- • Google and Facebook aren’t the only ones mining your data
- • The SEC will have to decide on ICOs’ status
- • More proof that you can’t trust the “trusted” intermediaries
Google is jealous of your car…
Your car is spying on you.
It knows your daily driving habits. It knows if you like to speed. It knows what temperature you like the car to be. It knows what music you like when you are happy… and what music you like when you are sad.
It knows how often you talk on your phone. And if you are generally pleasant… or often angry. It knows where you live and work… and how much money you make. It even knows how much you weigh… and whether you have been recently gaining or losing weight.
Simply put, your car has access to behavioral data Google wants.
Most consumers aren’t even aware of it, but all modern cars have telematics systems that connect back to the manufacturer over wireless networks. That allows the car to transmit the data it collects from its systems, sensors, and speakers back to the car company.
This might sound shocking, and it should. While many are lashing out at Google and Facebook for their business practices of collecting user data and selling it… guess what? Car companies are looking to do the same thing.
Some might argue that Google’s and Facebook’s services are “free,” so they are fine to make money through advertising revenues. The nuance, of course, is how they do it, how they inform the consumers, and whether or not they are able to keep the data safe. History has proven that neither has been a good actor.
Yet in the case of a car, it is the consumer that paid for the product. And consumers pay a lot of money for an average car. We would think that we would have the privacy and security of owning something that we paid for… think again.
Your car company got your permission to collect, use, and sell your data. That’s right… They told you up front they would do this… And you agreed.
If you have a newer model, the legal agreement was in the paperwork you signed when you bought the car. It was in the fine print that nobody reads. It says the car company can do whatever it wants with the data on you it collects.
Of course, they say it’s to improve safety and performance. Really, they are selling it to make money.
Ford CEO Jim Hackett has spoken openly about this.
Hackett in an interview:
So the case I would make is that we have as much data in the future coming from vehicles, or from users in those vehicles, or from cities talking to those vehicles, as the other competitors that you and I would be talking about that have monetizable attraction.
He sees selling data as a way to smooth out uneven car sales. And research firm McKinsey estimates that data from cars will be worth $750 billion by 2030.
We have talked before about how Google wants to get in your car. Well, this is why. There is a gold mine of behavioral data just waiting to be sold to the highest bidders collected from our cars.
This is why Google has invested so heavily in its automotive software for both the infotainment module and, ultimately, self-driving car technology. Google will likely give the technology away for “free,” as long as it retains the right to sell the data collected.
There is one car maker that is not exploiting customer data, however. And one that might surprise you… Tesla.
Tesla does not sell or share user data with third parties. Instead, Tesla uses this data to improve its artificial-intelligence (AI) algorithms. It’s somewhat ironic.
Tesla, a bleeding-edge tech company in Silicon Valley, is behaving well; and the incumbent players are the ones looking to monetize our private data from our cars.
Tesla’s true value has not yet been realized. It is one of the most advanced AI companies on the planet… And that’s far more valuable than selling data to advertisers.
The SEC is about to tip its hand on ICO regulation…
Back in September 2017, messaging platform Kik raised $98 million in its initial coin offering (ICO). But last November, the Securities and Exchange Commission (SEC) issued Kik a subpoena, saying the company may have violated securities laws.
Remember, an ICO is like an initial public offering (IPO) in that it is a way to raise capital for business purposes. But where an IPO sells equity in the company, an ICO sells a digital token (a cryptocurrency).
If you recall, ICOs were widespread in 2017. The cryptocurrency market was hot, and holding an ICO was an incredible way to raise capital to build a company.
The regulations weren’t clear at the time, so many companies were experimenting with ICOs, most of which considered their token offerings to be utility-based – or based on usage, rather than a securities offering.
But ICOs have slowed down dramatically, due to the SEC’s enforcement actions that suggest the SEC feels most ICOs were, in fact, securities offerings. That’s why the Kik case is important. It will set a precedent for how the SEC will treat ICOs going forward.
The heart of the issue is whether Kik’s cryptocurrency, Kin, is a security or a currency.
A security is a fungible financial instrument like a stock or bond. Securities fall under the SEC’s regulatory jurisdiction. A currency does not fall under the same regulations.
Now, Kik was a compliant, well-run ICO. The company’s messaging platform already had 15 million active monthly users… And it launched Kin to give those users an efficient means of transacting with each other.
What’s important to know is that most ICOs were raising money to build a product when they didn’t have one at all. In the case of Kik, it was already a well-established company.
With Kin, users can purchase digital goods… pay for services… or even tip each other in small amounts, all from within the network. That’s far faster and cheaper than trying to do so with fiat currency.
This made Kik different from most blockchain startups. It wasn’t raising capital to start a business or develop a product. Its ICO was to enhance its existing business.
For this reason, Kik responded to the SEC’s subpoena with three counterpoints:
• Kin is a currency, and that’s how it’s being used. In the last month, over a million people earned Kin from 40 different apps… from 40 different companies.
• Kin’s ICO was focused on network usage. It was not to start a new business.
• The ICO was compliant with Know Your Customer (KYC) and anti-money-Laundering (AML) laws in the U.S. and Canada. And Kik paid taxes on the ICO revenues.
The fact that Kik, or any other blockchain company, received a subpoena does not mean they are guilty of doing anything wrong. It also doesn’t mean that there will be an enforcement action. So, the blockchain industry is watching this case closely… And a decision is coming within the next two weeks.
Kik responded to the SEC’s subpoena on December 10, 2018, and the SEC must decide on enforcement action within 180 days of such responses.
That means it has until June 8 to decide how it will treat the Kik ICO. And this decision will likely shape the blockchain industry for years to come.
The biggest privacy leak in history…
News just came out that First American Financial Corp. (FAF) – a company that specializes in settlement services for mortgages – placed 885 million sensitive mortgage documents at risk, going all the way back to 2003.
We are talking about anything and everything a cyber criminal would need to steal identities and break into bank accounts. Social Security numbers… driver’s license numbers and photos… physical addresses… bank account numbers… employment information… credit history… tax records… information on wire transfers… A gold mine of data.
First American simply uploaded these documents to the internet for anyone to see. No encryption… No passwords… Anyone with the web link could access them.
If you were a First American customer and you simply changed one number in your web link, it would pull up somebody else’s documents.
The average person would not think to do this… But hackers certainly did. In fact, hackers often use bots that crawl the internet and index all web pages for them. They focus on companies with large pools of valuable data, like First American.
So, it’s a near-certainty that First American’s documents were compromised… But we don’t know the extent of the damage, yet. That means this story is just getting started… And that does not bode well for First American or its stock price.
This is precisely the reason why blockchain technology – with its decentralized, immutable ledger technology that is cryptographically secured – will continue to gain widespread adoption. With a blockchain-based solution, you no longer need to rely on one institution, “trusted” party, or corporation to safeguard our data.
As we have seen over and over again, we can’t always trust the “trusted” intermediary. And First American Financial’s nonexistent data security management is one of the most appalling oversights I have ever seen.
Editor, The Bleeding Edge
P.S. Before you go, one last thing…
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