Top tech experts from around the world gathered in Hong Kong in January for the final stop of Blockstack’s “Decentralizing the World” tour (recapped here). New models of governance, digital rights, venture capital in crypto, and the Stacks Blockchain were just a few of the topics these experts tackled.
“Brave New World” was the title of a talk given by Katherine Wu, head of business development for Messari, a New York-based company that aims to provide more transparency in the crypto asset industry. The title was borrowed from the futuristic novel written by Aldous Huxley in the 1930s, which explored the impact of technology on society.
A handful of huge web properties like Yahoo, Google, Amazon, and Facebook sit at the top of today’s tech power structure…but is that good or bad? “On one hand, we have access to information, to social networks, to conversations, and to content from around the world. We are faster and we’re more connected than ever before,” said Wu. “On the other hand though, it created the so-call ‘eyeball economy’ where page views and clicks translate directly to dollars. That, in turn, has created a sense of passiveness in our decision-making.”
It’s simply easier to passively allow social media and shopping web sites access to our personal than to try and keep it private. But Wu cautions: “The more we use one centralized company, the more reliant and dependent we become…especially as we begin to accumulate more aspects of our lives on to that platform.”
The Price We Pay
So what’s the real cost of sharing our personal information with one click of the mouse, and how do companies profit from it? Facebook sells data from our profile pages and private direct messages. Cell phone carriers sell location data to third-party companies without our knowledge. And last year, the social security numbers of 143 million Americans were put at risk during the Equifax security breach.
“We have traded not only our personal data, but those of our friends, in exchange for free and quick access to apps, online games, quizzes, and the like,” says Wu. “As information about us, and our family and friends become increasingly centralized onto one location, the ramifications of a data breach become more and more severe,” she warns.
Public faith in the major Internet players has never been lower, yet these companies are only growing and consolidating power. So how do we protect ourselves and our information? Wu says people typically assume that the only binding rules or laws are those that are made by legislators and by courts, but we tend to forget that law can really also be made through communities.
She also advocates the use of Blockstack’s platform, which allows users to manage and retain ownership of their own personal data. “The brave new world should not be about letting big tech companies take over,” rallies Wu. “It’s about having a choice to actively regain control of those tangible and intangible assets that are important to us as individuals, and I am optimistic as we continue to build towards that.”
For more, watch Katherine Wu’s full presentation above or read through the transcript below. If you’re looking to attend a Blockstack event in the near future, please visit our community calendar. You can also view the other talks and presentations from Hong Kong here.
Lightly edited for clarity
Hi, everyone. Thank you guys for being here today, and happy new year. For those of you who don’t know me, and thank you, Dominique, for the intro, I’m just going to repeat it here really quickly. My name is Katherine Wu, and I head business development for Messari, which is a New York-based company that aims to provide more transparency in the crypto asset industry through contextualized information, research, and data.
00:33 The title of my talk today begins with “Brave New World,” which is the title of a futuristic novel written by Aldous Huxley in the 1930s. The novel focuses mostly on the impact of technology on society with an emphasis on state control, the individual’s identity, and the dangers of passivity. This book eventually became the source of inspiration for George Orwell’s famous 1984, but I’m not here to give a literature lecture. Rather, I think this is quite a good starting point to consider the state of technology and regulation around the world today.
01:13 As we think about the future of the crypto space, about Web 3, about crypto’s impact on society, sometimes it helps to bring the discussion back to basics and think about this set of questions. First, what is it about the current state of technology and its power structure do we want to change and second, does it need to be changed?
01:39 Let’s examine the power structure that exists in the current world order of technology today and how that came to be. With the proliferation and development of the Internet, we saw the emergence of huge web properties. These include companies like Yahoo, like Google, Amazon, Facebook, and the like.
01:59 On one hand, we have access to information, to social networks, to conversations, and to content from around the world. We are faster and we’re more connected than ever before. That is, of course, a good thing. On the other hand, though, it created the so-call “eyeball economy” where page views and clicks translate directly to dollars. That, in turn, has created a sense of passiveness in our decision-making.
02:28 Think of it as the tyranny of convenience. This is a term that I came across from Professor Tim Wu of Columbia University who made the following point. He said, “To resist convenience, for example, not to use a cell phone or not to use Google, has come to require a special kind of dedication that’s taken for eccentricity if not fanaticism.” He goes on to explain, “Given the growth of convenience as an ideal, as a value, and as a way of life, it’s worth sometimes asking what our fixation with convenience is doing to us.”
03:05 What is this sort of habit of convenience doing to us? Well, the biggest error first I think is presuming that convenience is always a good thing. Furthermore, we are spoiled by immediacy the more annoyed we get by tasks that remain at the old level of effort and time. For the record, I don’t think convenience is a bad thing per se, right, because making things better, or faster, or smoother, or easier on its face is not bad or it’s not evil, but where I do think it matters in our increasingly digital world is mostly this:
03:37 The more we use one centralized company, the more reliant and dependent we become at that one single company, especially as we begin to accumulate more aspects of our lives on to that platform. In other words, users are at the will of big tech companies as companies collect personal data within their private databases and can unilaterally determine a user’s interaction with the web. Yet, the type of convenience that comes with this sort of one-stop shop or platform means that users will continue to use these services and thereby reinforcing the big tech power structure as it exists in the current Web.2 era, which is where we are today.
04:16 Now, why exactly though is that a bad thing? Well, consider this. Earlier last year, attackers entered Equifax’s system through a web application vulnerability. As a result, the identity information of up to 143 million Americans, so that’s more than 40% of the US population, were put at risk. The identifying information includes names, birth dates, Social Security numbers, addresses. These are all details that could help identity thieves take out loans in your name, apply for a credit card in your name or anything else that your digital identity might be used for.
04:52 Additionally, last year’s revelations about Facebook served as a wake-up call, starting with the Cambridge analytical scandal. Subsequently through investigations and reporting of other companies, we learned that, for example, our cellphone carriers are selling our location data to third-party companies often without our knowledge, and that data is ending up at the hands of bounty hunters and other people who are really just not authorized to have that data or to possess it.
05:20 Facebook also sells the data from our profile pages all the way down to our private direct messages. Examples of these are endless. We have traded not only our personal data, but those of our friends in exchange for free and quick access to apps, to online games, to quizzes, and the like. As information about us, and our family and friends become increasingly centralized onto one location, the ramifications of a data breach become more and more severe. Public trust in big tech companies like Facebook is currently at an all-time low.
05:53 Looking back at 2018, a topic that’s become increasingly relevant within the crypto sphere globally is the topic of regulation, and the prevailing argument is that centralization is a result of overreaching government regulations, but here’s the thing. The absence of government intervention does not necessarily equate to decentralization because, without antitrust or consumer protection regulations, monopolies will continue to consolidate and centralize powers from there. This is because centralization emerges naturally in a free market due to economies of scale and other efficiencies, and that is also precisely why and how big tech companies like Yahoo, or Google, or Facebook have amassed mountains of sensitive data so quickly and are now in this really difficult position of balancing the competing legal, ethical, and business priorities.
06:45 Let me backtrack though and say I don’t necessarily think that things like data-based targeting, targeted advertising, and the like are all bad, but rather, I think the issue is more so over the choice that we should be able to have as individuals, and here is where we have seen regulators try, and step in, and fix the problem.
07:05 Over the course of last year, we saw the implementation of GDPR in Europe, the passage of historic privacy laws in California, and two high-profile tech companies CEOs being questioned in front of the US Congress over their internal company practices, procedures, and control of personal data and privacy policies.
07:23 Despite that alarming headlines from the past year though, big tech companies are growing, and they’re growing with really no end in sight. Google is now one of the largest landowners in New York City. Amazon’s new headquarter two or new two headquarters are split into two major US cities. Facebook continues to grow as well in both headcount and in space, so as much as people are wary or maybe even unhappy with the out-sized power held by these companies, they are at the same time increasingly dependent on the services that these exact companies provide.
07:57 Of course, you can make the argument that in order to buy into this world of convenience, that’s the price we pay. With one click of a mouse, we voluntarily give up the ownership of our own information, our personal data and records without even a second thought, and it’s become the status quo, the sort of quid pro quo that we have come to expect.
08:16 The status quo has made it so easy that it’s forgotten there should and really could be alternatives to the current digital world order. Sure, like there could be legally mandated reforms on each company’s policy and the way they handle information, but those frameworks are bound to be outpaced by the growth of technology.
08:35 Furthermore, as we have seen with the lines of questioning from the US Congress to the CEOs of Facebook and Google this year, the knowledge gap is just too wide to be bridged appropriately and effectively in the near and medium term. I don’t know if any of you guys tuned in, but during the questioning, one of the senators asked the CEO of Facebook, “Sir, how do you make money?” to which Zuckerberg replied, “Well, we run ads.” We seem to be a long way out from proper regulation if that’s even possible.
09:07 Looking back to history, let’s step back for a second. I want to point to the formation of customary international law, which is one source of international law that is reinforced through consistent practice and common understanding of the international community, and it’s a highly effective one. In other words, it’s the idea that even though the law is not codified, it has been practiced for a long enough period of time that it can become law.
09:31 Lawyers and other people typically assume that the only binding rules or laws are those that are made by legislators and by courts, but we tend to forget that law can really also be made by the consent of the communities of people without any formal enactment by government entities. In fact, such customs or practices are not even written down sometimes.
09:50 Customary law is a signal of source and flexibility for international law. It allows international actors to develop rules of behavior informally without the need to resort to a central body. Similarly, the burden of creating alternatives to the current state world order of technology will probably have to lie within the hands of the architects of the new web system. They are the global actors within the tech space that will help mold the rules of behavior in the long term. This sort of decentralization sentiment is largely the backbone of the Web 3.0 era, which focuses strongly on community governance and on the self-sovereignty on one’s own data, wealth, and other valuable assets whether they’re tangible or intangible.
10:38 By the way, I think that it’s the same world in which Blockstack is building for as well. Blockstack’s platform allows users to manage and retain ownership of their own personal data by removing the need for a centralized hosting using existing systems. This is an example of a decentralized world and vision that we may all move to one day.
10:59 Chris Dixon, who’s a general partner at the venture capital firm Andreessen Horowitz, wrote in a post titled “Why Decentralization Matters” the following, “The question of whether decentralized or centralized systems will win in the next era continues to … reduces to who will build the most compelling products, which in turn reduces to who will get more high-quality developers and entrepreneurs on their side. Decentralized networks aren’t a silver bullet that will fix all the problems on the internet, but they offer a much better approach than centralized systems.”
11:33 As I mentioned earlier, big tech companies are not slowing down. I think they will continue to consolidate power and expand as long as we passively click away our rights to self-sovereign data, whatever form that takes, but as long as there are decentralized alternatives, there is a choice. The brave new world should not be about letting big tech companies take over. It’s about having a choice to actively regain control of those tangible and intangible assets that are important to us as individuals, and I am optimistic about that as we continue to build towards that. Thank you.