The frequency of data breaches has been increasing at an alarming rate, impacting a vast cross-section of users. From individuals to small, medium, and large companies and even government agencies - data breaches affect everyone.

In this article, we’ll be taking a look at some of the main motivations and reasons for data breaches and explore how SelfKey provides solutions to the problem.

Reports suggest that the volume of data breached across the world increased at an astounding rate of 141% in 2020, as compared to the previous year 2019.

Moreover, the latest reports for 2021 don't look good either. Even with fancy upgrades to security systems, the number of data breaches - and the amount of information that is compromised - continue to grow. 

Hence, the question still remains: how can you best protect yourself from a data breach?

In order to answer this question, we need to first understand what happens to data once it is stolen.

What Happens to Data after a Breach?

Understanding why hackers are after your data - and what happens to your data once it is accessed by them - is a critical part of becoming better protected against them.

Stolen data may or may not contain information that can be utilized to directly exploit you for financial gain.

Sensitive information such as credit card numbers, social security numbers, passwords, etc., can be directly used for financial gain by the hacker(s).

However, of late, data such as an individual’s name, DOB, phone numbers, or email addresses can also be exploited in different ways.

A hacker who is after your data is often looking for quick and immediate monetary gain. Hence, if the data obtained through the breach is not sufficient enough to exploit you directly, then the alternative might be to sell the data to others willing to pay for it.

People with criminal intent may purchase this data and can then use it to exploit you.

A recent report from the Financial Trade Commission (FTC) states that identity duplication for illegally gaining eligibility to different government schemes, systems, or relief programs has increased during the pandemic.

Given the fact that there have been a large number of relief programs announced and implemented around the world, these have offered opportunities for identity thieves to exploit innocent people who are often in need of financial support.

All of the above begs the question: even with state-of-the-art upgrades to security features, why does the number of people affected by data breaches continue to increase?

Number of Users Affected by Data Breaches is Constantly Rising

The primary reason for the alarming increase of data breaches is the centralized storage of users' personal data. The majority of the data around the world is stored in centralized servers. An attack by hackers on this centralized storage can often affect millions or even billions of users.

Secondly, over-sharing of users' personal data can also contribute to the extent of the data breach.

Centralized authorities, which use centralized storage like e-commerce websites, banks, etc., often collect user data that is not relevant to the service they offer.

This is similar to how a supermarket giant may collect your phone number before providing your bill, or a company requiring you to set up an account before you perform an online checkout The collected phone number or email is then often used for marketing or other purposes that users may not particularly want, or need.

However, phone numbers or emails collected in such ways are often stored in a centralized database. A hacker who successfully attacks the host server can then obtain all the data in one go.

Although most centralized servers are periodically upgraded with the latest security features, none of them can be 100% hacker-proof.

The landscape of the current digital era is constantly evolving. The same applies to hackers, who are also constantly devising new methods to counter security upgrades designed to thwart their access to centralized storage servers.

This brings us to the real question - is there a better way of preventing data breaches?

Regain Control Over Your Data

This article has already made it clear that the main sources of data breaches are the:

• Centralized storage of sensitive user data.
• Collection of sensitive user data that is often not relevant for the service offered to the user.

Both these reasons have a common end result - the user who should be the owner of the data ultimately loses control over their data.

Hence, the most critical step in safeguarding the personal data of users lies in giving the control of personal data back to its respective owner. This can also allow users to decide whether or not they want to share data that may be irrelevant for a service they are receiving and thus prevent over-sharing of data.

The SelfKey Wallet offers its users complete control over their personal data, as well as personal documents. The SelfKey Wallet never stores or retrieves your data onto a centralized database. Rather it is stored on your local system, controlled by you.

In this way, the data of SelfKey users is not accessible to a hacker through a single hack. Rather, hackers would have to repeat a hack on each user individually in order to acquire the same amount of data that could be found if it was stored in a centralized database - and that will probably not be financially viable for them.

Furthermore, through SelfKey Marketplaces, the SelfKey Wallet allows users to use their personal data or documents to access numerous financial or business services such as offshore banking, business incorporations, as well as the Loans Exchanges, Passports and Residence Marketplaces, without the risk of oversharing personal data.

Conclusion

Personal data breaches continue to pose a direct threat to individuals and are a direct violation of the privacy of users. 

The growth in hacks and data breaches also indicates that the outdated technologies of centralized storage are perhaps fundamentally incapable of ever fully protecting users from the constantly-evolving threat posed by hackers.

In this respect, it’s unsurprising that people all around the world are beginning to realize that security upgrades intended to make centralized storage “hacker-proof” are neither viable nor sustainable solutions.

 Giving control over personal data back to its owners and making each user responsible for how their individual data is shared is a way of reimagining the data security problem. Users gaining control over their personal data serves two purposes:

1. They can choose to only share the data that they wish to share and thus avoid oversharing.
2. Hackers may be discouraged from attempting to hack personal data storages, as the nature of decentralized storage does not provide access to the large pools of data that can make it worthwhile.

SelfKey Wallet offers users a way to avoid centralized storage and to gain control of their identity. Moreover, it also allows users to access and use different financial or business services through the SelfKey Marketplace.

With all this in mind, it’s not unreasonable to argue that the realization of individual privacy and self-sovereignty will only be possible through a decentralized identity ecosystem.

Moreover, SelfKey’s futuristic idea of verifiable credentials could greatly help minimize the data-oversharing issues as well. Once implemented, verifiable credentials in the SelfKey identity ecosystem will enable users to use their personal data or documents, a.k.a credentials, for any purposes that require these credentials, without sharing them with third parties.

During a time when the shift from centralization to decentralization is clearly gathering pace, SelfKey, with its vision towards verifiable credentials, will have a huge role to play in shaping the future of the decentralized identity industry.