Can blockchain help companies combat data breaches? The co-founder of the decentralized cryptocurrency platform Ethereum thinks so.
“On the web right now, I would argue that identity is broken,” Joseph Lubin said at the South by Southwest Interactive conference last week, according to TheStreet. “We spray aspects of our identity around the web, it’s stored on corporate servers and is monetized by corporations, and often aspects of your identity aren't well secured by those organizations.”
While data breaches expose a company’s vulnerabilities, they also reveal the weaknesses in sanctioned currencies such as U.S. dollars, euros, and yen, which offer no protection or anonymity during transactions.
Ethereum’s technology — called “Web 3.0” — changes the way data is collected, stored and controlled by placing each of the privacy “bundle of sticks” with the owner, which is often an individual.
“Instead of the client server architecture — where you've got one company, say Google or Facebook, that has a bunch of servers, and we’re interacting with them as a counter-party — this new kind of application paradigm has all the different nodes on the network, and they are all effectively the back end for the application,” said Lubin. “So nobody is in control of it, and you can build these platforms where no one's overly monetizing it.”
Lubin added that while consumers might be skeptical of the technology, they don't need to understand it in order for it to be useful to them. “The depths of blockchain won't be understood by the masses ever. We need software engineers to understand blockchain,” he said. “Consumers are just going to keep using the world wide web, they're just going to have a different relationship to the world wide web and those applications.”
And consumer transactions are just the beginning, according to venture capitalist Tim Draper: “Governments might run more efficiently on blockchain. Healthcare and records can be better managed on the blockchain. Real estate can be titled on the blockchain. The best governments are embracing the change. The worst are denying the progress.”