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Ashley Madison Data & Privacy Bitcoin

Brands should take a lesson from Bitcoin to avoid their own Ashley Madison hack

By Ash Bendelow

August 19, 2015 | 6 min read

By now, most of you will have heard about last month’s hack of Ashley Madison, the controversial dating site for married people. On Tuesday night, the hackers decided to release the data after the brand ignored their demands to shut down the site.

Morality aside, this has resulted in thousands of people being exposed through a website in which they had placed their trust. Now, all around the world, people are sifting through the data, looking at the names, sexual preferences and personal information of people who had signed up to Ashley Madison’s services. While the site encrypted the passwords, it failed to encrypt any of the email addresses for people’s accounts, so I’m sure that in the coming days we will start to see some high-profile names attached to this leak.

Of course, this is only the latest in a series of high-profile data breaches – from WikiLeaks to the Sony Pictures hack. Personal data security has become a hot topic with consumers in the past few years: A 2014 study found that 91 per cent of adults agreed that consumers have lost control over how their personal information is collected and used by companies, while just 15 per cent said they trust what companies say in adverts. With a Warc report concluding that 39 per cent of people rank trust in an organisation as their top consideration when choosing a brand, this is a massively problematic issue.

At the same time, brand owners are extolling the virtues of big data. A quick search on this year’s SXSW panel picker brings up 107 different proposals discussing data in the branding and marketing section. It is one of the top talking points within our industry and, everywhere you go, people are discussing the amazing things data will allow us, as brand owners and marketers, to do. Personalisation and consumer targeting are high on the agenda of any brand owner, and the opportunities these can open up are rightly seen as endless.

However, brands are often naive about balancing the personalisation opportunity with the very real concerns that consumers have regarding their privacy. Public opinion on personalisation seems simple – when asked, 70 per cent of consumers said they wanted more personalised shopping experiences. Looking at this alone could lead us to making very gung-ho moves into customisation and targeting… but the personalisation perspective is only half the picture. While consumers massively value personalisation, when questioned further it’s clear they don’t want to compromise their privacy to achieve it. In fact, they hold two opposing views, which is creating a lot of tension that brands need to be wary of.

So how can we overcome these challenges? How can we deliver consumers the personalised and targeted experience that they want, without compromising on their valued privacy?

A good reference for brands to look to is the Bitcoin payment system and, specifically, the ‘blockchain’ technology that powers it. Blockchain is a huge technological breakthrough that provides the security which has driven the rise in the adoption of Bitcoin as a viable online currency. It’s a secure database shared by everyone participating but owned by no one. It records and stores every transaction that occurs on the network, and because it is completely decentralised, responsibility doesn’t lie with any single party. It is also completely transparent – anyone can see every transaction taking place on the entire network, and no single entity can take control of it. Blockchain is heavily dependent on cryptography and, so far, has proved impossible to crack.

The blockchain system was set up to create a “transfer of trust in a trustless world”, and it has done so brilliantly. The people using this system are able to exchange value with surety, with no need for third-party validation that might open a window to cyber criminals. Bitcoin users have full transparency on what data they’re offering, and on who knows what about whom.

This approach has a lot of adjacencies to the challenges faced by brands. Both brands and blockchain technology want to give people the confidence to take part in a value exchange. We want to offer personalised and targeted comms, but we don’t want to breach any privacy barriers. Because blockchain technology has overcome this – by taking the data away from the private control of brands and decentralising it – instead of hiding it away in a dark corner of the internet, waiting for hackers to strike, it puts it out in the open for all to see.

Transparency, encryption and decentralisation are key to the tech’s success, acting as three pillars that brands can learn from. As consumers place an increased value on their privacy, there will be an increased onus on us, as brand owners, to protect that data and build trust. We need to be more transparent about our use of data, we need to ensure we’re fully encrypting personal information (unlike Ashley Madison) and we need to look to emerging technologies (like blockchain) that focus on decentralising information.

Brands such as Ashley Madison must place a much higher focus on respecting that value exchange – or risk getting caught with their pants down.

Ash Bendelow is managing director of Brave

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