Facebook's data privacy fallout could give a boost to the online ledger underlying bitcoin: Analyst
- Privacy issues on social media platforms such as Facebook will help blockchain technology grow, says RBC Capital Markets analyst Mitch Steves.
- He says blockchain will allow users to see exactly which data is being shared and with whom. But, he says, it will not be able to prevent misuse of data.
- "You can 100 percent track all this stuff," he says.
The Facebook fallout could be good news for blockchain technology, said Mitch Steves, analyst at RBC Capital Markets.
"In the future, someone like yourself no longer has to give their photos to Facebook," Steves said Wednesday on CNBC's "Fast Money," on how blockchain would work with social media. "Instead, you could just share that photo specifically with people, and then you'd be able to track it and make sure it's not shared with someone who gets access to your information."
"You can 100 percent track all this stuff," he said. "I think that's where we're going long term."
While blockchain, the online ledger technology underlying bitcoin and other cryptocurrencies, would allow users to keep tabs on their data and how it is being shared, it would not allow users to prevent misuse in the first place, Steves said. "Blockchain would solve the transparency issue, but it would not solve the control issue you have."
Privacy issues came to the fore after The New York Times and the Guardian's Observer reported Saturday that political data analytics firm Cambridge Analytica improperly gained access to personal data of more than 50 million Facebook users. Despite being aware of the misuse since 2015, Facebook did not alert its users.
Facebook founder and CEO Mark Zuckerberg spoke out on Wednesday for the first time since the news broke. In a Facebook post he wrote, "We have a responsibility to protect your data." But the stock tumbled considerably this week.
"Big tech and the centralized control isn't working," said Susan Och, senior fellow at the nonpartisan think tank New America.
"This is why distributed ledger technology is taking off," Och said on "Closing Bell" Wednesday.
Despite the recent declines of bitcoin and other digital currencies, Steves predicted that cryptocurrencies and the underlying blockchain technology could swell into a $10 trillion industry within the next 15 years. The use of decentralized computing and open source software will help this market develop, he said.
Bitcoin was one of the first applications of blockchain technology nearly a decade ago. The same technology has been used by developers to create other digital currencies.