by Joseph K. Hopkins
There is little separation between your physical and digital identity today. Whatever you do online — the sites you visit, the purchases you make, the posts you like and share — generate an indelible profile. Or as The Internet Society explains, “Everyday, whether we want to or not, most of us contribute to a growing portrait of who we are online; a portrait that is probably more public than most of us assume.”
Data’s Importance Cannot Be Overstated
At the heart of this digital portrait is data. Your data. Your company’s data. According to The Economist, “The world’s most valuable resource is no longer oil, but data.” It makes sense data has usurped oil’s prominence. In the age of electric driving cars and delivery drones, oil represents a stodgy industrial era vanishing before our eyes. “The S&P 500 Energy Index has almost entirely decoupled from oil in 2019 and is on course to underperform crude by the most since the shale revolution began a decade ago,” writes Kevin Crowley for Bloomberg News.
Meanwhile, data, the web’s lifeblood, has swooped in to fill the asset vacuum. The core commodity underlying our knowledge economy, data has boosted the fortunes of today’s highest valued businesses. According to Statista, four of the five largest global companies by market value in 2019 are tech firms engaged in data buying, selling, sharing, and speculating. Sometimes dubbed “attention merchants”, these multinationals trade in the knowledge of people’s online activities. “The main business of Google, Facebook, and Baidu is to collect data about what you do online and enable publishers and marketers to target you with personalized ads,” states the Internet Health Report.
3 Potential Risks
Yet, the asymmetry of power in this economic model presents unprecedented potential for harm in three key areas. Let’s begin with data privacy. To appreciate the problem, consider Facebook. “It’s free — and always will be,” goes the company tagline. Yet, we now know a clandestine, unequal value exchange has ensued for years through recent awareness-raising fare, like the academy award-nominated film The Great Hack and the book The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power by Harvard Business School scholar Shoshana Zuboff. But Facebook is not alone. Many tech giants, including Google and Amazon, have been deriving vast revenues from unwitting users. As media theorist Douglas Rushkoff explains in Wired, “We’re not the customers. We are the product.”
Meanwhile, data rights malfeasance in the form of intellectual property misappropriation is the second area. This represents a major concern with no signs of abatement. To this end, according to the IP Commission Report, the annual cost to the US economy well exceeds $225 billion when it comes to theft of trade secrets, copyrights, and patents, and could be as high as $600 billion. “IP theft pervades international trade in goods and services due to lack of legal enforcement and national industrial policies that encourage IP theft by public, quasi-private, and private entities.” More than ever, it is evident that safeguards, preferably enforced through emerging technologies, must be put in place to combat this formidable challenge. Artificial intelligence represents a viable solution, especially in the form of next generation authentication technologies that can definitively confirm the person creating the IP is the one profiting from its usage.
No less a threat than data privacy intrusion or data rights misappropriation, is the growing data breach epidemic, the third area. According to Market Watch, the number of reported intrusions this past year soared by nearly 20%. July alone saw a huge influx of breaches shaking consumer confidence and disrupting markets. For instance, the Capital One Financial Corporation breach exposed approximately data from 100 million individuals in the U.S. and 6 million in Canada. First American Financial Corporation, the largest American real estate title insurance company also exposed transaction records of 885 million individuals, including their social security numbers, mortgage, and tax documents. This same month, a breach of a smart home database belonging to Chinese firm Orvibo divulged 2 billion records as well, including account reset codes and user passwords.
Beyond the distressing personal implications such incidents invoke, businesses can also expect to receive devastating setbacks from breaches. Corporations not only stand to lose revenue from lost time and diminished productivity, they are on the hook for exorbitant security fixes. According to BigCommerce, “… The average cost of a data security breach for a major business would be over $150 million. This estimate is due to the higher level of digitalization and connectivity that the world has experienced over the last few years.” Meanwhile, IBM reports, “The average total cost per data breach worldwide in 2019 amounted to a total of $3.92 million [up from $3.5 million in 2014].” Worse, impacted businesses can expect to lose customer trust and public standing in the wake of such crises.
No End in Sight
When it comes to either risk — data privacy or breaches — the propensity for more harm shows no signs of stopping. Instead, the dangers will undoubtedly expand as more of our daily lives feature digital interactions. To this end, a study released by Capgemini and BNP Paribas, reported by CNBC, posits global digital payment volumes are on track to increase by an average 10.9 percent, reaching nearly 726 billion transactions this year. Meanwhile, sweeping technological advances promise to swell the number of connected devices and collected data. Or as Juniper Research reports, “The number of IoT (Internet of Things) connected devices will number 38.5 billion in 2020, up from 13.4 billion in 2015: a rise of over 285%.”
In spite of such forecasts and the associated risks, it would be foolish to think we can put the genie in bottle and return to a simpler, safer time. The novelist, William Gibson, famous for coining the phrase, “cyberspace”, once said, “The future has arrived — it’s just not evenly distributed yet.” Faster than we can scarcely imagine, our world is poised to be ever more connected — and ever more digital. However, rather than run from the threat this prediction entails, tomorrow’s forward-thinking businesses stand to gain from a world where 3.4 billion people use social media and annual e-commerce transactions average $4.5 trillion.
Light at the End of the Tunnel
So, how might innovative companies take advantage of these times? It all begins with technology. Instead of fearing innovations, like AI and quantum computing, for their capacity to accelerate more asymmetries of power, we would do well to view their potential for good. To see why, it is worth explaining current vulnerabilities to the encryption protocols protecting the world’s data, from power grids to nuclear codes. The cryptosystems used today began in the 1970s and largely rely on factorization, the time it takes a computer to back-calculate what A and B would be if you only knew C. “Modern encryption methods are specifically designed so that decoding them would take so long they are practically unbreakable, according to the MIT Technology Review. “But quantum computers change this thinking. These machines are far more powerful than classical computers and should be able to break these codes with ease.”
This MIT article was written in May 2019. Less than six months later, quantum computing transcended the hypothetical to the provable with the publishing of a paper in the science journal Nature. The New York Times explained the breakthrough this way: “Google said on Wednesday that it had achieved a long-sought breakthrough called ‘quantum supremacy,’ which could allow new kinds of computers to do calculations at speeds that are inconceivable with today’s technology.” In layman’s terms, what this means is quantum computing, assisted by developments in AI, could soon make it possible for a state, company, or rogue actor to break the encryption securing the world’s data.
And yet, I said this development heralds a positive news for data security. Let me explain. For years, experts have fretted over the vulnerabilities posed by existing encryption protocols. Now that technological achievements, like quantum computing, all but assure the veracity of these risks, the business community has every incentive to fix this problem. From my tenure serving at the helm of a security technology firm generating cryptography advances for consumer, enterprise, and government sectors — as well as authoring key patent applications on network/content security, identity verification, and network tracking/use verification — I have come to understand it’s not feasible, nor even desirable, for one company to shoulder matters of such strategic importance.
Rather, the problem requires a network of organizations working in concert to solve this outsized challenge. To encourage and facilitate such innovation, I am excited to announce the launch of the IPRESTIGE Emerge Fund designed to contribute to the advancement of emerging security and encryption technologies for significantly alleviating the exploitation of data privacy (including big data analytics) and data rights breaches. A conduit for next generation cryptographic approaches to protect vulnerable legacy network defenses, it serves as an IP incubator for three emerging areas: next generation encryption technologies, digital identity recognition technologies (inhuman authentication [AI]), and advanced data privacy/rights protection technologies. We significantly contribute to the design and implementation of AI-based digital identity authentication and cryptographic systems yielding ecosystem-positive behavioral benefits across the globe.
A Tech Ecosystem to Secure Our Data
This investment fund makes it possible for investors to obtain growth opportunities in emerging digital identity protection (authentication) and security/encryption markets. Our Merchant IP Funding Program is designed to acquire and/or license IP supporting the Fund’s technology ethos of digital identity protection with healthy machine learning mechanisms. Our Fund works in concert with Fallingst Technologies LLC, an advisory/valuation firm, and the management services provider of the IPRESTIGE Fund with the mission to vet, acquire, and/or license intellectual property. Together we work with a seasoned team of experts, including industry insiders, and technologists in the fields of IP legal, AI/authentication, security/encryption, blockchain, data rights/data privacy. We provide knowledgeable assistance from start to finish in the vetting, acquisition, and/or licensing of intellectual property assets. Committed to establishing a sustainable path for interested parties seeking to build a pipeline of IP funding capital to support their innovation and business endeavors, we offer an acquisition/licensing program for both creators/innovators and investors equally committed to a vision of a better, safer, and more productive digital tomorrow.
Ultimately, the internet’s ability to transform every sector of life may be attributed to the network effect. For the first time in history, we have developed what theoretical physicist Michio Kaku, calls a Type 1 Technology capable of connecting the entire planet. For better or worse, our collective futures as a species will rise and fall based on how well we can collaborate. For this reason, especially, the IPRESTIGE Emerge Fund sees tremendous opportunity in developing a first-of-its-kind info security ecosystem for innovation and funding for protecting our most precious asset.
If you are interested in learning more about this exciting opportunity, I encourage you to visit www.iprestigefund.com or contact me directly at joseph.hopkins@iprestigefund.com.
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