Bitcoin’s blockchain is known for its unprecedented security measures, transparency and immutability, which altogether makes the protocol and network robust. The decentralized nature of Bitcoin also prevents data manipulation and surveillance, that are causing significant issues regarding security and privacy for large-scale online platforms.
Government data requests sent to Facebook increased by around 27 percent since 2015, recording 60,000 requests in the first half of 2016. In summation, government and law enforcement data request per annum will surpass 100,000 cases.
Compliance with law enforcement and local authorities is understandable as the failure to do so could result in serious consequences and multi-billion dollar lawsuits. However, the sheer number of these requests is overwhelming, as it suggests that over 100,000 users were surveilled and investigated by the authorities.
More importantly, these users were spied by unknown entities without any notice, which makes the matter even worse regarding privacy and security. Facebook cannot guarantee that your information will be used for an appropriate cause.
Before criticizing an entity’s compliance with regulations and a staggering number of surveillance cases, it is necessary to evaluate the platform’s infrastructure. One major feature of Facebook’s platform that allows law enforcement or government agencies to spy on users is the creation of a purposely designed backdoor system, that grants Facebook to delete, manipulate, censor and alter any data on their platform.
Such level of control and monopoly over user data could result in severe consequences. In possible cases of a data theft or cyberattack launched on either Facebook or related government databases, the private information and financial data of users could be leaked.
Most users and individuals using online social media platforms fail to realize the seriousness of privacy and security issues within the platform. Take bitcoin wallet platforms as an example, Facebook’s manipulation of user data is equivalent to a wallet platform or a bank’s manipulation of user funds. Custodial wallet platforms or exchanges that hold user funds for the user can create false balance sheets and remind users that their funds are in their wallets when in fact they are not.
The traditional financial industry widely utilizes this sort of system; wherein banks will not be able to process even 10 percent of cash withdrawals if its entire clientele simultaneously decided to withdraw their money. In simpler terms, the number on a bank account is a guarantee that the bank will compensate its customer for the equivalent amount but does not necessarily represent actual holdings of the consumer, unlike non-custodial wallet platforms.
Non-custodial bitcoin wallet platforms enable users to control their private keys and hence, their funds. Thus, even if their platforms fall victim to a hack, user funds will be safe. However, banks and backdoor software-based social media platforms cannot provide users with a full guarantee in regards to the safety of their money or data.
The Facebook law enforcement compliance case is relevant to bitcoin and FinTech markets as the multi-billion dollar company currently operates peer to peer money transmission services. It plans to launch more services and features in the EU region in 2017.
However, Facebook is requested by governments to send out over 100,000 data sets of its users, financial information and private data of users are in jeopardy, rendering their P2P payment systems unreliable and inefficient.
Also, the mainstream media, including the BBC and the New York Times, criticized the social media giant in November for the creation of censorship tools directed at certain populations and regions. The coverage from the two media outlets stated that Facebook created a censorship tool for the Chinese government in return for access to the Chinese market.
“Unveiling a new censorship tool in China could lead to more demands to suppress content from other countries,” reported Paul Mozur.
Ultimately, Bitcoin startups are expected to lead the cybersecurity and defense markets in the foreseeable future, by demonstrating the importance of non-backdoored software and hardware. Before the emergence of bitcoin platforms, users struggled to see the necessity of secure and robust networks. Bitcoin startups and developers have spurred the supply of non-backdoored software and hardware, allowing the general population to develop an awareness of it.