Blockchain, the online ledger technology technology that powers bitcoin and other cryptocurrency transactions, could get a boost from the recent data scandal facing tech giants such as Facebook Inc. (FB), according to one analyst on the Street. This week, Facebook saw billions of dollars wiped from its market capitalization after news broke that political data analytics firm Cambridge Analytica had used the personal information of more than 50 million users without their consent to help the Trump campaign in the 2016 U.S. presidential race.
In an interview with CNBC on Wednesday, RBC Capital Markets analyst Mitch Steves suggested that Zuckerberg’s woes could be good news for blockchain technology. The RBC analyst indicated that decentralized blockchain will allow users to see exactly which data are being shared and with whom, but will not be able to prevent the misuse of data.
Instead of giving photos over to Facebook, Steves stated that with blockchain, people would instead share data like photos specifically with people, maintaining the ability to track it and make sure it is not shared with someone who gets access to their information. (See also: Bitcoin Will Become World’s ‘Single Currency’: Dorsey.)
Deception and Decentralization
“You can 100% track all this stuff,” said the RBC analyst. “I think that’s where we’re going long term.” Steves noted that while blockchain would solve the transparency issue, allowing users to keep tabs on their data and how it gets shared, it would not solve the control issue, failing to prevent misuse in the first place.
Steves expects cryptocurrencies and the underlying blockchain technology to skyrocket to a $10 trillion industry in the next 15 years, boosted by the proliferation of decentralized computing and open source software.
Perhaps ironically, Facebook banned cryptocurrency ads on its platform to curb “deceptive promotional practices” in January. Facebook’s CEO and founder spoke out regarding the Cambridge Analytica scandal for the first time on Wednesday, indicating that he is “really sorry” and that he is “happy” to testify in front of Congress.
The decentralized nature and anonymity offered by the cryptocurrency space also comes with risks, causing governments around the world to double down on efforts to control the high flying space. This week, news broke that the U.S. National Security Agency (NSA) has made it a top priority since 2013 to monitor the bitcoin blockchain in efforts to help track down senders and receivers of bitcoin. As part of a larger counterterrorism push, the NSA’s bitcoin surveillance project analyzed global internet traffic and used unnamed software to “look at organized crime and cyber targets that utilize online e-currency services to move and launder money.” (See also: Why The Facebook-Google Digital Duopoly May Be Dead.)
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