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Forget about data; privacy is the new ”new oil.”
When even Mark Zuckerberg declares that there is a "clear trend" away from data collecting, you know the pendulum is swinging.
Data is oil, and so is privacy.
Individual privacy should be of concern to investors, if only because it is becoming a trend that is already having an impact on the market.
To be sure, some of the world's most successful, profitable, and impactful businesses have grown despite a noticeable lack of privacy. Companies like Google (now Alphabet) and Facebook (now Meta Platforms) leverage the massive amounts of consumer data at their disposal to cherry-pick adverts that encourage you to buy something you don't need but really, really desire. This is made possible by consumers agreeing to give up their privacy in order to submit that data.
For a time, few customers seemed to mind, and the market rewarded those businesses. In 2012, Facebook debuted on the Nasdaq with a market valuation of $60 billion, and by last August, it had risen to more than $1 trillion. Google followed a similar path, beginning with a market valuation of $23 billion in 2004 and reaching just shy of $2 trillion late last year. They both accomplished this by monetising user data.
In 2017, The Economist declared data to be the most valuable resource in the world, surpassing oil, echoing data scientists' rallying cry that "data is the new oil." Consumers, on the other hand, are starting to notice that their information is being sucked out of them. As a result, such data is becoming more difficult to obtain and use.
The paradigm is shifting in favour of greater privacy.
No, you should mind your own business.
Last month, my colleague (and fave CoinDesk writer) David Z. Morris wrote an excellent post discussing this trend for CoinDesk's Privacy Week. In it, he provided us with quotes such as
Tsukuyama remarks, "Your phone isn't listening to you." "What's frightening is that businesses don't have to listen." They can deduce who you're hanging out with, the time of day, if you're seeking for something, your age, and other information from your search history. They don't need to listen to you since they already know."
Enter Apple, which launched a campaign last year to promote enhanced privacy for its consumers. In summary, Apple made it more difficult for apps to track data by allowing users to opt out. As an Android user who normally refuses to provide data with apps, I dismissed this as a non-event. That is, until Mark Zuckerberg, the creator and CEO of Facebook/Meta, stated the following on the company's most recent earnings conference call:
"With Apple's iOS updates and new European regulations, there's a clear trend towards less data available to serve tailored adverts... As a result, we're replacing a large portion of our ad infrastructure in order to continue to grow and offer high-quality targeted advertisements."
That was on February 2nd. The next day, Meta's shares dropped 26%. Apple's privacy campaign was so positively accepted by its users that one of the world's most valuable firms lost billions of dollars in market worth.
Apple understands that its customers value their privacy. Unlike Apple's late creator, Steve Jobs, the current CEO, Tim Cook, is a business school graduate who appreciates the importance of market research (Jobs didn't depend on market research since he believed buyers didn't know what they wanted until Apple told them). As Zuckerberg's remarks demonstrate, the privacy pendulum is shifting from "we'll disclose anything" to "hey, we want our privacy back."
So, what does this have to do with cryptocurrencies?
Right now, I'm preoccupied about privacy. And I'm surprised by the lack of easy-to-use privacy in cryptocurrencies, including bitcoin, despite the fact that anonymity is one of Bitcoin's key precepts as a peer-to-peer digital payment.
Whether it's Canada (where COVID-19 vaccine mandate protestors had their bank accounts frozen), the alleged Bitfinex money launderers being apprehended (despite their efforts to cover their tracks), or the potential doxxing of the Ethereum DAO hacker (despite his use of a bitcoin mixer to obfuscate his trail), cryptocurrency is just not great for privacy, especially when it comes to converting crypto into cash for use in the "real world."
From the standpoint of an investor, there is a relevant conversation about privacy-enabled technology to be held, because wherever there is sufficient demand, there is money to be made. This desire has manifested itself, with equity raise volumes in privacy and cybersecurity businesses reaching roughly $10 billion in 2019. More could be on the way as a result of the increasing interest in privacy.
Whether that means investing in Bitcoin infrastructure to enable a "circular bitcoin economy" (which would enable more privacy because off-ramps are arguably where privacy is most endangered), developing privacy crypto coins like Zcash or Monero, or something else is up to the investor.
Support us!
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By Crypto PiratesWhen even Mark Zuckerberg declares that there is a "clear trend" away from data collecting, you know the pendulum is swinging.
Data is oil, and so is privacy.
Individual privacy should be of concern to investors, if only because it is becoming a trend that is already having an impact on the market.
To be sure, some of the world's most successful, profitable, and impactful businesses have grown despite a noticeable lack of privacy. Companies like Google (now Alphabet) and Facebook (now Meta Platforms) leverage the massive amounts of consumer data at their disposal to cherry-pick adverts that encourage you to buy something you don't need but really, really desire. This is made possible by consumers agreeing to give up their privacy in order to submit that data.
For a time, few customers seemed to mind, and the market rewarded those businesses. In 2012, Facebook debuted on the Nasdaq with a market valuation of $60 billion, and by last August, it had risen to more than $1 trillion. Google followed a similar path, beginning with a market valuation of $23 billion in 2004 and reaching just shy of $2 trillion late last year. They both accomplished this by monetising user data.
In 2017, The Economist declared data to be the most valuable resource in the world, surpassing oil, echoing data scientists' rallying cry that "data is the new oil." Consumers, on the other hand, are starting to notice that their information is being sucked out of them. As a result, such data is becoming more difficult to obtain and use.
The paradigm is shifting in favour of greater privacy.
No, you should mind your own business.
Last month, my colleague (and fave CoinDesk writer) David Z. Morris wrote an excellent post discussing this trend for CoinDesk's Privacy Week. In it, he provided us with quotes such as
Tsukuyama remarks, "Your phone isn't listening to you." "What's frightening is that businesses don't have to listen." They can deduce who you're hanging out with, the time of day, if you're seeking for something, your age, and other information from your search history. They don't need to listen to you since they already know."
Enter Apple, which launched a campaign last year to promote enhanced privacy for its consumers. In summary, Apple made it more difficult for apps to track data by allowing users to opt out. As an Android user who normally refuses to provide data with apps, I dismissed this as a non-event. That is, until Mark Zuckerberg, the creator and CEO of Facebook/Meta, stated the following on the company's most recent earnings conference call:
"With Apple's iOS updates and new European regulations, there's a clear trend towards less data available to serve tailored adverts... As a result, we're replacing a large portion of our ad infrastructure in order to continue to grow and offer high-quality targeted advertisements."
That was on February 2nd. The next day, Meta's shares dropped 26%. Apple's privacy campaign was so positively accepted by its users that one of the world's most valuable firms lost billions of dollars in market worth.
Apple understands that its customers value their privacy. Unlike Apple's late creator, Steve Jobs, the current CEO, Tim Cook, is a business school graduate who appreciates the importance of market research (Jobs didn't depend on market research since he believed buyers didn't know what they wanted until Apple told them). As Zuckerberg's remarks demonstrate, the privacy pendulum is shifting from "we'll disclose anything" to "hey, we want our privacy back."
So, what does this have to do with cryptocurrencies?
Right now, I'm preoccupied about privacy. And I'm surprised by the lack of easy-to-use privacy in cryptocurrencies, including bitcoin, despite the fact that anonymity is one of Bitcoin's key precepts as a peer-to-peer digital payment.
Whether it's Canada (where COVID-19 vaccine mandate protestors had their bank accounts frozen), the alleged Bitfinex money launderers being apprehended (despite their efforts to cover their tracks), or the potential doxxing of the Ethereum DAO hacker (despite his use of a bitcoin mixer to obfuscate his trail), cryptocurrency is just not great for privacy, especially when it comes to converting crypto into cash for use in the "real world."
From the standpoint of an investor, there is a relevant conversation about privacy-enabled technology to be held, because wherever there is sufficient demand, there is money to be made. This desire has manifested itself, with equity raise volumes in privacy and cybersecurity businesses reaching roughly $10 billion in 2019. More could be on the way as a result of the increasing interest in privacy.
Whether that means investing in Bitcoin infrastructure to enable a "circular bitcoin economy" (which would enable more privacy because off-ramps are arguably where privacy is most endangered), developing privacy crypto coins like Zcash or Monero, or something else is up to the investor.
Support us!