Have you ever stopped to think that it’s insane how much time, attention, and content we share on the Internet while we get essentially nothing back except maybe that vague notion of “exposure”? Oh yes, the things we do for exposure…
The sad thing about exposure is that it doesn’t feed you, not unless you have a lot of it, and even then only maybe. Over on YouTube, only about 3% of content creators make enough to pass the poverty line. All the while, Facebook and Google jointly accounted for 73% of all online advertising revenue in 2017. Say hello to the world in which most millennials will never own homes, or be able to afford to put their kids through college. Say hello to the world in which your personal data is used to create wealth for the top 1%.
We’re so used to thinking about the “content” that we create in rigid terms that most people don’t even realize that their selfies are the least valuable asset. As it stands, we create an obscene amount of data that gets repackaged and then sold to companies. These same companies then have the guts to complain that “millennials are killing the diamond industry.” Seriously, get bent.
Here’s a thought: why are the same incentives that drive human behavior in the “real world” not applied on the Internet to solve the multitude of problems that have been plaguing the “online world”? Of these problems, the chief one is the lack of compensation, followed by privacy scandals, copyright violations, fake news, and fake traffic— all of which we have grown quite accustomed to hearing about, especially if one frequents a particular bird-branded microblogging site.
On its face, this seems like a fairly simple question. The answer, however, is truly multifaceted and can take us through barren lands of cross-disciplinary territories where food is scarce and, most of the time, water needs to be squeezed out of a cactus.
First, we need to understand the grave implications of the lack of an incentive-based system to govern online spaces. And for that, we don’t need to look any further than recent scandals involving Facebook.
How We Created a Monster
There is hardly any doubt that the Internet is a wonderful tool that changed the world in ways we couldn’t have previously imagined. However, more often than not, we are faced with the true, ugly price of connectivity — the dilution of identity.
One of the recent examples is, of course, the Cambridge Analytica scandal that resulted in everyone’s favorite alien testifying before the U.S. Congress. The prevailing opinion still is that if you want a free service that lets you connect with people, then your online profile will be harvested to sell you stuff. Most of the time we don’t mind. The shoe advertisements are usually barely accurate to cause a chuckle [I’m sure there is great value in selling me stuff I already purchased]. Where it all turns ugly is where the product no longer fits the expected “product” profile. Is ideology a product?
Why are Facebook and other companies allowed to violate our privacy for their own personal gains? Why are companies allowed to exploit our data to pitch us a disrupted, disjointed world where fear and anger guide our decision-making process? You might think that I digress.
On the contrary, it’s this exact “free-for-all” business model that we have grown accustomed to that has resulted in the world we’re faced with today.
Essentially, with the rise of Web 2.0, we’ve seen the emergence of a new type of company that governs a community hub. Having a centralized point of control over a global community has provided these companies with an unyielding source of power that, in some cases, even they do not fully comprehend. Cambridge Analytica leveraged just such a weakness in Facebook.
Now, the two major problems that we can identify here are:
- Companies that offer free-for-all software make their money by providing data analytics to advertisers, which results in the creation of very accurate customer-targeting tools that can be exploited to influence decision-making capabilities on a mass scale.
- Centralized point of control over billions of users and the lack of economically sound incentive-based system result in chaos, exploitation, and unfair value distribution.
Now, let’s repeat the question asked at the very beginning to see how all of this ties in: Why are the same incentives that drive human behavior in the “real world” not applied on the Internet to solve the multitude of problems that have been plaguing the “online world”?
Until a few years ago we simply didn’t have the right tools to introduce advanced economic modeling into online systems. We have also not seen the extent to which the existing model was a threat to privacy, freedom, and the ability for us to make money. As it stands, no one yelled from the top of their lungs “The data I created is mine and you should pay me for it!” And if they did, it was just not loud enough. Now, that’s beginning to change.
Right now, we’re largely working with systems that have a centralized point of control. All rules are enforced by the company that operates the system. Such a company can implement changes how it sees fit with the best interests of the company in mind. This works in certain cases for manufacturers, and retailers, for example. However, it’s a lot less clear what happens when a company operates like a governing body over a community hub of millions or billions of people.
In a global community there is inherent value in providing tools to better connect people. However, having a centralized point of control over consumer data and behavior carries a great risk: users can easily be manipulated, and user data has a single point of access.
Users are not in control of their own online identities: they can’t post what they want, they can’t see what they want, they can’t monetize their information and content the way they see fit. The company that owns the platform has the final say in everything that happens on the network. In a way, it [kind of] makes sense because these companies are afraid of being liable for what their users say or do. They assume the role of authority figure. However, having control over millions of people’s online lives makes them not companies but… what exactly? Governments? Rulers?
We don’t know. The system is not prepared for what happens when companies are in control of communities and how to redefine their power structure.
Blockchain Means Freedom?
As bad as the recent privacy scandals have been, they also have had a positive result — they made people rethink how they view privacy, how they view social networking companies, and made them start to wonder why the data they create isn’t truly their own.
In a nutshell, people are ready to move on and are looking for alternatives. As a result, many companies are beginning to create unconventional solutions using emerging technologies. By far, the most exciting are platforms attempting to use the blockchain. I don’t want to get too much into the nitty-gritty of blockchain in this particular article as I feel that this should be the subject of a separate article.
I will, however, explain why blockchain is the shining beacon of hope that we’ve all been waiting for. Put simply: blockchain is a distributed ledger that uses cryptographic hashes to secure information. It provides Game Theory-based incentives to its miners so that they stay truthful and behave with the best interests of the community in mind.
The invention of blockchain had the wonderful effect of creating an emerging field of cryptoeconomics — an interdisciplinary field [cryptography + economics] that looks at system design (such as blockchain) and aims to analyze human behavior as it applies to these systems to provide appropriate incentives.
Now, for the first time since the invention of the Internet, we are striving to fully understand the economic implications of various online systems. Using blockchain as a system and using principles of economic modeling as governing rules, we can try to introduce better value distribution across the Internet.
However, the move from a centralized point of control to an incentive system is a challenge. Incentive systems can be hard to control without strong enforcement laws in place. This is as true in the real world as it is in online systems. Even at the risk of going to prison, some people still commit crimes — this is also going to be an issue as we move towards online identities. This shouldn’t stop us from introducing monetary value into online interactions as long as we also have a strong foundation of accountability in place.
So where exactly is the world heading? Is it into an abyss of further inequality? Or is it towards cryptographically secure online identities? I prefer to think that it’s the latter. And in the meantime, I would like to leave you with my favorite quote from Henry Ford: “If you always do what you’ve always done, you’ll always get what you’ve always got.” The American dream might have taken a wrong turn, but the blockchain dream is just beginning.
Eunika Sot is the Chief Operations Officer of Yuser — the first Gamified Creative Social Network that distributes blockchain-powered rewards. You can find out more about Yuser and its mission to revolutionize the social networking space here.
11 Most Read IRIS Articles of the Week!
Why Secure Passwords Matter and How to Create Them
10 Ways to Celebrate International Women’s Day
Becoming a Great Podcast Host with Celeste Headlee
New Guiding Principles for Opportunity Zone Investors
Leaders: Do You Challenge Your Status Quo?
9 Marketing Trends That Will Dominate This Year
How To Keep Envy From Destroying Your Workplace
6 Tips to Help Your Journey to Retirement
Who Do You Sell to First
Forward-Looking Investing1 day ago
Moat Investing: Powered by Morningstar
Market Strategist1 day ago
We Are Not Convinced the Market Storm Has Completely Passed
Development1 day ago
Advisors: How To Answer “What Do You Do?”
Markets2 days ago
Higher Mortgage Rates, Student Loans and Nike
Equities2 days ago
7 Stocks That Pay the Largest Dividends of All That Trade on Nasdaq – Or Do They?
Advisor2 days ago
The Wizards of Wall Street vs. The Selbees from Michigan
Markets3 days ago
The Chameleons Are on the Run
Compliance3 days ago
Regulators Focusing on How Firms Identify, Monitor and Test Custody Scenarios With Client Assets