Why Blockchain Alone Can’t Fix Facebook

Centralized organizations like Facebook threaten our data and our society. But how can we build real solutions?

Facebook is broken.

We’ve known this for a long time. We’ve known that user data has been exploited and threatened long before the Cambridge Analytica news broke. We’ve known that Facebook siphoned our private data, transferring value from individuals to institutions. We’ve known that they’ve misrepresented their own data to marketers. We’ve known they’ve broken any number of laws.

However, we haven’t known what to do about it. Calls to quit Facebook have not impacted user growth. With every failure, we claim — “This Time Is Different.” And yet, it isn’t. Facebook is addictive, and social pressure is strong.

“[Facebook] is wildly expensive in terms of privacy lost and cash spent to steal that privacy. It is the perfect tool for marketers, a user-generated paradise that is now run by devils.” John Biggs

We’ve lost all faith that Facebook can somehow fix itself. Their business depends on this systematic exploitation of data. To convince users to move on from Facebook, we need to create meaningfully better systems, using new technology and new incentives. We need to create systems that are more decentralized.

When we think of decentralized technologies, we often think of blockchains — distributed systems that excel at tracking transactions and events. But for problems like Facebook, where data privacy and security is threatened, blockchain may not be the answer we think it is.

So why is Facebook so broken? How can blockchain help us build? But most importantly, where does blockchain fall short — and what do we need to create real solutions?

The Dangers of Centralization

Bitcoin and blockchain arose as a direct response to the financial crisis that began in 2007. The crisis was the result of a centralized banking system, “too big to fail” institutions and opaque derivatives that nearly destroyed the global economy. Bitcoin was a decentralized financial system, a response to the dangers of banks gone wild. The Bitcoin genesis block even references bank bailouts.

Now we face another crisis — a data crisis. On its face, it may seem less catastrophic than the financial crisis, but it has dire consequences for users who have unwittingly (or even willingly) participated. And it has the same cause — over-centralized institutions and opaque policies and systems.

The banks claimed that only they could value the complex financial instruments like mortgage-backed securities that made up their bloated portfolios. It turned out that no one could value them. They claimed to protect the funds of clients. They couldn’t protect their own businesses. They failed.

Facebook — and other centralized platforms that turn our personal data into ad slots — are in essence claiming that only they can be trusted to find and extract value from our data. They claim that only they are qualified to protect it. And now it is obvious they are failing.

There is no incentive for Facebook to fix its policies, beyond government intervention. It is “Too Big To Fail.” It is the largest social media company, composed of the largest social media platforms. By weaving its way into our social fabric, Facebook created a parasitic, not symbiotic relationship with users. It chewed away at our data and hollowed us out. And when it overate, it began to leak our data to untrusted parties. It probably swung at least one election.

We are living in a challenging era. We are just beginning to understand how our data is used without our consent and knowledge, at the expense of our own privacy and at times, our democracies. In an age where we call data the “digital oil,” centralization of access to data presents significant threats. We deserve answers to the questions: who has control over our data, who has access to our data, how is our data used? We need a real solution for data privacy and security.

Bitcoin was a response to a financial system that worked extremely well for an extremely small group of people, but that hurt the majority of the society. Facebook works extremely well for Facebook — but not for us. And this, of course, is by design.

The financial crisis still lingers. Now the data crisis is here. How will we respond — before it is too late?

A Decentralized Solution for Privacy

It is tempting to look at the data crisis and think, “blockchain can solve this.” And yes, to respond to crises caused by over-centralization, we need more decentralization. But when we look more closely, we see that blockchain is not quite the decentralized solution we need.

There are elements of the data crisis that blockchains can address. Blockchains bring transparency and correctness to systems. We could have seen publicly whom Facebook is sharing our data with and for what purposes. We could have identified how echo chambers were being created on Facebook’s platform.

However, blockchain could not have prevented the bulk of this crisis. Entities like Cambridge Analytica would still have accessed our data, our likes, and our network. They would have found ways to spread divisive messaging and help conduct a misinformation campaign.

This is because while blockchain is great for correctness and transparency, it fails in privacy. Today, as blockchain is applied to the financial system, we see all transactions that have ever taken place. In a future where we have decentralized social networks, we will see all likes, posts, and connections. In other words, blockchains alone cannot give people the control over their own data.

So we need a way to give individuals control over their data within a decentralized system. The answer is not blockchain — it is a complete privacy protocol that includes a blockchain. Using advanced methods of cryptography, we can empower our society with data, yet give us the control over where and how our data is used. This area of computer science is called secure computation.

In more understandable terms, secure computation deals with the following question: how can we process information we cannot see, while still obtaining insights that advance our society? How can we analyze data without exposing the data itself? While this sounds like a magical black box approach, it actually works. With privacy protocols, we enable true decentralization — free from the risks of centralized systems, and more powerful than what blockchain alone enables.

We can imagine a decentralized social network, where nodes can sign smart contracts to indicate friendship. Pictures can be stored on IPFS and selectively shared. Podcasts from DotPodCast can be shared throughout this network. The underlying database that tracks your activity can be stored on a node you run or distributed throughout the nodes of the privacy protocol. If an OpenBazaar merchant wants to target you for advertising, you give consent that your data can be used by smart contracts that are developed for targeting. You can even get back the value of your own data. When all this happens, an individual can truly control her own data.

It is important to note that we are a couple of years away from having a functioning decentralized social network. It’s also important to note that we are making significant simplifications above. But most importantly, this vision is really possible.

This is what we at Enigma think about when we envision a truly decentralized future. We imagine real solutions to the data crisis. We imagine going beyond blockchain, using secure computation and other techniques to build better systems.

What we’re building is a privacy protocol — a complete answer that’s more than a blockchain. With Enigma, we want to build a better Facebook, a better financial system, a better identity solution, a better healthcare industry. We want to create and implement the best technologies to create a better, more secure, more sustainable world — before the next data crisis comes.

Do you want to learn more? Do you want to build with Enigma? Do you want to help us create real solutions? Learn how you can get involved below. Together, we can make a truly decentralized future.

We write often about these issues on our blog: blog.enigma.co

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