A life on-chain: The dangers of privacy in Web3

Joshua Snyder

Joshua Snyder / August 06, 2022

3 min read––– views

The expansion of the writable internet created a powerful new commodity.

Before we spent most of our lives online, our behaviour was expensive to track and thus not lucrative enough for most companies to try.

As computers entered our households and we moved online, our interactions with the world became traceable, so the race began to capture as much of our behavioural data as possible. In the age of surveillance capitalism, companies harvest our data whilst providing us services for free.

We could have paid for search, social and maps and created the competitive environment capitalism intends to encourage. Instead, our data became the new medium of exchange, and we didn't understand the value of this new currency which made it all the easier for it to be taken from us.

The problem with our behavioural data is that it lives in walled gardens where large corporations harvest it for profit without our understanding. Whoever has more of it exploits us at a faster rate than everyone else, creating economies of scale, which beget monopolies that finally lay the axe to innovation.

In the hope of avoiding surveillance capitalism, Web3 offers an attractive alternative. Move our interactions on-chain. At first, this seems like a ludicrous idea. Isn't the way to avoid exploiting our behavioural data to keep it private rather than share it with the world? The problem with this approach is that someone can trace your behaviour as soon as your device has an internet connection. And as soon as they collect your behavioural data, they will monopolise the resource until their power grows like a cancer. Keeping your behavioural data private is no longer a viable option.

Moving our interactions on-chain makes our behavioural data a public good. Possession of your behavioural data becomes valueless (since anyone can acquire it for essentially zero cost). It encourages companies to develop a competitive advantage based on their product rather than their ability to manipulate you and removes the vaults of data available only to the largest companies.

Unfortunately, a life on-chain has a darker side too. Imagine if Google were to release all your behavioural data to the public. Not only do you have to worry about Google manipulating you, but now every other company is going after you too. When your behavioural data is a public good, more companies try to profile you, eventually mining your data more efficiently than if it was stored in the databases of a few global corporations.

Will we be comfortable with apps knowing our bank balance, how much debt we have, who we interacted with 10 years ago and who we trust? What kind of inequalities will this introduce in the development of new products and services? As we develop with these powerful new technologies, we need to think carefully as a community about how bringing interactions and data on-chain will affect the privacy of users.

Note: Behavioural data does not refer to your personally identifiable information (PII) which is best kept off-chain. It refers to how you interact with services. On a blockchain, these interactions are public and immutable, meaning that anyone can see them and you can't delete the record of them once it is first created.

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