Cryptocurrency is no longer new. To be honest it wasn’t new even a few years ago before cryptomania launched Bitcoin into the stratosphere.

Consequently, you might have thought that most of the cryptocurrency myths, misinformation, and flat-out wrong ideas that have orbited around crypto would have evaporated by now.

But no. Many still persist.

Perhaps this blog post will help to lay some of these myths to rest.

Myth 1: Crypto is not secure.

Blockchain technology has its tenth birthday this year in October if you measure its birth from the publication of Satoshi Nakamoto’s original paper. If you measure it from the release of the software, it occurs in January next year. Either way, the technology is nearly ten years old, is considered unbreakable (at least until quantum computers grow tall), and has never been successfully hacked.

The crypto-is-insecure lie is fake news formed from a chain of successful crypto-heists. Here are the most notable:

1. Mt. Gox Version 1.0: In 2011, a hacker using an unidentifiable user account made off with 25,000 Bitcoin, worth half a million in those days, and much more now. (Wallet security is much improved since those days.)
2. Silk Road, The Sequel: The feds closed the Silk Road in October 2013, and a doppelganger site appeared as if from nowhere. Sadly the security was not as good as the original. A hacker blew through it and cleaned it out to the tune of $2.7 million.
3. The Sheep Marketplace: The Sheep Marketplace opened at the same time as Silk-Road-the-Sequel, surviving a little longer before a marauding hacker got his hands on some ill-gotten gains. This was an epic heist, 96,000 Bitcoins worth about $56.4 million and the hacker had the cheek to manipulate user account balances so that it looked like nothing had happened.
4. Mt. Gox Version 2.0: After February 2014 when Mt. Gox finally shut its doors, 744,408 Bitcoin, worth $436 million) were missing. This hack had the added impact of crashing the price of Bitcoin.
5. The Pony Botnet: A botnet using trojan malware called Pony stole vast numbers of login credentials from 700,000 accounts, 85 of which had Bitcoin wallets. The hacker emptied them to the tune of $220,000.
6. The Demise of the DAO: The first smart contract on Ethereum was not so smart. It served the DAO (a Decentralized Autonomous Organization) and had a bug, The hacker who hacked it spirited away about $55 million. As a side effect, the Ether community forked the blockchain, but the crypto stayed stolen.

In every case, the crypto stayed stolen, but none of this can be blamed on a blockchain technology problem.

Myth 2. Cryptos are a scam, a shakedown — a Ponzi scheme, no less.

Ok, there have been many crypto-based fraudulent schemes. The most frequent and successful scam is the “Exit Scam”. It works like this:

1. Dream up a crypto idea that sounds feasible and claim it will print mountains of money for investors.
2. Create a website, complete with cool artwork, a well-written white paper, impressive-sounding advisers, and a product roadmap.
3. Launch ICO.
4. When ICO completes, take the money and run.

Here are some examples:

1. Pincoin Token: A team of 7 Vietnamese entrepreneurs promised constant returns to investors. They launched an ICO and reaped $660 million from about 32,000 suckers. They even paid out a little to the investors before they did a moonlight flit. They have not been heard of since.
2. Benebit: What do you think of this idea: let’s unify all customer loyalty programs? Brilliant, eh? Sorry, but it’s too late to invest. The ICO is over, and the company behind it has evaporated, along with an estimated $4 million — demonstrating a distinct lack of customer loyalty.
3. PonziCoin: This earns itself a mention; barefaced branding at its best. It billed itself as “the world’s first legitimate Ponzi scheme”. It was a prank website. It even included a public admission that it was a scam. Amazingly this didn’t stop morons from pouring money into it. It raised over $250,000. What was the founder supposed to do? Naturally, cash in hand, he made a sharp exit.

A March 2018 study by the Satis Group, estimated that of all the large recent ICOs, a solid 81% were “frauds”, 6% failed, 5% are clinically dead, and only 8% made it to market.

Wait a minute. If that’s the case, how is this a Myth?

Terminological inexactitude, dear reader. It should have read: ICOs are frequently a scam, a shakedown — a Ponzi scheme, no less.

That’s why the SEC has pretty much called a halt to US ICOs. The point is that ICOs, not fully functional cryptocurrencies, are dangerous investment vehicles.

Myth 3. Cryptos have no real value.

“Give me a break, Krugman,” he said, (imagining he was berating NYT columnist Paul Krugman) “dollars, euros, and quetzals have as little real value as Bitcoin or Ether. Their value is linked to diddly-squat.”

In contrast, there are more than a few cryptos that link to genuine gold. Here is a list of those currently being traded: AurumCoin, DigixGlobal, GoldMint, HelloGold, KaratBank, PureGold, Xaurum, AurusGold, and OneGram Coin.

There are also ten not-yet-fully-ICOed gold-based cryptos: GoldCrypto, Golden Currency, XGold Coin, GoldMineCoin, BaselBit, AgAu, Darico, Gold Bits Coin, Flashmoni, and Sudan Gold Coin.

The real difference between fiat currency and crypto is that the crypto supply is governed by contract, whereas the fiat supply is in the corruptible hands of human beings.

And, if you want gold-backed money, where else are you going to get it?

Myth 4. Cryptos are for criminals and denizens of the dark web.

There are some advantages to using cryptocurrency for some criminal activities. It’s normal for hackers that spread ransomware to demand payment in Bitcoin. The now-defunct Silk Road did business in Bitcoin, selling drugs, medical supplies, and contraband. It meant that the money didn’t have to travel through a bank account — and for the bad guys that’s the most useful feature of Bitcoin.

In truth, Bitcoin is dominated by legitimate use. It is held as a pure investment, and as a safe store of money. Decentralization and “pseudo-anonymity” are features criminals like, but so do people living in economically unstable environments. If you cannot trust local banks because of corruption, or if the country you live in is unstable (think Venezuela) it’s a good place to store your stash of cash.

In the US, if you put your money in the bank and it fails, then you are insured (by FDIC) only up to a loss of $250,000. If you want to hold a larger amount then Bitcoin works fine. Bitcoin also sees heavy use on crypto exchanges as a unit of value to measure other crypto.

There is far more criminal use of the dollar: for money laundering, for drug trafficking, for bank robbery, and so on, than occurs with Bitcoin or any other cryptocurrency.

Myth 5. The use of crypto is anonymous.

Not so much. A computer security professional I know recently told me that the NSA had copied and analyzed the Bitcoin blockchain and was able to tie back almost all the Bitcoin wallets that exist to their owners. I have no idea whether this is true, but it would not surprise me — because it’s possible.

The point is that Bitcoin is an open ledger so you can tie the wallet addresses to amounts of Bitcoin. If you can tie the wallet address to an individual, you’ve got full knowledge of their holding, and their trades. And most ways to get Bitcoin, through an exchange of any kind, involves you providing identifying details.

You can get into bitcoin in anonymous ways, by buying it on the street through Local Bitcoin traders. There are also three coins; Dash, Monero, and Zcash that allow anonymous trading, so you could achieve anonymity through them. But they are the exception. The majority of crypto transactions are on the record.

Contrast this with paper money, such as dollar notes. These are truly untraceable, and hence they are far better than crypto for bad guys with money to hide.

Myth 6: The government is coming for your crypto.

Excuse me please, but no government has the power to shut down a cryptocurrency; blockchains are international and decentralized. Add in the fact that wealthy investors (the good, the bad, and the ugly) use store some of there stash in Bitcoin or Ether — and such people have political influence — and it’s game over, almost.

A government can make crypto illegal. And that’s what some economically-unsophisticated countries have done. When they do, it drives the currency underground and shops are not able to accept it.

Here’s a list of the economically-unsophisticated: Algeria, Bolivia, Ecuador, Bangladesh, Macedonia, Nepal. That’s just 6 out of 195, which is not bad for crypto. (Perhaps I should include Vietnam and Indonesia; both allow crypto speculation, but banned payments using crypto.)

Banning crypto will backfire spectacularly, stifling a whole sunrise industry until the sorry government finally realizes you can’t stop a technology tide.

As for the US, America is not going to ban crypto. No chance. Wall St is deeply in love again. And it’s the first time since it flashed its eyes at derivatives.

Myth 7: With crypto, you will pay no taxes.

Not exactly. Of course, politicians fantasize about banning crypto, even though they realize it’s a numbskull scheme. They fear crypto will deliver a simple means of skipping all taxes and the public purse will suddenly be empty. (Who then would pay their wages?)

The good news is that their fears may be well-founded. Crypto will probably provide ways to anonymize your money. The bad news is that our beloved politicians will quickly shift the burden of taxation to things that can be taxed, like everything you buy and stuff you cannot hide (land, property, yacht, etc.).

This tax switch will be disruptive, but it is inevitable whether you approve or not.

At the moment, the tax situation surrounding crypto varies. In most countries (including the US) crypto is treated as a commodity on which you pay capital gains tax if you speculate successfully. Blockchains are a public record, so where there’s a record of you putting money in, there is a record of your ownership. The taxman can know, and you risk his wrath if you try to hide your profits.

Myth 8: Can’t buy me much, yeah, everybody tells me so.

Some crypto-skeptics still believe crypto will never amount to much, although there are fewer than there were — culled perhaps, by the astronomic rise in crypto last year and Wall St obvious passion for its new financial mistress. Ripple in particular silenced many crypto-atheists when it announced that upwards of a hundred banks were using the Ripple network.

The crypto-skepticism transferred itself to the tokens that are not in the payments business. There are hundreds if not thousands of these. Some focus on computer infrastructure (the crypto cloud), some on the ad market, some on gaming, some on gambling, some on retail, some on the supply chain, and many on the health sector. Btw, my health sector favorite is Dentacoin. It makes me laugh just thinking about this crypto tooth-fairy.

I’ve always hated dentists, why would I ever buy their crypto?

The reason none of this seething mass of crypto tokens has made the news yet is that it’s too early. It will happen. Give it a year or two, and there will be dozens, or hundreds — maybe even bajillions.

Myth 9: Cryptos are a fad that will fade.

This myth is exploded by what’s written above and already lies in pieces. However, let me amplify it a little. I work for a crypto company (Algebraix). We began writing code in July 2017. We now have an application in Beta, and the Permission token (ticker: ASK) will be operational when the beta test is complete. The marketing campaign to recruit users will probably begin about a year after we started coding. The current roadmap runs for several years from then.

Now take a look at the history of, say, Facebook. In the first year after the software launched (2004), it acquired 1 million users. In the second year 5.5 million. It was not until the end of 2008 that it had 100 million and pretty much everyone knew its name. And Facebook is an example of very rapid growth.

The day has only just dawned. The flowers have yet to open.

Myth 10: Crypto is bad for the environment.

There is nothing worse in the eyes of a millennial than being utterly ungreen. Climate skeptics they are not, especially those who consult the evidence.

Thus a tremor ran through the crypto community when the news broke that Bitcoin mining squanders the electricity of 90 million refrigerators every day, or about as much as Ireland. It is excessive, even if you note that Bitcoin has a market cap of $160 bn — because that’s only half the GNP of Ireland and significantly less than Ireland’s money supply ($257 bn).

So shame on you Bitcoin.

We could protest: “Not so fast, Buster. If Bitcoin mining didn’t make a profit, no-one would do it.”

And that is also true. However, it doesn’t alter the fact that Bitcoin mining chews up huge amounts of electricity — necessitating the burning of vast amounts of fossil fuel — pushing unconscionable tons of carbon dioxide into the atmosphere — needlessly heating up the planet — melting the ice on Greenland and Antarctica, and raising the sea level to the point where Venice is unsavable. And I quite like Venice.

The truth is that the energy consumption of fiat currency is just as egregious and that the energy consumption of gold mining is more than twice as much and don’t talk to me about the cost of all those cloud data centers.

But that’s not the whole story. The whole crypto world knows that Bitcoin mining is expensive. So many other coins have found cheaper ways to organize their blockchains — ways that are hundreds of times cheaper than Bitcoin mining. (I’ll write an article on this one day soon).

Ultimately, either those other cryptos will dominate, or Bitcoin will become less of an electricity glutton.

The Net Net

You can think of this as a living blog post if you like. If you encounter any cryptocurrency myths which we do not mention above and which we have not yet slain, why not contact us and let us know.

If you do we will dispatch one of our mythbusters to hunt it down and dispatch it.

People need to learn to take ownership of their data. Personal data is valuable. No one disputes that nowadays, although maybe many people do not really know what that means.

Ultimately it means that you will get paid for the use of your data. Here are a set of questions and answers which you can think of as a “get paid for your data” FAQ.

Get Paid for Your Data FAQ

I keep reading blog posts that say I own my data. Well, maybe I do, but what does that actually mean?

It means that, if you want, you can reclaim your personal data from all the businesses that have some of it, like credit scoring companies such as Equifax or social networks like LinkedIn. The Europeans just brought in legislation (called GDPR) that forces companies to enable you to physically take your data back, if you want. So now, you can take ownership of your data.

Why would I want to do that? Maybe I’m happy as things are.

Think of it like this: you made some kind of deal with every one of those companies that hold your data which allowed them to use your data in exchange for some kind of service. So the question is: do you still think it’s a good deal?

Do you know of any better deals?

It’s probably better to think in terms of different deals. So, for example, Datawallet provides you with a different deal. BAT provides you with a different deal. Permission provides you with a different deal. The birth of new businesses that have a different attitude to personal data is encouraging; they are the conduits of a revolution. But they are not the revolution itself.

So what are these companies doing with personal data?

Datawallet allows you to pool your personal data with that of others and have companies pay to analyze it. BAT has an entirely different approach to the ad market. With its own browser, it organizes publishers, advertisers, and users to eliminate ad-brokers and share the ad revenues between publishers and users.

Permission is also in the ad-market and the media market, directly linking users to advertisers.

Permission members can share their data anonymously with companies that they are interested in, and get paid directly for interacting with those companies’ ads.

You talked about a revolution earlier. What do you mean?

Revolutions occur when people change their attitudes. The American Revolution occurred because the colonists thought being ruled by a king on a different continent didn’t make sense. The French Revolution occurred because the French no longer accepted the idea of being ruled by a monarchy. They changed their attitude.

It’s the same with data ownership. People no longer accept that today’s tech monoliths should assume all power over their personal data. Change becomes inevitable as soon as most people decide that they own their own data.

And when they do, what happens then?

Then businesses like Permission and the others we mentioned emerge and enable people to profit from the ownership of their data.

So, how does Permission.io work?

It’s a market that has on one side people who are willing to share their profile data for targeting purposes with advertisers who want people to watch their content. What makes it completely different is that the advertisers pay the consumer for watching the ads rather than paying Google or Facebook for pushing the ads in front of your face.

So it stores my data. How do I know that Permission.io is not sharing my data with other businesses?

Because you store your data under your own private key and give permission to advertisers to “rent it”. All data is anonymous.

What do I have to do to get paid for my data with Permission.io?

The easiest way is to install the Permission Browser Extension. Then continue to browse the internet as you normally would. When there’s an ad relevant to your online activity, you’ll be asked if you want to watch it in return for payment.

OK. So I get paid to watch ads. But I hate most ads, I avoid them like the plague.

And you would avoid ads you don’t like on our platform, too. But if you think about it, there are ads you do like. Think about the Super Bowl ads. Think about movie trailers and TV trailers, and music promotions. Maybe you like games. Maybe you like certain kinds of cars.

All advertisers post their ads to YouTube — of course, they do. Some of them get millions of views. In 2017 a Samsung India Service SVC ad got more than 150 million views. It was the most-watched video of 2017.

So why wouldn’t I just watch ads on YouTube?

Because YouTube won’t pay you. Permission will. It pays you in the Permission Coin (ticker: ASK).

I’d prefer to be paid in dollars.

Perhaps, but it’s not so different. The platform gives you a crypto wallet. You can transfer the ASK in your wallet to dollars or other currencies. But it’s a media platform too. You can pay in ASK to watch movies or listen to music as well. It’s not just ads.

What’s to stop me just sitting there all day watching ads and making a living from it?

You only get presented the ads from the advertisers that target you. Advertisers will probably avoid targeting people who watch every ad. So you would not get enough ads for you to earn a living in that way.

So is it more like a pocket money thing?

Well right now, yes. But later the company plans to reward referrers and recommenders. And independent content providers will also be encouraged to market their content on the platform. So it may prove possible to earn a living from it if you’re the right kind of person. Think of Permission as a media ecosystem.

What will happen to Facebook and other ad platforms if companies like Permission.io succeed?

We expect they will continue pretty much as they are for quite a while, but gradually they will find themselves in direct competition with blockchain-based businesses. And if they don’t stop exploiting people’s data, their business revenues will begin to vanish as more and more people adopt alternatives.

The Net Net

We hope you enjoyed this informal FAQ. Think of it as a living blog post. If you have any other questions about how to get paid for your data, write to us and we’ll add your question in here.

Personal data has value. Facebook and Google harvest billions from it through advertising. Talented hackers make a handsome living from stealing and selling it. The profits of credit score companies ride on the back of it.

And, unless you are very young or very unusual, you have terabytes of it on your devices or floating around in the cloud.

But how much your data actually worth? To get some idea, let’s examine the value of some of the personal data for the average US Joe or Jane.

Your Data Value as an Advertising Target

Consider the price advertisers pay to try to catch your eye. Facebook, Google, and other digital ad brokers use your data for targeting. They capture your behavior and your consumer profile (your preferences, lifestyle, stage of life, and various other attributes).

Facebook prospers from the fact that it knows a great deal about its users — its average US user spends about 40 minutes a day on the site, enhancing that knowledge. Facebook regularly runs batteries of statistical algorithms to match users with the products advertisers wish to promote.

In 2017, the average cost per click for an online Facebook ad was $1.72 — a premium price that stems from the mountainous variety of data it can dissect and evaluate.

Google, the other giant of the digital domain, cannot match Facebook in this area, but more than compensates for it with Google Adwords, which, with an 80% share of the US market, dominates search advertising.

According to Wordstream, in 2017, the average cost per Google AdWords click was $2.32. Naturally, some clicks cost much more than that. The price is fixed by auction, so it varies with demand. The price for adwords for legal services, for example, can rise above $50 per click. Nice work if you can get it.

If we take the total US revenues from digital advertising in 2017, about $83 billion, and divide it by the population of US Internet users (roughly 287 million) you get the digital ad revenue per average Joe or Jane.

It works out to be $289.19 per annum.

This is an average, so if you do many product searches or frequently click on website ads, your total will be higher — especially if you often seek legal services.

Your Data Value to Hackers

Another way to look at the value of personal data is from the thief’s perspective. Data thieves usually steal personal data so they can sell it on the Dark Web to other thieves. If it wasn’t worth much they wouldn’t bother.

The bare details of a credit card (name, card number, expiry date) are not worth much. But if you add in the owner’s address and email, then it’s worth somewhere between $20-$25.

That has a similar market value to a driver’s license. So one debit card, two credit cards, and a driver’s license, plus your email and physical address command a price of $100 (more details here).

Passwords can be valuable. Your Netflix password (if you have one) is worth about $3.00. Your Spotify password comes in at about $2.80. A password that walks you into a bank account with a balance in the region of $2,000 commands a price of $100. For a balance of $15,000 or more, think in terms of $1,000.

A complete medical record can fetch the same $1,000 price, although, like the bank account, the value depends on what it contains. Such details can be sold to insurance companies or even used for blackmail, but the less it contains, the less value it will command.

It’s difficult to estimate an average value for passwords and personal credentials. But if you include a collection of passwords for a bank account, a savings account, add in a few credit or debit cards, a driving license, and a passport and assume just an average medical record, we are probably looking at $300, minimum.

Your Data Value as a Credit Score

In 2016, Equifax made a healthy gross profit on revenues of just over $3.1 billion — the year before it managed to compromise the personal financial data of 147 million Americans.

Credit scoring is a profitable business, as both Experian (annual revenues of $4.55 bn) and TransUnion (annual revenues of $1.7 bn) can attest.

Roughly a quarter of those global revenues flow from the tens of thousands of companies that are interested in the creditworthiness of about 235 million Americans. The data that Equifax, Experian and TransUnion present to those companies is your personal financial data, gathered, aggregated, and analyzed without so much as a “by you leave”.

Do the math and you’ll discover that they make about $10 per annum from the average Joe or Jane.

Let’s Examine the Personal Data Inventory

What is the inventory of your personal data?

It is probably more extensive than you think. It consists of basic contact details (name, address, telephone, email) and official credentials that prove who you are, such as a birth certificate, driver’s license, passport, social security number, and so on.

To this, we can add personal interests, hobbies, and preferences; data that will interest advertisers and retailers. There’s financial information; bank accounts, debit and credit cards, investments and insurances, and nowadays, crypto wallets.

There is also personal history, such as previous addresses, phone numbers, educational records, transcripts, employment records, certifications, and criminal records.

And let’s not forget your personal history of buying and selling things.

There is your health data: current records, medical events, doctors’ reports, lab results, current pharmaceuticals taken (if any).

We can also include any memberships of associations or groups of any kind, such as sports clubs, retail warehouses, air miles programs, political affiliations, and so on.

We also need to include all the digital permissions you manage: login details that provide access to websites, software applications, or digital services such as Netflix, Amazon Prime, and so on.

To this, we can add ownership data, deeds, titles, provenance, appraisals, and other documents that relate to physical possessions such as a house, car, antiques, etc.

Then there are your actual digital possessions: emails sent and received, text files, videos, music, sound recordings, and any other data files.

Last, but by no means least, are your personal digital tracks — the full history of your digital activities.

Federico Zannier’s Experiment

To get a handle on the value of your digital tracks, consider an interesting experiment conducted by Federico Zannier, an alumnus of New York University and an experienced IT consultant.

Zannier decided to sell his personal digital tracks for $2 per day over one month using Kickstarter.

The data included was: the text of every web page he visited, regular screenshots of his PC activity with timestamps, a folder of webcam photos taken every 30 seconds, a log of all PC application activity (open and close times), browser activity including searches, personal geolocation, and PC mouse movements.

Federico guessed he’d earn about $500 from his one-month data sale, but exceeded that target more than fivefold. He raked in $2,733!

As with all other categories of data we have already discussed, different people would definitely command different prices for their digital tracks. The digital tracks of an A list celebrity would surely command a higher price than Federico’s and those of the average Joe or Jane, far less.

Nevertheless, they are probably worth about $1,000, per annum.

In Summary

To determine an accurate average value for US personal data would demand much more research than we have done here.

Nevertheless, given the data we have discussed and the extensive nature of an individual’s data resource, it is likely that, on average, the personal data of a US resident is worth somewhere in the region of $2,000 — $3,000 per year.

The question is: How to monetize it?

Hint: You might like to volunteer to sign up at Permission.io, create an account, install the Permission Browser Extension, and earn from your data that way.