Social Media and Datadollars

Newsweek Cover MArch 2014
Newsweek Cover MArch 2014

The era of Bitcoin is over. I was under the impression that it set out to be a ‘Veni, vidi, vici’ story, but since the bankruptcy of Mt. Gox and various other reports of crashes and hacks, the credibility of the virtual coin has suffered greatly. What will be the next ‘digital currency’?

Now Bitcoin has crashed and is vanishing from the front pages, people are looking towards new possibilities of less-regulated alternative ‘digital’ currencies; Litecoin, Dogecoin, Coinye (?) are only a few examples of the cryptocurrencies that provide an alternative to the popular Bitcoin.

But why make the same mistakes again? One thing we have learned is that cryptocurrencies are unpredictable, hard to protect against hackers and not useful as currency. Besides… we already have a currency that has proven to be stable in the online, digital world…

Time Cover May 2010

User data

In my opinion, Google and Facebook are the two largest bank institutions in the world. Owners of large amounts of the online currency that has been around since the early beginning of the internet: user data. Their data centers are gold mines for advertisers. The value of accurate user data is priceless for commercial institutions.
People have a deep need for self-expression and social networking sites have proven to be the ideal platform to express their identity [2]. Moreover, deeply rooted in our concept of ‘justice’ is the feeling of a justified exchange of services for some type of reciprocal value [1]. Those two mechanisms serve Facebook. On the one hand they provide a service to their customers: free use of their platform for communicating with peers. ‘Free’? No, not really. Because, on the other hand, Facebook uses the personal information, gathered in the interpersonal communication process between their customers, as merchandise to sell to advertisers.

As already mentioned, people possess a sense of ‘justified trade-off’ [1]. I believe this kind of trade-off is also present in personal data exchange. I don’t necessarily have problems with disclosing personal data if I get something in return. However two conditions have to be met:
1. Prior and subsequent knowledge of to whom your data is sold.
2. The possibility of easily opting-out of data sharing and of deleting your data from online databases.
In other words; transparency and control are in my opinion crucial to justify this kind of trade-off [3, 4].

I think two actions have to be taken by governments in order to achieve this goal:
1. The implementation of regulations for online service providers, based on the two principles described above.
2. Efforts have to be made to increase media literacy at a young age in order to increase privacy awareness from a young age and to educate children on the data mechanisms in the digital world.

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[1] McKim, 1999 in Sheehan, K. B., & Hoy, M. G. (2000). Dimensions of privacy concern among online consumers. Journal of Public Policy & Marketing, 19(1), 62-73.
[2] Wang, S. S. (2013). “I Share, Therefore I Am”: Personality Traits, Life Satisfaction, and Facebook Check-Ins. Cyberpsychology, Behavior, and Social Networking, 16(12), 870-877.
[3] Xu, F., Michael, K., & Chen, X. (2013). Factors affecting privacy disclosure on social network sites: an integrated model.Electronic Commerce Research, 13(2), 151-168.
[4] Raynes-Goldie, K. S. (2012). Privacy in the age of Facebook: discourse, architecture, consequences. Curtin University.

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