Facebook, Google, and other major hubs of personal data have come under increased scrutiny over the past year due to high-profile data breaches, lack of privacy, and revelations around the ways in which Internet companies handle user data. Although it often seems as if no one cared about the security of their personal data in the past, 2018 has seen an awakening in terms of just how much some of these Internet giants know about their users.
As the old meme goes, this is good for bitcoin.
Internet Users Want More Privacy
Before getting into how this change in the consciousness of the average internet user affects bitcoin, it’s important to look at the data to better understand this shift.
According to a recent report from the Pew Research Center, 44 percent of Americans between the ages of 18 and 29 deleted the Facebook app from their phones in the past year. In terms of all age groups, more than a quarter of Americans deleted the app.
This study came in the aftermath of the scandal involving Cambridge Analytica and the improper sharing of user data by Facebook and parties with access to that data.
It should be noted that Facebook’s overall userbase is still growing, as growth from older generations still more than makeup for the declines seen in teenage user growth.
Of course, the decision to delete one’s Facebook account or simply delete the app does not necessarily mean someone is thinking deeply about their privacy. A study from earlier this year indicated teens were simply moving to Instagram and Snapchat, the former of which is owned by Facebook.
Having said that, the Facebook numbers become much more interesting when contrasted with the growth of privacy-focused tools for using the web. For example, DuckDuckGo, which is a search engine that specifically talks about their focus on online privacy on their website, recently reached 30 million unique searches in a single day for the first time.
While DuckDuckGo’s numbers are still barely a drop in the bucket compared to Google’s more than 3 billion searches per day, the privacy-focused search engine has experienced 50 percent growth over the past year.
DuckDuckGo fun fact: it took us seven years to reach 10 million private searches in one day, then another two years to hit 20 million, and now less than a year later we're at 30 million! Thank you all ? #ComeToTheDuckSidehttps://t.co/qlSaz4j9ZH
— DuckDuckGo (@DuckDuckGo) October 11, 2018
ProtonMail, which is an end-to-end encrypted alternative to Google’s Gmail, has also seen major growth over the past few years, as the company recently revealed their userbase has grown to more than 5 million just this past month.
Many have touted the use of Ethereum as a base for decentralized social networking platforms, and while those applications have basically no user activity as of today, Mastodon is a quasi-decentralized social network that has been able to garner 1.5 million users as an alternative to Twitter, according to the software’s creator.
There is even growth on the hardware side of things in the form of Purism, which intends to be a sort of privacy-respecting and open-source alternative to Apple. The hardware manufacturer currently offers two different laptops and plans to release their first smartphone in 2019.
While there was plenty of online outrage in the aftermath of the Snowden revelations some years ago, Internet giants like Google still experienced tremendous growth in everywhere from revenue to user growth. Having said that, ProtonMail, Purism, and Mastodon also didn’t exist back then. With these new tools and platforms available, it’s possible that interest in privacy-conscious web platforms can become more than a passing fad, especially in light of all of the recent negative press received by many of the Internet’s largest corporations.
Cryptocurrencies are the Only Option for Online Financial Privacy
So what does the rise of DuckDuckGo, Mastodon, Purism, and ProtonMail mean for bitcoin?
If there are more people in the world who care about their online privacy and the protection of their personal data, then this should be bullish for the growth of the overall bitcoin userbase because bitcoin and other cryptocurrencies are the only options when it comes to private and censorship-resistant payments and value storage in the online world.
Bitcoin is essentially money as free software. If some Internet users do not want to share their personal data with large internet companies, why would they want to share their online financial data with the likes of Visa, Mastercard, or their bank?
If money is viewed as data, then banks look extremely similar to the Googles and Facebooks of the world. Much like users of platforms created by centralized internet companies can be locked out of their data, the same can happen with one’s money — those who have had their PayPal accounts frozen or been a victim of civil asset forfeiture are likely to understand this point better than others.
Online transactions made via a credit or debit card are also traceable, which sounds similar to Google reading their users’ emails. While bitcoin transactions are far from private today, the eventual goal is to add more opaqueness to payments through protocol enhancements such as Confidential Transactions, Schnorr Signatures, and the Lightning Network.
Today, most of the transactions on the Bitcoin network are easily tracked by a number of different blockchain analytics companies because every transaction is available for everyone to see on the public blockchain. Although, there are some useful tools, such as JoinMarket, available to Bitcoin users who wish to gain better privacy.
Privacy-focused cryptocurrencies like Monero and Zcash also already exist in the wild. Notably, the aforementioned Purism has plans to integrate Monero into their mobile software. A 2017 report from Europol found that Monero had seen a rise in popularity among those involved in the criminal underworld — who have an obvious need for enhanced privacy — due to the privacy and security features offered by the bitcoin alternative.
Obviously, bitcoin and other cryptocurrencies still have issues with price volatility and general usability, but those who wish to use the free software-equivalent of a digital money don’t have any other options at their disposal. This use of bitcoin as “digital gold” is what provides its underlying value proposition.