Localflow Privacy & Ethics

The full article was originally published by Localflow on Medium. Read the full article here.

DATA and ADVERTISEMENT Driven Economy vs Sharing Economy network

Year after year e-commerce and sharing / gig economy platforms are increasingly becoming the first option to achieve many products or services, but at the same time these platforms are becoming more and more invasive regarding users’ privacy.

Through data analysis this companies are collecting patterns on every single operation users do, details about preferences, tracking of visited websites, behaviors that through AI can maximize marketing efficiency. Just because these companies know exactly users’ tastes, opinions and even psychological characteristics, this knowledge can be so profound to pursue even the manipulation of their needs and desires.

Company as Facebook, Google Amazon, Spotify, Uber (and many others..) radically changed the former idea of business. They have dematerialized their income assets and can maximize income thanks to data provided by users for free (or sometimes even paying).

Ok, so far nothing new, but…

When Globalized companies are mapping digital activities, linking information to extended communities, the priority for this companies can be synthesized with the terms of sharing through horizontal relationship their own digital platform.

This network effect gives free service to the masses and high centralized capital gains to this global companies.

In an ideal community when a data driven business reach a critical mass to become efficient, the company is able to create habits, limiting others businesses ability to join into competition. Today is difficult to listen to music in alternative ways when our friends always share us Youtube videos or Spotify links.

Data and the relationship between users creating and providing data to the platform are now the ground where this kind of business lays on. Unfortunately, this companies create an imperfect competition within each industry.

They have very little infrastructural cost by nature, thus the power of accumulation of capital is pretty fast and asymmetric. Many sharing economy services create a searchable and closed network that gives them high economical power to the data owners or providers on that single niche segment (e.g. Airbnb on room reservations or BlaBlaCar on transport sharing).

Moreover, the centralization of an industry lead to the destruction of local wealth. No taxi agencies can compete with Uber, and no chain store of libraries with Amazon, anymore.

“The profits are all based on the user’s info, but the users get none of the profits back. […] Apple makes its money off of good products, not off of you. As they say, with Facebook, you are the product.”

– Steve Wozniak

You’re probably familiar with Cambridge Analytica, the firm that harvested data on 87 million US Facebook users. This case is not alone, in recent years a batch of surveillance companies, operating in a far more clandestine manner in comparison to Cambridge Analytica and its partners, have been infiltrating all kinds of social media platforms.

These spy-tech vendors are offering services not only to co-opt and influence social media groups with sock puppet accounts, but will even deliver spyware via the fake profiles they create and send across different platforms.

“Big surveillance companies are only able to do this because they exploit a broader ecosystem. Fundamentally, Facebook and other companies have a responsibility to protect their users”

warned Edin Omanovic, head of Privacy International’s State Surveillance project.

Facebook changed its policies to stop allowing app creators to access data about users friends unless the user’s friends had also authorized the app, however some vulnerabilities are still there.

… is free service a fair compensation for users data?

… is the use of these platforms really free?

According to some data reported, a fan is worth less than 5 dollars a day (calculating that Facebook in 2016 recorded a growth of 51% of revenues with a turnover of 8.81 billion USD and an audience of 1.86 billion subscribers).

According to Social Flow, a fan is worth $14.17.

Services such as Value of a Like or Instagram money calculator show quite simply the value range of an Instagram page, a Facebook Like and the engagement that they can reach on their pages. This value is therefore real and is paid by users.

What is the currency to pay for these “free” services? Users attention.

The lack of trust is definitely justified as the right for privacy is mandatory.

“No one shall be subjected to arbitrary interference with his privacy, family, home or correspondence, nor to attacks upon his honor and reputation. Everyone has the right to the protection of the law against such interference or attacks”

12th article of The Universal Declaration of Human Rights

In 2017, the data flow was worth $200 billion and it will grow at a compound annual growth rate (CAGR) of 11.7%.

Data analysis can be useful and AI helps users to be matched easily with what they could like and need, but they should have a compensation and control over data they provide.

Is not acceptable anymore to be treated as unpaid data factories.

What we, as Localflow, want to structure is a radical change on the Data economy, giving users and businesses access and control on what they are providing and sharing, rewarding them for the growing of the ecosystem.

Localflow wants to bring a local decentralized ecosystem to life, making possible to local services to emerge.

We aim at revolutionizing the local economy: granting total privacy for users and by the other hand improving small local shops and entities visibility.

So that who really is moving local economy like shops, cinemas, groceries, plumbers and so on, will show they data, working hours, calendars, products or services provided, but users will be able to control shared data.

There will be no prerecorded personal data, and will be possible to erase completely search history and bot answers.
Localflow don’t want to know who you are and what you do, because we will not make value from selling personal data, they will not be given or sold to third party companies or organizations because they are never collected in relation to a single person. Data will be used only for anonymized general statistics without possibility to relate them back to specific users.

So in this model, it is not necessary to exploit personal information because the whole technological infrastructure will be sustained by small and fair fees on the local economic network, real sharing economy services and local marketing campaigns.

Blockchain technology can help to maintain online privacy, having digital identity connected with their id on telegram or in the Localflow platform and an anti-money laundering Digital certificate connected with subledgers. So legal compliance and privacy could match parallelly.

At the same time service provided now by workers in many gig economy companies, such us in transportations or delivery that are subjected to low gains and fractured work hours, could find a new more respectful working structure.

Decentralization as the core of privacy

Centralization of data: a company has in its hands our data and even our reputation. This lead to the effect of a single point of failure (SPOF) vulnerable to hacks and malevolent use.

The application of Decentralized Ledger Technologies is perfectly suitable to resolve the SPOF problem and the concentration of data. A distributed and decentralized data storage is key to take worth data off from companies that have been selling our information as their own cash flow model.

How to make it possible? How can an individual be part of a decentralized network? Localflow gives to local business and entrepreneur “user-friendly tools” to start this revolution and get involved into the local community and local chats.

The first tools the Localflow will provide are a network of chatbots, that can be considered as “Artificial Conversational Entities”.

This chatbots are small programs, that can be launched on many different mainstream platforms (Facebook Messenger, Telegram, Wechat, Amazon Echo, etc…), which can conduct a conversation via auditory or textual methods.

They are commonly used for B2C customer service, sales and marketing.

But as we know, the most of nowadays chatbot are centralized, leading that owner’s company can check and sell personal information to third party entities.

Localflow, instead, will use the protocol named Masked Authenticated Messaging (MAM) provided by the IOTA foundation to warranty privacy to consumers. Getting deeper, MAM is used as the message dispatching mechanism for any chatbots in the Localflow network.

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The full article was originally published by Localflow on Medium, where people are continuing the conversation by highlighting and responding to this story.

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