One of the largest and most highly publicised recent Token sales is from Telegram, the social media messaging firm.
The recent challenges that Facebook has been experiencing, using our personal data, are not unique to it, but they do raise the issue as to who controls our data, how it is used, and to whom it is being sold.
It has been known for a long time that companies make assumptions about our spending patterns and risk ratings. While it is now illegal, for years insurance companies rated lady drivers as lower risk, therefore, were charging lower premiums for car their insurance. What people are less aware of is your car insurance price can be affected by your email. In a recent article, the Sun newspaper in the UK stated that if you had a Hotmail address, your car insurance premiums would be higher. When the Sun challenged the insurance companies, they said that historically it was younger people who had Hotmail as their email addresses. More worrying than this is that some insurance companies will alter your premium based on your name and will, for example, quote higher premiums if your surname is Mohammed.
Facebook, it seems, has sold data to Cambridge Analytica, the same company that worked with Donald Trump, helping him to become the most powerful man in the world. It, allegedly, obtained information on 50 million Facebook users improperly. For years, companies like Facebook and Google have been giving free access to their service to gather data and then resell this data to the highest buyer. It was estimated that just in 2016 Facebook was making over $4 from each person who had an account with them, and their model of collecting data and then selling it has made them one of the biggest companies in the world. Google meanwhile seems to be making more than double this, i.e. $10 per registered user on Google in one year. So how can firms that offer Tokens and Cryptocurrencies change this?
Well, to buy and sell Tokens you typically need a wallet, whether it be to participate in a firm that wishes to raise capital via an Initial Coin Offering (ICO), or maybe to use the Tokens that you have been given in one of the many air drops where one is literally given free Tokens as a marketing campaign to get your attention. A wallet is how you hold Tokens and it can either be a “hot wallet”, i.e. connected to the internet and so potentially liable to hacking, or a “cold wallet”, which is like a USB stick and only connected and vulnerable to be hacked when you plug it into a device that connects you to the internet. There are now over 21 million wallets that hold Tokens globally and CNN is predicting that by 2024 there could be over 200 million people holding wallets—most of these are run by firms that have carried out an ICO. One of the other advantages of a wallet is that it potentially gives owners control over their data, enabling them to share their information with whom they want, and even be paid for doing so. It will, in time, also allow one to carry out transactions like voting, changing bank account provider or utility provider more efficiently and faster.
One of the largest and most highly publicised recent Token sales is from Telegram (the social media messaging firm), which has just announced that it has over 200 million subscribers on its platform. So, little wonder Facebook has banned advertisements about Telegram’s ICO on its website. Earlier this year, Telegram announced it was going to carry out an ICO and issue TON Tokens to help fuel its global expansion, potentially raising over $14.7 billion. Clearly, with a pile of cash and the fact that it is reportedly already handling over 50 billion messages a day, Telegram could be a threat to other social media players like Facebook, WhatsApp etc. Interestingly, if you look at its website, it actually states “NO” when asked, “Will you have ads? Or sell my data?”So the question is, could Telegram do to Facebook what it did to Bebo, or what Google did to Yahoo?
Despite all the brouhaha around ICOs and Tokenomics, with often biased reporting, maybe firms like Telegram will start respecting your data, and not selling it. Hopefully, keeping the data stored in a decentralised manner and securely using military grade cryptography, your personal information will also not as be easy to hack into.
Jonny Fry, CEO of www.TeamBlockchain.net, is speaking at South-Asia’s biggest Blockchain Conference on 12-13 May, 2018 at the JW Marriott Hotel, Aerocity, New Delhi.