Alex Feinberg, ex-Google employee and COO of Petram Security, talked with TechRepublic's Dan Patterson about how blockchain could change user privacy. Read the transcript below.
Patterson: With the rise of social media, big data, and artificial intelligence, it's clear that our personal information is in the hands of just a few very large technology firms. The European Union has enacted the GDPR, that's the General Data Protection Regulation, but it's yet unclear on how the US will respond. One emerging technology however, the blockchain, could put privacy back into the hands of consumers. Alex Feinberg, you are a former professional baseball player, also a former Googler, you worked on Wall Street, let's talk about the blockchain.
First, help us understand who you are, and what qualifies you? Why with your background are you now interested in block chain tech?
Feinberg: Yeah, that's a great question and probably for your viewing audience they'd wonder the same thing. For anybody who's familiar with how division one athletics works or how minor league baseball works, or how employment relations in Hong Kong work or how employment relations in Silicon Valley have worked, I sort of realized in my late 20's that every organization or jurisdiction that I'd ever contributed to as an organization member had been legally challenged for abuses of power.
Starting with being a division one athlete a couple years ago, Northwestern football players made a motion to attempt to unionize and collectively bargain to battle against what they perceived to be an abusive authority by either the NCAA or their coaches, a year or two later minor league baseball players banded together and sued their professional organizations because they were claiming that rights that were granted to American workers since the great depression were being withheld from them with respect to making less than minimum wage and then my first job after I got done playing sports, working in Hong Kong where they had recently allowed for a minimum wage that was something like two dollars an hour and where collective bargaining and union formation was illegal, you start to see this pattern where large organizations or powerful organizations have been prone throughout history to abuse their power in terms of getting more and more leverage over the members of their organization to make them essentially their puppets over time.
Moving on to working at Google in Silicon Valley shortly after I joined there was unfortunately a multi-hundred million dollar settlement that a lot of the tech firms shared in due to the likely collusion to lower engineering wages in the region, and so you see this pattern once, twice, three, four times and you start to think "Oh wow, this isn't an individual problem, this isn't a problem of one human or another human, this is a function of how humans organize themselves where if you put a lot of power in the hands of very few people, you should probably expect them to at times, abuse their authority and the only way around that abusive authority that I have seen throughout my life is to figure out a way to decentralize that authority, to increase the bargaining power of the members who are essentially beholden to occasionally autocratic decisions by the higher ups.
And so as cryptocurrency started melting up in 2017, and blockchain's come to the forefront over the last two or three years, it's really intriguing because it's essentially a vehicle that allows decentralized autonomous organizations or organizations without a single king to potentially operate. And if you think about why that's interesting, if you're familiar with the formation of the United States and the suspicion that our founding fathers had about authority and centralized authority, this could potentially be a tool that allows corporations in the 21st century or organizations in the 21st century to operate in a more decentralized fashion.
Possibly more democratically, possibly more equitably, it's still a work in progress, but the potential is there, and for that reason I'm quite interested.
Patterson: Alex, it's almost impossible to open your phone, or to load a website, without reading about cryptocurrency, the blockchain, smart contracts, but for those of us who are not engineers, and not nerds, help us understand what the blockchain is, how it works and why it's important.
Feinberg: Yeah, so blockchain is essentially just an open database, and if you think about most databases that we're familiar with, you know Facebook has their own databases, Google has their own databases, Amazon has their own databases, what the blockchain is, is an open database that doesn't have a central owner. The first application that has gained world wide fame would be Bitcoin, would be a potential cryptocurrency, where you know Satoshi believed 10 years ago, pseudonymously that he really had an issue with the financial system, and the silos and exchange of information within the financial system allowed for a lot of corruption by banks, bankers, central banks, and so the first application of the blockchain was Bitcoin, and what a lot of people don't realize who are watching from the comfort of their own homes in western countries is corruption or abuse of authority by bankers, central bankers and governments, will result in devaluation of a currency.
SEE: IT leader's guide to the blockchain (Tech Pro Research)
Now that doesn't have to be the US dollar, it hasn't happened yet. Maybe in the early 80s when we were seeing inflation in the high teens, that could have been a symptom of it, but really in countries like Venezuela, Zimbabwe where they've had very significant inflation, those are places where it might make sense to switch the control of authority from a centralized authority that can't be trusted to a decentralized authority like a block chain, even with the volatility that it contains. Now, currencies aren't the only use of a blockchain. Logistics companies can share information, pharmaceutical companies can share information potentially, hospitals can potentially share information, there's a lot of legislation or laws in the books that make that a little bit challenging, but essentially anytime there's coordination issues, that can be solved by having multiple people access and form a consensus around the appropriate changes to a common database. Those are where applications of the blockchain can exist, and what this allows for is for decentralized organizations, organizations without one owner or without one king to exist.
And that's why the opportunity for privacy is enhanced, because an open database, what block chain is, is no better for privacy than a closed database, in fact it's probably worse, but what an open database does allow for is organizations to run without one king. And what that allows for is for the members of the organization to have essentially more bargaining power, or ownership over their own data. And they can use it the way they want.
Patterson: How can the blockchain help me as a consumer take my privacy back? How can it help me control the information that I share, and the organizations that I share that information with?
Feinberg: Yeah so what the blockchain will do is allow you as a user, if you don't want to use a centralized search engine like Google or if you don't want to use a centralized social network like Facebook, there's a lot of different alternatives that are popping up that would essentially allow you to share information selectively through zk-SNARKs and what this would do through selective information sharing is potentially allow you to control who has your information, who doesn't. If you don't want Cambridge Analytica to have your information, you would have the ability to say no, they theoretically will also have that ability on Facebook and many people forwent that option.
If you wanted to potentially monetize the information that is being used to serve you targeted ads, there will be solutions for that on the block chain and so essentially what it would allow you to do, and really this is primarily for people who are intensely concerned with data privacy because I wouldn't imagine that you would make a ton of money on it right away, given the fact that Google or Facebook are making in the tens of dollars per user per year. So if that money were fully transferred to you, you might have an extra $80 a year or something in year one, so that's not going to change your life from a monetization standpoint or from a monetary standpoint, but what it does do is give you control, and it could give you a better opportunity to selectively share your data and make sure you're winning in each exchange, if that's something that's important to you.
- What is blockchain? Understanding the technology and the revolution (free PDF) (TechRepublic)
- The blockchain explained for non-engineers (ZDNet)
- Blockchain: A cheat sheet (TechRepublic)
- Blockchain and cryptocurrency: It builds trust when you need it most (CNET)
- Top 5: Business uses for blockchain (TechRepublic)
Dan Patterson has nothing to disclose. He does not hold investments in the technology companies he covers.
Dan is a Senior Writer for TechRepublic. He covers cybersecurity and the intersection of technology, politics and government.