Decentralized data can limit breaches | Information age

How safe is your data right now? Image: Shutterstock

Decentralizing data and identity services could be one way to mitigate the impact of the data breaches that have seen Australians lose millions of identity documents to cybercriminals and fraudsters over the past year, a panel at a recent Australian Computer Society (ACS) Think Tank event has proposed.

During the recent discussion on cryptocurrency, Karen Cohen, founder of the blockchain education organization AlgoHUB, said that it was a way out of existing requirements that companies such as Latitude Financial or the health insurance company Medibank handle and store identity documents.

“We want to own our own ID,” she said. “We don’t want Medibank to be hacked and then we struggle to get a new passport or a new license because they’ve held on to that document for 10 years.”

Cohen prefers a way to verify data without handing over the associated documents, using blockchains to store and authenticate the information.

“We should have that control,” she said. “It’s not a technical problem – we can build it tomorrow on the blockchain – it’s an adoption problem.”

Nathan Burns, co-founder of training company Blockchain Collective, said decentralized data was a way to reduce scalable attacks against individual service providers.

“The more honeypots you have, the more goals you have; the more data you have in one place, the more [attackers] are willing to invest in it,” he told the ACS Think Tank event.

“If you decentralize the data, decentralize the identities, an attack can only get one person’s data instead of the 100,000 people’s data they’re currently getting.”

Unfortunately for blockchain adoption, the recent bubble of interest in cryptocurrencies has burst following the collapse of FTX, the recent arrest of Terraform Labs co-founder Do Kwon, and US regulators this week announcing a lawsuit against Binance.

For blockchain enthusiasts, the conflation of cryptocurrency and blockchain only hinders the dream of decentralized data and sovereign identity services that they believe will make for a better internet.

Austin Lewinsmith, who co-founded the Blockchain Collective with Burns, said there needs to be education across the tech sector to bring awareness to non-crypto use cases of the technology.

“When you start talking about blockchain being used to track supply chains or logistics … or being used to track digital assets in ecosystems, people say ‘it’s cryptocurrencies, so it must be a scam’,” he said.

“There is a war on terminology, and it definitely has to be about education.”

Burns agreed, adding that for most, the most important thing is whether the technology works.

“Is it more efficient? Does it save me time? Does it save me money? That’s what people care about, he said.

“We’ve built a ton of applications over the last six years or so in the blockchain space, and we don’t even mention that it’s blockchain, we just build the solution and happen to use the technology.”

Interest in blockchain may be waning along with crashing crypto prices, but there remains optimism that Australian developers can tap into the technology and use it to build products for companies that could one day see fewer breaches and greater data control given back to individuals.

But Mohammed Khaita, chair of the ACS Blockchain Committee, said there must first be greater clarity from local regulators to help legitimize the technology’s use.

“We need to have clarity on the regulation of digital assets, on taxation, on reporting, we need to have really clear frameworks that will enable innovators to flourish and invest in the first place,” he said.

The ACS has urged the government to provide stronger regulation of crypto exchanges in its submission to a recent Treasury discussion paper, saying “uncertainty around regulation is a major barrier to the technology right now”.