Over 4 billion users use the internet, which includes mobile internet. Hackers and criminal enterprises are engaging in fraudulent activities online, which include fake information and infringement of privacy and data security of internet users. The distributed database and immutability characteristics of blockchain technology can help deal with these risks and threats in next-gen internet applications. Evidence from early-gen applications shows the tamper-proof capabilities of records, as well as the security features of applications.
This presentation has a critical review of the features of blockchain technology for developing applications with data privacy and security features, which are in very high demand for dealing with the privacy and security risks of the digital world. The analysis shows how the distributed database feature along with the immutability characteristic of blockchain technology contributes to privacy and security solution.
Evolution of the Digital World
The digital ecosystem is attracting stakeholders from all sections of society. E-commerce, entertainment, and learning are the most popular applications on the internet. Categories of internet users include the internet as well as mobile internet, which is growing at an extraordinary pace with 4 billion users.
Growth of Fraud
While this development is good news for platforms like Alphabet and Facebook, some downsides continue to grow. The main challenges are fake traffic and other forms of fraud. Fraud costs the stakeholders billions. In 2018, Kshetri and Voas (2019) explain fraud cost advertisers $19 billion, and this is mainly the result of fake traffic and ad fraud. The problem is likely to grow as cybercriminals have access to the same technologies the developers have access to, and it is easy to target the vulnerabilities to exploit the opportunities for making money.
One of the most common schemes employed by fraudsters is to create sites and attract fake audiences. This allows them to charge ad publishers for the fake traffic on the sites. Technologies are contributing to automation capabilities, which could be used to create massive surges in traffic for displaying ads. There are variations of the technique and manual techniques could be employed as well, where the audience belongs to a community and they collaborate as part of the grand fraudulent scheme. Other challenges for ad publishers include ad blockers and other technologies that do not allow them to reach the target audiences effectively.
Most of the fraud is caused by fake traffic. This includes invalid, non-human, traffic. Besides the loss of trust, this phenomenon also undermines the metrics. There are several types of invalid traffic, which are:
- Browser hijacks
- Ad injectors
- Domain laundering
- Data-center traffic
Bots are systems that can mimic human users, and more activity can give the impression of human users, thereby driving up ad impressions. Malware could be deployed on user systems, which can be programmed to accomplish a variety of activities such as making HTML or ad calls without the user being able to detect anything. Thus, the cybercriminal makes money from fake traffic. Ad injectors are technology-enabled malware. These are programs, which insert ads on websites they are not supposed to display on. Domain laundering is a process, where a low-quality website mimics a high-quality publisher and steal ads. This is done by stealing content or placing content for similar keywords and placing them on the fake site, which could receive a portion of the traffic. The traffic allows the site to receive ads on the site, which is not meant for them. Data-center traffic is one of the emerging techniques for fraudulent activity. This technique does not involve human users.
Challenges & Customer Expectations
Increasingly, developers are creating solutions for dealing with the techniques cybercriminals use to engage in fraud. However, bots are capable of deceiving many of these technologies. All stakeholders suffer from fraud in the digital media space. To deal with these challenges, digital stakeholders need solutions for responding to creatively and cost-effectively. Fraudulent activity causes significant challenges for content publishers. The main drawbacks are lost money and lower returns on spending. The metrics lose relevance, and performance analytics become unreliable. Most contents are highly creative endeavors of talented professionals, and this is a missed opportunity to engage the audience with the communication. For sellers, this is a serious loss of trust, especially for the value of the inventory. This also results in a damaged relationship between the buyer and seller. For the enablers of the platform, this means loss of trust.
One of the most significant developments in the world of technology is blockchain. Considered as the fifth disruptive technology, blockchain technology has several features that contribute to novel ways for stakeholders to engage on the internet. One of the main benefits of blockchain is the ability to facilitate transactions between nodes on peer-to-peer networks. On blockchain networks, a variety of transactions could be accomplished, which ranges from currency to computing power, and more as explained by Halpin and Piekarska (2017). Bitcoin is the first cryptocurrency application, and many new applications are emerging every week. For the ads industry, blockchain offers the potential to reduce fraud. The following features of blockchain make it relevant for the application.
The decentralized applications (DAPPs) worldview makes use of the network in a distributed fashion. The information of members is secure. The execution of operations is decentralized. In a blockchain DAPP, the application should be capable of operating autonomously, and no single stakeholder should be able to control most of the tokens. Since autonomous agents will be performing tasks, a set of rules is responsible for performing as decentralized autonomous organizations (DAOs). In blockchains, it is typical to have smart contracts, which execute a range of tasks. Smart contracts, DAPPs, and DAOs can operate together as decentralized autonomous societies (DASs). In this case, an ad exchange could be a DAS, for instance.
Lee (2015) explains blockchain technology is characterized by three components, which are:
- Cryptographic Solution
Blocks, hashes, and hash functions make up a blockchain. The operations of blockchain technology are useful for cryptography solutions. In a block, the block in the middle (n-1) records its hash on the block. The hash of n-2 is also recorded on the block. This allows for the formation of the chain. The hash is a mathematical algorithm, which transforms the input into an output. Every block has a timestamp and information regarding the configuration of the blockchain. Each block has a payload and the payload of the previous block.
The node sending new data records in a block and sends a broadcast regarding the newly available block to the network. The nodes receiving the block verify it from the hash, and if the payload is correct, it is added to the block. The member nodes execute PoS or PoW algorithms. Once a consensus is reached, and all the nodes verify the block, the new block is added to the blockchain. Blockchain technology could be one of the following three types, which are:
The main difference between the three is the level of decentralization, and how they contribute to anonymity.
Proof & Consensus
In a blockchain, Tarzey (2019) explains how authority and consensus are achieved by the different implementation of protocols, which use different types of proofs. Proof of Work and Proof of Stake are two popular techniques with advantages and disadvantages. PoW is slow, and PoS is better in terms of performance. Several consensus mechanisms are evolving in response to the need for more solutions.
On-Chain, Off-Chain, Side Chain Technologies
While designing a blockchain solution, one of the three popular architectures, on-chain, off-chain, and sidechain, could be used. The choice depends on the requirements of the application and incorporating features that could provide the technology with a high degree of reliability and effectiveness. For the ad network solution, off-chain architecture could provide a useful solution.
Energy Efficiency & Blockchain
One of the drawbacks of technology is power consumption. Bitcoin mining consumes million in energy costs. There are other applications with better energy performance, but this gives an idea of the nature of the costs involved. Thus, developing a useful technology for the ad industry should incorporate considerations for energy performance as well.
Blockchain Technology for Data Security & Privacy
Blockchain technology could be effectively applied to the digital world. Halpin and Piekarska (2017) explain how data privacy and security could be achieved with blockchain technology. There are four approaches by which data security and privacy could be achieved by blockchain technology.
One of the unique characteristics of blockchain technology is a distributed database. For transactions, blockchain is a public ledger for the transactions. This is an effective approach for dealing with hacker activity during transactions. Waldo (2019) explains the technology as a distributed database as well as a data list, but it prevents tampering by the operator of distributed peers. The transaction records are encrypted. This capability to distribute data securely has made blockchain the foundation of next-gen financial technology. Since financial transactions are critical for the digital ecosystem, the following features of blockchain technology provide security:
- Authentication of peers
- Generation of the hash value
Securing Distributed Networks
Blockchain technology could also be deployed to secure distributed networks. In the current-gen technology, anti-malware filters are used for the detection of files using pattern-matching schemes. This technique is vulnerable to malicious activity. A new anti-malware environment could be developed by blockchain technology, where users could contribute virus patterns, thereby contributing to higher fault tolerance as explained by Tawadros (2019). Several other features could be employed such as higher scanning speeds, fault reliability, and privacy-aware public key infrastructures. The concept of applications is presented in the following sections.
Another feature of blockchain is architecture, which contributes to the preservation of data privacy. It is useful to note that a blockchain is made up of blocks, which has the list of transaction records. The block points to the previous block, with the help of a reference (hash), or the parent block. The first is the genesis and has no reference. The block has the header and block body. The header includes critical information regarding the block. This architecture contributes to characteristics or features that could help overcome security issues. These capabilities are contributing to the features that are useful for many applications on the cloud.
Data Security Applications
Fraudulent activity is at all-time highs, and it is relevant to consider the development of applications dedicated to data security. Some of the critical requirements of data security applications are data accountability, forensics, and privacy. Daneshgar, Sianaki, and Guruwacharya (2019) provide evidence from early-gen applications show some of the possibilities of blockchain applications:
- Tamper-proof records
- Data transparency and accountability
- Privacy and availability of provenance data
Developing an application with tamper-proof provenance is adequate evidence for the capabilities of security within blockchain applications.
Deployment & Implementation
Tokens and contracts are the most popular applications of the blockchain technology. For the firm, both tokens and contracts are relevant. In the near team, contracts are the most relevant form of blockchain technology for the activities of the firm. Using the Ethereum blockchain, contracts could be secured for the digital space, thereby mitigating the scope of fraudulent documentation. When the userbase or audience grows, the firm could consider building a unique token for the ecosystem.
Employee training is a critical component of the implementation plan. Every employee at the firm should not only be aware of blockchain technology, but also be able to help the organizational stakeholders and customers use blockchain technology for transactions. This could be accomplished by hands-on training workshops for all employees throughout the organization.
Applications could benefit from the immutable and distributed database characteristics of blockchain technology, which could be highly effective in dealing with fraudulent data and malicious activities online. Evidence from early-gen applications shows the properties of blockchain technology that contribute to the privacy and security of data and networks.