you, only the things you have submitted willingly. ProPublica identified that Facebook has over 52,000 data points on everyone. Google, along with every other company where people are the products instead of customers, operate on a similar business model. What we need to know is that these companies, by a huge margin, know you better than you know yourself – and they do not have your best interests at heart.
Everyone has a customized scrolling experience on these websites, based on all of the data points collected about you. The Facebook feed would figure out what you already want to see and show you exactly that. Google does the exact same thing with its combination of search, browser, android, and other tools under its belt. It’s very easy for most people to look past it since it all happens disguised as news, information, dog pictures, and other seemingly harmless things. In essence, however, their product as a business is now the control they have over your thoughts.
Selling this influence, otherwise known as “targeted ads”, is what makes them tens of billions of dollars in profit every year. When you control the whole world’s thoughts, you can take money from an organization to bend the world just a little bit according to them. Sounds post-apocalyptic, but it has already been happening for many years. A new set of studies has shown that social media is now the de-facto international battleground for dirty politics. Many other reports of this business model being used for harmful practices en-masse have come out in recent years, not even to mention the psychological effects of being hooked to constant tiny dopamine doses. This is just the situation when these companies safeguard the data and only sell the specific usage of the data to corporations and governments. Imagine what would happen if they started selling the data directly. Or worse, get hacked.
Okay, that sounds heavy. What can we do about it?
At this point, there’s a significant amount of awareness about these big tech companies’ extremely harmful business practices. On a collective level, we can vote and urge our political representatives to understand and regulate these companies more tightly, with privacy at the core of the regulations. The European Union is a good example of it. The EU General Data Protection Regulation (GDPR) went into effect in 2018. The regulation guarantees the protection of your personal data whenever it is collected, along with forcing big tech companies to be much more transparent about their privacy practices.
On a personal level, we can try to understand how the algorithms work and reduce our dependency as much as possible. We can use privacy-focused alternatives like DuckDuckGo instead of Google search, stop or resist using social media, and find focused privacy alternatives for every service these massive companies provide.
We can look at how one of the most popular crypto projects till now, Brave, is solving the problem. Brave is a privacy-focused browser that automatically blocks third-party ads and cookies (the tools used for website trackers). It even offers to pay users when they click and see a promoted or partnered ad in a secure way. A research study analyzing browser privacy by Professor Douglas J. Leith of the University of Dublin reported that Brave had the highest level of privacy of the browsers tested. Brave did not have “any use of identifiers allowing tracking of IP address overtime, and no sharing of the details of web pages visited with backend servers. If there are no ads, how do internet businesses, Brave included, make any money?
Created by the co-founder of Mozilla and Firefox, Brave uses its own Ethereum based cryptocurrency, called Basic Attention Token or BAT, to improve the current business model of online advertising. While it still focuses on the most critical metric for any online advertising business, user attention, Brave utilizes blockchain technology to anonymously and securely track user attention, which translates into rewards for publishers. The makers of BAT indicate that the user’s private data and tracking information is stored only on the user’s device, ensuring that it is anonymous and private. Publishers of digital advertisements are rewarded for user attention with Basic Attention Token. The more efficient their content is at generating sustained user attention, the greater the publisher’s revenue becomes. At the same time, advertisers earn a better return on investment. Brave also utilizes anonymous user attention data to assist advertisers with targeting and fraud reduction.
In terms of BAT’s economics, the Brave team raised 156,250 ETH (about $35 million at the time) in their March 2017 ICO. The entire supply of 1.5 billion BATs was created at lunch, with no additional tokens to be created. 1 billion tokens were distributed to the investors at their ICO, 200 million tokens were allocated to the development pool, and 300 million tokens were allocated to the user growth pool. The token is currently trading around $0.76, down about 50% from its peak of $1.5 in April this year.
About Guest Blogger (Parv)Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.