and it is reliant on collecting and sharing a large amount of people's personal data. Therefore, today's privacy problem is even more apparent in the online advertisement space (Ad-Tech industry), where your personal data – along with the data of billions of other internet users – gets shared with and used by numerous companies (unknown to you) for their benefit.
Even though the different stakeholders in the AdTech industry are aware of this privacy abuse, they continue to use it for their benefit. There are several reasons that explain this behavior :
(a) It's a Billion dollar industry
Why would some brands and publishers sell and misuse your data? Online advertising is a lucrative business model, valued at USD 334 billion in 2019, USD 378 billion in 2020 and is expected to reach USD 982.82 billion by 2025. This model is entirely based on collecting personal data about you and increasing your screen-time. Every second and click (literally) counts.
(b) It allows for personalization (although not privacy compliant)
The online advertising ecosystem offers a clear advantage over traditional advertising channels like TV, press or radio stations: personalization. Your online activity can be tracked and afterwards processed to obtain a profile of you, which reveals your preferences and interests. Conceptually, this is a good idea, because knowing your interests allows platforms and brands to show you ads and content that interests you. However, the obsession for personalization has led to the development of a sophisticated tracking ecosystem mainly motivated by the advertising business. This ecosystem goes further than the online activity of people and with the proliferation of smartphones allows to also track the physical mobility and places visited by an individual.
Many e-commerce businesses use Online Advertising because they do not have any other option. Today if a brand wants to have an online presence, there is no other alternative than using the advertising services that Facebook, Instagram and Google provide, even though your brands is then participating to and even financing this large-scale personal data abuse.
(c) However, opposition is there and change is coming
Despite all the tracking, AdTech stakeholders still largely fail to show people ads of real interest. The result is that many people consider online ads annoying and useless, which along with the perception of privacy intrusion have led people to massively install ad blocker solutions. In addition, different scandals have motivated a reaction by people as well as public administrations.
2.3 Privacy laws around the world – a first step in the right direction
Rapid technological developments and globalization, in addition to numerous scandals related to privacy violations, has led some administrations to develop data protection legislations that consider illegal many of the practices conducted today. These privacy laws provide a significantly level of privacy guarantees to people, and obligations on brands that process people's personal data. Two important recurring principles and concepts we can find in most of these privacy laws – and which are relevant for our project as explained in this whitepaper – are the "transparency and information requirement" and "data subject rights".
(a) Transparancy and information requirements
The principle of transparency requires brands to provide clear, precise and easily accessible information to people about how their personal data will be used. This mean that information addressed to the public or to the data subject must be concise, easily accessible and easy to understand, in clear and plain language and, additionally, where appropriate, by using visualization .
In addition, brands have an information requirement when collecting personal data from a data subject [read: an individual]. Each brand needs to provide the data subject (you) it collects information from, with relevant information about a number of topics that helps you understand more about how your personal data is being used.
Although the principles are a welcome step into the right direction, the execution of it by brands today is lacking. Even if consumers (you) would understand the information that is send to them, there is not much room for a response or a dialogue. What if you do not agree with certain aspects in a privacy policy? What if you consider that a brand shouldn't know your home address when offering you (only) a digital service? Again, there are no tools available to level the playing field between brands and people.
(b) Data subject rights
People ("data subjects" (you) in the framework of privacy laws) have rights in relation to their personal data, called "data subject rights" (short DSRs). Under certain conditions, these rights can be enforced against brands that process personal data.
These rights may include e.g. (i) the right to information - the right to be informed about how a brand uses your personal data; (ii) the right to access – ask access to personal data that is being processed by a brand (e.g. when you want to know just how much data a company has about you); (iii) the right to be forgotten – ask a brand to delete your data (e.g. when you don't want to receive any products anymore); (iv) the right to object to direct marketing – ask a brand to stop sending you promotional or marketing messages (e.g. when you receive emails about products and services you do not want); and (v) the right to rectification – ask a brand to rectify personal information about you that is inaccurate or incomplete (e.g. they have your old address or there is a typo in your name);
These privacy laws (e.g., GDRP, CCPA; LGDP) include obligations for brands in relation to data subject rights, e.g. (i) inform consumers that these rights exist; (ii) help consumers exercise them; (iii) timely respond to a customer who exercises these rights, mostly within a period of 15 to 30 days; and (iv) do this all in a transparent way, and at no cost to the individual.
These principles aim to give individuals more autonomy over their personal data. However, people today are often not aware these rights exist. Even if they would, how do you exercise them? There is a lack of educational resources and necessary tools to effectively make use of these rights by people.
2.4 Consumers want control, but lack the knowledge and tools
Today, you have no control over the use of your personal data. Many people (probably many like you reading this paper) demand more control and are willing to take action to take back ownership of their digital lives. A recent consumer privacy survey conducted by Cisco interviewing 2,600 adult respondents in 12 of the world's largest economies (five in Europe, four in Asia Pacific, and three in the Americas) – shows that people increasingly care about their personal data and want to actively take action to protect it, but that they are lacking the knowledge and tools to do it.
That is where Profila steps in, by providing people with the tools to control their data.
2. Profila today - the existing consumer App – first step towards data control and compensation
3.1 The Profila App - control your data …
(a) … through privacy education and rights management
A first step to effective data control is knowing your (data subject) rights and taking action against those who misuse your personal data. In order to use these data subject rights to your advantage, you need to (1) understand the scope of these data subject rights (step 1 "education"), and (2) understand how to manage or exercise these rights (step 2 "management"). Today, there is no easily available tool that lets you learn about your rights and provide you with an easy way to exercise them.
Education. "What is personal data? How long can a brand store personal data? Can a brand sell personal data of its consumers to third parties, who then send messages to those individuals? What can I do about it?" The App has 9 education or awareness modules about privacy rights, explaining to you in understandable terms everything you need to know about privacy and your personal data in order to effectively control it.
Rights Management "Dear Brand X, I liked your shoes, but I do not appreciate the daily emails about other products. I therefore send you this "right to object to direct marketing" so I do not receive any more of such emails." The App allows you to manage or effectively exercise your rights. Profila reduced this difficult process to an easy 3-click step process, where you can (1) choose a company logo (recipient of a right request); (2) click on one of the 8 data subject rights , and (3) include an identifier (email; mobile number).
Profila's rights management functionality is already implemented on the Cardano blockchain as part of the Catalyst fund 5 "– called "control your data – privacy ledger.
More details about the funded project can be found via the URL , or in the roadmap description below (see section 4) or in our Medium article "Profila Receives Funding from the Cardano Community for Its Privacy Rights Project", https://medium.com/profila-com/tagged/project-catalyst.
(b) … through data subscriptions
"Dear brand Y, I will grant you access to my email and my clothing preferences, but only during the summer, because I only want to receive offers on swimwear, and only contact me via WhatsApp and Profila, because I probably wouldn't read it if you send it via email"
A second step to get data control, is keeping track of your personal data. Where does your personal data reside and who has access to it? This is taken care of by Profila's "data subscriptions", which allows you track all data you shared with brands, including information about what kind of data, the purpose and duration, and ultimately receive a compensation from brands that subscribe to your data (personal data is never sold).
People (you) are our partners, and your brands are our customers. Our revenue model is 50/50, meaning that every EUR/USD/CHF that a brand pays to access your personal data under a subscription, we share 50/50 with you. If you agree to these terms, you click "accept" and both parties conclude a data subscription contract. Payment is made by the brand at intervals throughout the contract terms (usually monthly), on the conditions that the consumers' personal data is kept up to date, and the brand can also access additional data about the consumer's preferences for certain products and services relevant for the brand.
E.g. Wholefoods pays Alice 12 USD/year (1 USD each month) to access her (i) personal data (email, phone) (ii) preferences about food (vegetarian, bio-products, lactose intolerant) and (iii) communication preferences (Alice would like to receive discounts/product info via WhatsApp and Profila). This helps Wholefoods to serve Alice better. If Wholefoods listens to Alice, she will be a happy customer. Alice gets the products she likes and service she requested and receives a compensation for the use of her personal data by Wholefoods. For each Advert she watches, Alice gets paid. If Alice wants to know in the future what she agreed to, she can easily verify the terms of her relationship with Wholefoods in her Profila App (under the Wholefoods data subscription).If Alice wants the relationship to stop, she can end the contract and exercise her "right to be forgotten", so that Wholefoods is legally required to delete her personal data.
Profila's data subscription functionality is already being implemented on the Cardano blockchain as part of the Catalyst fund 6 called "dapp to control/monetize your data". More details about the funded project can be found via the URL , or in the roadmap description below (see section 4) or in our Medium article "Profila Receives Additional Funding From The Cardano Community", see https://medium.com/profila-com/tagged/project-catalyst.
3. Profila tomorrow – the Catalyst project - implementing our zero knowledge token in our App, and linking it to our Cardano/Catalyst funded projects
The token is called the "Zero Knowledge Token", short "ZKT", or nicknamed "Zeke" token.
The name "Zero Knowledge" is today commonly used in reference to zero-knowledge proofs, a digital protocol that allows data to be shared between parties without having to reveal the content of their interactions with any third party.
As further explained in our research paper (technical whitepaper) named "Zero Knowledge Advertising: a new era of privacy-preserving AdTech solutions" that Profila co-authored with the University of Madrid III, Big Data Science Institute – Santander (hereinafter the "ZKA Research Paper", read the full version on our website here), Zero Knowledge Advertising allows people to remain anonymous while viewing personalized content from brands. Personalized ads are delivered to users without sharing any users' data with third parties.
As part of its ZKA strategy, Profila has created a blockchain based token with ZKT, which will incentivize people to control (who has access to) their personal data via the Profila platform, will compensate internet users for participating in the ZKA ecosystem and help keep each other's identities (IP addresses) anonymous (through peer-to-peer technologies). Ultimately, ZKA will help to identify and reduce Ad fraud (through audit trails) and the misuse of personal data online by businesses through the current real-time bidding Ad model.
Project Plan. We are creating a cardano-native token that helps to succeed our goal. Our token will incentivize people to learn about privacy in the Profila App, help them ethically exercise their rights and share better data, all under their own control, and facilitate the access to a variety of digital privacy-related products. The ZKA token will reward good behavior, help avoid any abuse of the platform and tools we make available and will compensate people for taking part in this movement. The many functionalities of the Zero Knowledge Token are described below and set out in detail in section 4 of the Whitepaper. ZKT already has several functionalities before its public sale. After the ZKT Token Sale, we will (i) improve the existing functionalities of ZKT (see "existing functionalities 1 – 3 below); and (ii) further develop the functionalities of ZKT (see "functionality 4-5").
(i) Existing use case 1 – privacy education and awareness
We consider privacy awareness a first crucial step in helping people gain control over their data. People who learn their privacy rights by reading the education modules and passing the education, receive an amount of ZKT as a reward that can be further used to protect and control their data (see functionalities 3 and 5). These ZKT come from a user incentive pool which will be used to incentivize users to participate in the ZKT ecosystem.
(ii) Existing use case 2 – personal data management
Managing your personal data is a second crucial step in helping people gain control. If you create an accurate set of your personal data – as opposed to the inaccurate, unethically sourced and often outdated personal data brands use today – your Profila will become very attractive to brands. Our goal is that this data set becomes the only source of true personal data about you. People who build up an accurate (digital) profile of themselves in the Profila app, receive an amount of ZKT as a reward that can be further used to protect and control their data (see functionalities 3 & 5).
(iii) Existing use case 3 – privacy rights management
Enforcing your rights is a third crucial step for people to gain control over their personal data. People can control their data effectively and consciously by exercising their data subject rights. In order to access this digital service, you need to deploy or use some ZKT – which you either bought during the ZKT Sale or received under functionalities 1 and/or 2 (privacy education and personal data management). The reasons to make access to this digital service depended on a small amount of ZKA is to (1) Combat abuse and excessive request - to make sure that this privacy right management service is not abused by people sending an excessive amount of data subject rights request to brands, and (2) Cover blockchain transaction fees - as explained in our Catalyst proposal "Control your data – privacy ledger", important metadata about each right you exercise gets encrypted and saved on the Cardano blockchain (your name, specific right, data, specific brand). The average transaction fee equates to roughly 0.16 to 0.17 ADA (Cardano's token) and can be paid in native tokens like ZKT instead of in ADA.
(iv) Existing functionalities 4 – personal data sharing
Controlling who has access to your data is a fourth crucial step in helping people (re-)gain control over their personal data. People who use our data subscriptions (as explained, infra, section 3.1.b) of the Whitepaper) to ethically share their personal data/ digital profiles with brands of their choosing, under the terms accepted and controlled by each individual, can today be paid out in fiat currencies (via a stripe integration). Now, we are building a smart contract system that saves all relevant information you as an individual shared with a company onto the Cardano blockchain (in encrypted form), in exchange for a faster payout in ZKT.
More information about this function of ZKT can be found in our funded project that received funding under Catalyst Fund 6, "Dapp to control/monetize your data".
(v) Ongoing functionalities 5 – zero-knowledge advertising
The final and an important future use case of ZKT in helping people (re-)gain control over their personal data is our Zero Knowledge Advertising system, which guarantees full anonymity during your online activities (unless turned off by the individual). An individual (you) who chooses to activate Zero Knowledge Advertising in the Profila App, can choose to browse the internet anonymously (on each browser with a Profila plugin and each mobile app which installed a Profila SDK) – while still watching relevant content as defined by him/her via Profila – by making use of a peer-to-peer network of other Profila users that (help) hide his/her identity towards advertisers and publishers. The latter still have a guarantee that their content is viewed by relevant people, but do not (need to) know the personal information about the viewer. Each Profila user or "peer" in the network who participates to keep the anonymity of another user will receive a small amount of ZKT deducted from the advertisement income you (50%) and Profila (50%) receive. Only if you hold ZKT can you access this anonymity functionality.
For more info about the different stages of the Project development, see section 5 of the Whitepaper.
What other challenges are ahead in our "Zero-knowledge advertising & insights" development roadmap?
This smart-contract project is only the first step into our broader Cardano technology adoption and integration around zero-knowledge advertising and insights, which all relate to the control of your personal data and your attention by you as an individual. Under the next funds, we want to submit additional project proposals for important features we want to develop as part of this effort:
- step 1 - personal data license smart contract - fund 6 (funded).
Recording a company's access to your personal data, including the terms of such access (compensation to you, duration, purpose, etc) on the Cardano blockchain, so you have immutable proof for each piece of data you shared, ever.
<https://cardano.ideascale.com/a/dtd/Dapp-to-control-monetize-your-data/366908-48088>
- step 2 - privacy ledger – fund 5 (funded).
A ledger for all privacy interactions via the privacy rights management platform. UPDATE - We have submitted this proposal under the "metadata challenge" of FUND 5 and received the first place! #thankyouADAcommunity.
https://cardano.ideascale.com/a/dtd/Control-your-data-%E2%80%93-privacy-ledger/350680-48088. We will keep you posted on our progress.
- Step 3 - digital ID - fund 6 (funded).
Atala implementation – If you want to control your data online and receive (financial) compensation for your data, it is important you can provide proof of your identity. Atala Prism is the perfect solution. By integrating Atala, we can better guarantee that the correct person is sharing information and is receiving payments. We have submitted this proposal under the FUND 6 challenge "Atala PRISM DID Mass-Scale Adoption" and were funded! #thankyouADAcommunity.
https://cardano.ideascale.com/a/campaign-home/26116
- step 4 - zero-knowledge advertising and zero knowledge token - this is the current proposal under fund 7.
For more information about our research paper "Zero Knowledge Advertising: a new era of privacy-preserving AdTech solutions", and our Zero Knowledge Token whitepaper, see our token sale website <https://ico.profila.com> or the documents attached to this proposal.
4. Practical aspects – "show us the money" – costs
Via this submission, we are requesting funding to develop our ZKT / Cardano-native token integration. This will require at least a budget of 25.050 USD for a 3-month development project, to be allocated as follows:
- 12 days of senior blockchain developer @ 900 USD per day – totaling 10.800 USD
- 15 days of web/backend developer @ 300 USD per day – totaling +/- 4.500 USD
- 15 days of app developer @ 300 USD per hour – totaling +/- 4.500 USD
- 7 days of project management and reporting @ 750USD per day – totaling +/- 5.250 USD
We are aware the the project described in this proposal will require more funds than only the 25.000 USD asked, but we will be paying for additional development ourselves via our token sale proceeds, if the token sale (21-28 January 2022) provides us with sufficient funds.
Who will be the senior blockchain developer? Our own CTO Raja is becoming well acquainted with the technology via the Plutus pioneer program, also created the token on 22 November 2021. In addition, we are very pleased with the help we are getting from IOHK's professional services team as well.
5. Practical aspects – "getting on the road" – GTM; geographical focus; target customer
At the time of the submission of our application to Catalyst Fund 7, the development of our Profila App is finalized and we are onboarding/setting up 5 small and medium enterprises (SME) to trial with their existing consumers. This section explains more about our GTM, ideal location, target customers etc.
(1) Go-to-Market – our Go-to-Market is B2B2C, namely working with brands to invite their existing consumers onto the Profila App, as a new communication channel that is privacy compliant and consumer centric. As part of the onboarding process of these brands, we work together with them to design a promotional campaign via email/social media, via which they invite their best customers to engage with them via Profila.
We have signed up 5x SMEs in 3 regions (see below), who in total have around 500.000 existing customers all combined. Considering that we expect 5% of this customer base to accept the invitation and join Profila, we foresee 25.000 active Profila users in 2022 (Q2 2022). According to our active brand onboarding efforts, this should grow to 78.000 by the end of 2022 (by adding more brands).
(2) Geographical focus market? We are launching the Profila App with 5 SME Brands in 3 regions in Q3 2021 (Benelux - Switzerland - Orlando/California).
(3) Ideal consumer segment? – privacy-aware and digitally savvy "Millennials" (adults between the ages of 22 and 39 years old) that are ware that they have rights to their personal data, but do not yet have an easy tool to control it; and "brand-loyalists" (consumers that have an affinity with the brand and would like to have a closer 1-1 relationship).
(4) Ideal SME segment? – SME companies in these 3 regions that respect consumer privacy and want a better relationship with their consumers, with a prime focus on SMEs in the following industries: (1) fashion, (2) travel, (3) leisure/recreation.
(5) Marketing, Website & social media presence – We have focused our 3-year research and development phase (as well as our funding) on the development and testing of our consumer app and brand dashboard and have – on purpose – not made much noise about our project until now. Now that the first product is ready and being tested, and now that we are in the middle of our Cardano-native token sale, we are conducting many marketing campaigns on LinkedIn <https://www.linkedin.com/company/profilaprivacy> (B2B, attracting new companies that want to have a different relationship as described above), we have been rebuilding our company Website www.profila.com, as well as our token sale website <https://ico.profila.com> and will start a consumer campaign on social media focusing on our ideal customer target (see above).
(6) Brand adoption of our solution. Why would brands change their current data use model? The strategy many companies adopted for a while now is big data collection and full use of their data as they please. However, there are many reasons why the tides are changing and a model such as ours will (have to be) be adopted by brands. Just to highlight a few:
- inaccurate data - research shows that many brands hold inaccurate and outdated data, which doesn't help brands serve their customers well but on the contrary poses a bigger risk for data leaks / privacy breaches. CRM systems need accurate personal data, which can only be kept up to data by (and with the consent of) the individual.
- pressure of regulation - recent privacy laws adopted over the entire world (GDPR in Europe, CCPA in USA, LGDP in Brazil, POPPI in SA etc) are making it impossible for brands to continue their existing data collecting practices. Data subjects rights, transparency requirements, data minimization obligations all push brands into our direction.
- promising feedback and testing - The MOST important reason why we believe in our model is our conversations with big brands over the last 4 years. The PPT deck attached to this proposal shows a few of these brands that we spoke to. in short: Brands seem to get it. They get it that their data is inaccurate, that they don't really know what their consumers want and how to approach them most effectively; they get it that the new model requires an interaction with their customers. We are now setting up trials with several brands and are confident the (test) data will show that by listening to consumers, they will get a better understanding of how to treat their loyal customers better.
6. Intellectual Property information (freedom to operate; IP registrations; contracts)
As an intellectual property lawyer, I made sure that all Profila's intellectual property (IP)-assets are documented/protected:
First, we have conducted a thorough freedom to operate study and patent landscape analysis with the Swiss Innovation Agency, to make sure we are free to develop and commercialize our current technology without infringing on third-party rights.
Second, we have filed for the necessary trademarks that protect our logos and trade names in commerce.
In addition, we have a solid contractual framework in place with all of our suppliers, employees, contractors and customers. All parties involved in our day-to-day activities are doing so under a contract, which include the necessary IP transfer-, confidentiality- and non-compete obligations that protect (and collect) our company's intellectual assets. As part of that, every contracted developer has assigned all IP rights to the Profila App to us, which we will also require from developers working on this project.
Finally, we are looking into open sourcing the majority of the technology (code) developed under this project and will assess (and take feedback) on an ongoing basis which components would be of interest to the community.
Please consult Profila's GitHub - <https://github.com/Profila-Platform>
Profila website
<https://profila.com>
Zero Knowlegde Token website
<https://ico.profila.com>
Profila LinkedIn
<https://www.linkedin.com/company/profilaprivacy>
Social Media Channels
Twitter: @profilaprivacy
Facebook: <https://www.facebook.com/profilaprivacy>
Instagram: @profilaprivacy
Telegram: <https://t.me/joinchat/wRevEh4Q0Wo5NGQ0>
Discord: <https://discord.gg/EfN4ZYbK>
Reddit: r/ProfilaPrivacy
Medium: <https://medium.com/profila-com>
YouTube: <https://www.youtube.com/channel/UC3tD3W41z9zcgiopcT1jMDQ>