This week Supermoon Camp founder Elena Obukhova presented an in-depth talk on data privacy and precautions to protect personal data and cryptocurrency wallets. There is a false belief that blockchain gives you privacy whereas it’s quite the opposite and gives full transparency. Public blockchains are distributed ledgers where we can see every single transaction. However, it is possible to hide data and personal identities by individually taking extra security measures. As blockchains don’t do this for users Elena explains the importance of data privacy and simple steps to achieve personal data protection.
Elena took the group through the many types of data according to her definition, first looking at personal data and characteristics such as demographics, age, race, and location. There is personality, something you have been forming from the beginning, which is quite hard to change. We also have social and psychological characteristics that also define you as a person and are a part of your personal data.
The behavioral factors such as habit, routine, and formations through time are crucial sets of data that tech companies are very interested in. This is the data they can manipulate to affect your decisions and the decisions of other people. Obviously, human likes, preferences, and dislikes are continuously changing making this type of data a constant learning process gathering and analyzing behavioral patterns throughout the years.
We also have social attributes, which are your relationships, connections, and everyone you socialize and do business with. This data is also an essential element in your decision-making process.
While Elena worked for United Nations as a data scientist a few years back, she learned quickly the power of data and how it can affect one’s decisions making process.
“At the moment I started building different correlations and different patterns, I started to realize I know what people think in this country. What people like, problems they have, and what kind of products we can launch to fill needs”.
At that time United Nations' aim was to increase financial inclusion among people in developing economies, which is a totally different goal in comparison to the corporate segment. Large corporations are not looking for this data to help you; they’re looking at this data to sell you a product or service.
Taking a quick look at various data interpretation methods such as direct, a simple analysis of where you go, things you like, what you watch, and what type of locations you visit. This data is easy to collect through cell phones whenever you connect to networks and allow geo-location to your iPhone apps which is where a lot of tech companies retrieve data.
Besides direct data interpretation, there are also simple prediction algorithms, where they start analyzing your data for things like close network calls, and business relationships thus making this powerful data along with complex prediction algorithms. These allow future predicting, aggregating the data of one person, and analyzing patterns, behavior, and decisions. By taking this data you can start to make actual future predictions based on probability theory.
“The algorithm can predict for example if someone will start a business in two years or launch a new venture in 10 years, you can build all of these patterns based on individual data. This data is actually scary because that’s when companies can start manipulating decisions, and not only you as one person moreover a group of people”.
As Elena mentioned data can be used for multiple reasons such as research, commercial, and political. From politicians to marketers this data shows crucial trends which are used to influence peoples’ decisions through ad campaigns, media, products, and much more.
In the blockchain space, it is crucial to self-educate and learn how to protect yourself. Blockchain gives us the opportunity to protect ourselves without relying on third parties, however, there are still many people who don’t know how to do so, assuming blockchain automatically protects you which is a common misconception.
Speaker Elena takes serious precautions recently becoming proudly unbanked bar one necessary corporate account for legal reasons in the United States.
It’s no easy task to remove one’s digital presence and protect personal data as there is a constant trade-off between convenience and protection of personal information.
Your data isn’t safe if it belongs to someone else, for example, Yahoo, Facebook, and Marriott all had a data breach where individual data was stolen. One individual’s data is not so important to big tech companies, but with everyone’s data together they can build prediction algorithms to use for manipulations.
Many people think blockchain gives them full data privacy and protection…wrong. Blockchain doesn’t give you anonymity but it is 100% transparent, meaning you can trace every single person and transaction far easier than cash transactions, contradicting the false claims of crypto being used for illegal operations due to lack of traceability.
You’ll be surprised how big the OTC market is worldwide, and with centralized exchanges, there is a growing need to take custody of your funds. When using crypto wallets, users must ensure they have full custody, private key, and seed phrase, then you are storing securely. If not anyone can look into your wallet and take your funds without having a third party, for example, a bank to recover stolen crypto, however the drawbacks of the centralized banking system far out way this one convenience in my opinion.
Elena recommends using hardware wallets for the highest security, however, we are still in the early phases of crypto wallets with room for improvement. With this in mind, you always need to know if you are putting your seed phrase on your computer connected to Wi-Fi where someone else can easily retrieve this information.
During the data privacy and crypto guide Elena covered transactions, privacy coins, and different services, the logic here is that it is a centralized service so it’s wise to not trust it with a high volume of funds. We try to find better ways, for example, crypto mixing services where you have a pool of transactions where people send their money into one pool, and then they mix the funds up and you are receiving it from a completely different wallet. There are also mixing protocols so they are decentralized, being similar but in an automated way. Similarly, with smart contracts, you are not achieving complete privacy but it’s considerably harder to trace. You can also go through this mixing several times to make it even harder. But there is no such thing as 100% anonymity, if someone wants to find out where you put your funds it is possible. There are other similar options like Ring Confidential transactions that Monero is using and a very interesting theory; Zero Knowledge.
Data privacy starts with one’s own dedication, research, and personal capacity for trading privacy and security for convenience.