Can a Consortium Controlled Blockchain Protect Individual Consumer Data?

December 23, 2018 / by Steven Lubka

Next year is shaping up to be a big year for blockchain and cryptocurrency and will see the launch of several major industrial platforms that offer either distributed ledgers solutions or cryptocurrencies.

Bakkt is a well-known initiative that will offer the easy ability to accept Bitcoin to a wide variety of corporations while also providing futures contracts with physical delivery. It launches in early 2019.

What was unexpected, however, was for Comcast to launch a blockchain initiative commercially in 2019.

Comcast announced the move in a Dec. 21 press release. It is currently working with Viacom and Spectrum Reach to roll out the platform that aims to be “The Identity Layer” for TV audiences. More companies will soon be added to the offering.

What is Blockgraph and what is its goal?

Blockgraph at its base layer is peer to peer software that lets media companies better use consumer data at scale while still protecting the consumer’s data. To do this, Blockgraph enables blind matches with participant data.

By using encryption protocols likely similar to “Zero Knowledge Proofs,” a technique invented in 1985 by cryptographers and made popular by the Z-Cash(ZCASH) protocol. The Blockgraph encryption protocol allows media companies to match advertisements directly to consumer data without ever seeing or having direct access to individual consumer data.

This is made possible through the Blockgraph software, which directly matches the encrypted results of data, not the data itself. The software also features an identity layer that allows each consumer’s data to stay on its own system, a feature that pays homage to the digital self-sovereignty pioneered by Bitcoin and other cryptocurrency projects.

On the surface, Blockgraph is an exciting implementation of principles championed by cryptocurrency and blockchain projects. Using encrypted blockchain systems to manage privacy is not a new concept. Projects like Basic Attention Token (BAT) and others have been talking about similar approaches, but this is the first time a company like Comcast has put its weight behind a system with these principles.

Unfortunately, there is still an elephant in the room. Is Blockgraph a truly decentralized protocol? We don’t currently have all of the details on how Blockgraph will actually be implemented, and this leaves critical questions unanswered.

David Kline, executive vice-president and president of Spectrum Reach, said:

Comcast has invested in building the Blockgraph technology, but we do not want this to remain solely a Comcast-led initiative. We are inviting the entire TV industry to participate in Blockgraph so that it becomes a true industry undertaking,” said Marcien Jenckes, President, Comcast Cable Advertising. “When scaled, non-personably identifiable data becomes available to all, the focus shifts to what a provider is able to do with that data and how it can be used to drive outcomes. We believe that when advanced data capabilities are paired with TV and premium video’s awareness and engagement advantages, results will be difficult to beat.

Based on these comments, the natural assumption is that Blockgraph will be implemented as a consortium blockchain. This means that all of the companies involved in the system will be involved in managing the nodes that make up the network. This creates a system that is more decentralized that one where Comcast manages the whole thing, but it still presents many concerns.

A consortium blockchain can be compromised if enough parties collude, and if all of those parties are members of the same industry, the likelihood of collusion increases because of the shared incentives. It remains to be seen if the Blockgraph protocol can be decentralized enough to protect the consumer or if it will grant undue influence to the parties that maintain the network.

Without more information on the technical specifications, we can only speculate. It is impossible to truly anticipate the risks and influence that network nodes might have or if Blockgraph even relies on a consortium of nodes.

It is important to remember that the value of blockchain comes from adopting a new approach to network management. Blockchains that are not decentralized are just shared databases and don’t offer meaningful benefits. To truly implement a decentralized blockchain solution means eliminating the ability of one entity or a group of them to control the system. It means Comcast will have to step back from its ability to influence Blockgraph.

This is a radical departure from how most companies think about their products and services. Will Comcast change its approach and create a decentralized identity layer for the television ecosystem, or is Blockgraph an industry controlled service that is going to be sold to advertisers?

We will be able to answer this question as more details about Blockgraph emerge, but it is encouraging to see how many popular blockchain principles are being put into practice in managing consumer data privacy through encrypted matching.

Blockgraph and efforts to decouple consumer data from the individual consumers could be a huge step in solving consumer data privacy abuses. But that will only work if there are protocols in place to prevent the system itself from being abused.