Last week our theme was “Are Apple, Amazon, Google and Facebook the future of banking?“
Our theme for this week is “When Crypto Exchanges hold more than your Money“
Before desktop computers and smartphones put the Internet in everyone’s hands, I sat in computer room, staring at a terminal screen with bright green text, using networks like Bitnet, MUDs, and tools like Gopher and Archie and without a graphical user interface, mouse, track pad or touch screens. You had to type in everything. Since those days, technology has vastly improved. But one thing is far worse. No matter how safe you think your data is, your personal data, who uses it and how, has become the wild west.
In the wake of the Facebook & Cambridge Analytica scandal, in Europe firms have scrambled to comply with the EU’s GDPR. But the damage is already done. Our personal data is out there, and we have lost control of it. Securing data is now on everyone’s minds thanks to Facebook. Back in September the whole world heard about the hack on Facebook, when almost 87 million of its users accounts were left exposed due to a security flaw. The security breach caused Facebook’s shares to drop by 3% in the last days of September.
In a news story on CCN, someone by the name of “ExploitDOT” was allegedly selling 100,000 personal documents that were used to comply with KYC regulations on various cryptocurrency exchanges, like Poloniex, Binance, Bittrex and Bitfinex.
The low-cost Robinhood investing app makes up for the lost profits of commission-free trades, by selling users’ data to other financial companies.
The cryptocurrency derivatives platform BitMEX denied allegations that its new user agreement will allow it to sell trading data to third-party firms. BitMEX announced that it had updated its Terms of Service Agreement, including changes to the intellectual property clause. As of March 6th, when the updates went into effect, BitMEX users will cede any rights of ownership for content posted on the platform.
Last April, Amazon won a patent in the US for a subscription feed that the company claims could “identify Bitcoin transaction participants” for governments and law enforcement. The patent, which was filed in 2014, comes at a time when regulators’ desire to track and police cryptocurrency is running up against the technology’s core promises of pseudonymity for users.
Coinbase, one of the leading cryptocurrency exchanges, is under fire the past fews days. Controversy about the acquisition of Neutrino and revelations about ChainAnalysis selling Coinbase client data to “outside sources,” has added steam to the #DeleteCoinbase movement.
Emphasizing on the primary reason why Coinbase acquired Neutrino, Christine Sandler, Director of Institutional Sales at Coinbase, revealed that Coinbase had to drop its current tracking providers as they were selling customer data without authorization: “It was important for us to migrate away from our current providers… They were selling client data to outside sources, and it was compelling for us to get control over that and have proprietary technology that we could leverage to keep the data safe and protect our clients.”
The hashtag #DeleteCoinbase, which started on social media after the acquisition, has continued to trend, promting crypto users to delete their Coinbase accounts, following the acquisition.
The line between data and money is dissolving. In an article on Wired this past December, the author talks about how he sold his Facebook data to a stranger for crypto.
The world’s most valuable resource is no longer oil, but data. The five most valuable listed companies in the world, deal in data. Everyone wants your data. Companies want it, users have it. Your data is everything a company knows about you. It runs e-commerce, contributes to new product development. It’s more valuable than your money, because without it, it become very difficult to sell you anything.
Cryptocurrencies and blockchain make it possible to think of data as a scarce digital asset that can be owned, rented, or sold. As money becomes data, data is becoming money.