Differentiating Between Privacy and Secrecy on the Blockchain

There is a fair amount of confusion about the relationship between privacy and secrecy. This is especially true in the world of blockchain technology, where platforms like Bitcoin have traditionally been viewed as overly secretive.

In reality, one of the greatest benefits of the blockchain is that it makes it easy to achieve privacy without secrecy. When leveraged the right way, blockchain technology can protect private data without requiring murky, secretive operations.

What Is Secrecy? What Is Privacy?

Put simply, secrecy means withholding information, even from people who have a legitimate right to access it because it affects them. Secrecy can be a harmful quality.

In contrast, privacy refers to the ability of an individual to control the sharing of information that they rightfully own. Privacy is a right that we should all enjoy.

If you take the world of digital advertising as an example, it’s easy to see the difference between secrecy and privacy. Traditionally, the digital advertising industry has been highly secretive. Companies like Google collect information from users, then use proprietary algorithms to serve ads based on that information.

Under this model, users have very little control over how their personal information is shared. In many cases, they do not even know how or when data collection takes place. It’s all a secret.

For their part, even content publishers and advertisers rarely know exactly what is happening in the secretive world of digital advertising. They rely on intermediaries to serve ads to the right users, and those intermediaries operate behind closed doors. This lack of transparency has led to disputes like the claim in The Guardian that digital advertisers collect “secret commissions” that harm publishers and advertisers, among other issues.

If the digital advertising industry prioritized privacy over secrecy, it would not collect personal data about users without their consent. It would instead let them know how, when and in which forms their data is collected, and give them the option to opt out.

The advertising economy could be private without being secret for advertisers and publishers, too. The intermediaries who serve ads could make it clear to their customers how they make decisions about where to place ads, which fees they collect and so on. This would take the secrecy out of ad placement and it would not have to come at the expense of privacy. Information could still be protected from third parties, keeping it private.

Secrecy, Privacy and the Blockchain

If you’re new to blockchain technology, distributed ledgers might not seem to be a good solution for recording data in a private but not secret way. Blockchains store data using distributed networks of computers. Transactions are publicly recorded. These features are what make blockchain technology so powerful.

Yet the important nuance to keep in mind is that the fact that blockchain transactions are public does not mean that the data they record has to be public, too. It’s entirely possible to encrypt data on the blockchain, making it accessible only to people who have the encryption keys, even if the data is stored in a transparent, distributed fashion.

In this way, the blockchain can be used to remove secrecy, because anyone can verify transactions and ensure that data exists. However, the data itself remains accessible only to people who should be able to read it.

Smart Contracts

The blockchain can provide privacy without secrecy in another important way, too: smart contracts.

Put simply, a smart contract is a programmable way to ensure that if certain conditions are met, something particular will happen.

Smart contracts are an important resource for protecting privacy because they can automatically verify that something has occurred before performing a resulting action. They can do this without requiring human actors to review data that may be private.

To illustrate how blockchain technology can eliminate secrecy without compromising privacy, let’s go back to the world of digital advertising.

Imagine that you are an advertiser and want to ensure that the ad placement service you work with serves ads to legitimate prospects. To achieve this, you could write a smart contract that requires a prospect to meet certain requirements — to live in a certain area, for example, or have a certain browsing history — before the ad is served.

The smart contract would check to ensure that these conditions are met before serving the ad. If they’re not, the ad won’t be served, and the ad placement service won’t be paid. If the ad is served, the transaction is recorded on the blockchain, so everyone involved can verify that it occurred as expected, or know that it did not.

What makes this solution so innovative is that all of the information remains private. The ad placement service doesn’t have to share the source code of its placement algorithms in order to convince the advertiser that the ad was placed effectively. The smart contract verifies the effectiveness automatically. In addition, the personal information that is used to make the placement decision remains private, because no human is involved in reviewing it.

In short, by using smart contracts and the blockchain to control how ads are served, everyone wins. The privacy of all stakeholders is respected without compromising the accuracy of results. Plus, the process is fully automated through smart contracts, which makes it highly efficient.

The MAD Advertising Solution

Using blockchain technology to restore privacy to digital advertising and eliminate secrecy is at the core of the vision of MAD Network. MAD aims to protect the privacy of users while still allowing advertisers to reach audiences effectively and guarantee fair revenue to content publishers.

Learn more in this video.

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