Venture capitalists aren’t supposed to make their portfolio companies battle to the death. There’s a long-standing but unofficial rule that investors shouldn’t fund multiple competitors in the same space. Conflicts of interest could arise, information about one startup’s strategy could be improperly shared with the other, and the companies could become suspicious of advice provided by their investors. That leads to problems down the line for VCs, as founders may avoid them if they fear the firm might fund their rival down the line.

SoftBank shatters that norm with its juggernaut $100 billion Vision Fund plus its Innovation Fund. The investor hasn’t been shy about funding multiple sides of the same fight.

The problem is that SoftBank’s power distorts the market dynamics. Startups might take exploitative deals from the firm under the threat that they’ll be outspent whoever is willing to take the term sheet. That can hurt employees, especially ones joining later, who might have a reduced chance for a meaningful exit. SoftBank could advocate for mergers, acquisitions, or product differentiation that boost its odds of reaping a fortune at the expense of the startups’ potential.

Venture capitalists aren’t supposed to make their portfolio companies battle to the death. There’s a long-standing but unofficial rule that investors shouldn’t fund multiple competitors in the same space. Conflicts of interest could arise, information about one startup’s strategy could be improperly shared with the other, and the companies could become suspicious of advice provided by their investors. That leads to problems down the line for VCs, as founders may avoid them if they fear the firm might fund their rival down the line.

SoftBank shatters that norm with its juggernaut $100 billion Vision Fund plus its Innovation Fund. The investor hasn’t been shy about funding multiple sides of the same fight.

The problem is that SoftBank’s power distorts the market dynamics. Startups might take exploitative deals from the firm under the threat that they’ll be outspent whoever is willing to take the term sheet. That can hurt employees, especially ones joining later, who might have a reduced chance for a meaningful exit. SoftBank could advocate for mergers, acquisitions, or product differentiation that boost its odds of reaping a fortune at the expense of the startups’ potential.

I spent much of last week at blockchain conferences, and I’m about ready to never hear the word again. This despite the fact I’ve been supporting decentralized software, as a counterweight or at least alternative to the growing power of governments and megacorps, for years now. Do you think blockchains are no answer? Great, let’s discuss! I wholeheartedly support you skeptics with whom I cautiously disagree. What I can’t stand, it turns out, is an endless sea of true believers nominally on my side.

The believers are twofold, and the two groups grate differently. One group is there almost purely because there is money in the space: Wall Street types hoping to rule a new asset-tokenized world which may come to be; financial startups offering blockchain versions of existing financial tools; new marketplaces just like old marketplaces, except On The Blockchain, and therefore better.

It’s all too easy to envision a future in which the collective vampire squid that is the financial industry — which has gone from taking 14% of all US profits in 1985 to consistently raking in more like 25% over the last couple of decades — ironically turns blockchains into a tool for “financializing” the economy even more, routing every global transaction through even more middlepeople, each of them shaving off a basis point or two. I doubt this will ever happen — but it’s the clear goal of much of group one.

(And before you even think about blaming regulators for this continued attempt at creeping financialization, consider that the cryptocurrency casino is full of so much shadiness it serves as a superb object example of why regulators exist, even if a few of their rules are a bit hidebound and baffling in today’s world.)

Needless to say this was not the original vision. The original vision of Bitcoin was, quote, “A Peer-To-Peer Electronic Cash System.” How has that worked out? Well, as Tom Howard puts it, “It’s 2019. Where the fuck is our Global Peer-To-Peer Electronic Cash System?”¹ His conclusion: still not here.

He has a point — but in many ways the Bitcoin community is among the most admirable in the space. Their vision may have pivoted, from “medium of exchange” to “decentralized store of value,” but it is clear, and it is succeeding, they are making both sacrifices and technical leaps to advance it. (And maybe one day Lightning will provide us all scalable peer-to-peer payments atop Bitcoin. Maybe. One day.) Furthermore, people actually use Bitcoin in sizable numbers … albeit mostly for speculation.

The other group of true believers is the technical group, for whom I should have more love, as an engineer myself. But so much blockchain engineering is built on the unexamined presumption that blockchains are inevitably going to become wildly important, rather than an attempt to actually make them important in any way … again, other than the decentralized global casino of unregulated speculation.

There are still projects I like. Ethereum offered us the breakthrough concept of decentralized applications, although it turns out their usage rate is flat. Cosmos is an important and scalable alternative to Ethereum’s approach, although it’s only just launched. Blockstack’s approach is even more interesting, although the most successful Blockstack app — by far — has only 8,000 installs, still basically a rounding error, albeit one with an impressive growth rate.

And yet most of the non-financial people I met or read about last week were building new blockchains, or new tools for blockchains, new governance or voting systems to run atop blockchains, new blockchain analytics platforms, new ways to scale blockchains to handle the inevitable immense demand for their capacity … which is not at all apparent. The industry has so much potential, everyone agrees. It’s so revolutionary. It’s going to change everything. It’s going to be so important for the unbanked, everyone agreed, while standing in rooms full of bankers.

Meanwhile the decentralized Internet, “Web 3.0,” is beginning to feel like nuclear fusion or superpower Brazil: perpetually 10 years away. The belief is that scaling must be solved first — but premature scaling is exactly the mistake which has killed many a startup. Almost everyone in the space, financial or technical, seems primarily focused on tooling, infrastructure, platforms, and scaling, and writes off the lack of any non-believer users as merely “a UX problem” to vaguely be solved somehow in the future.

Maybe. Or maybe, a decade on from the Bitcoin whitepaper, it’s past time to instead be building applications that unbelievers who don’t care one whit about blockchains actually want to use, in the course of their everyday existence, at home and/or at work. If there are any fundamental issues other than scaling which prevent that from happening, then maybe it’s past time to focus on them instead.

¹ I feel compelled to note that Mr. Howard actually wrote “f*ck” to preserver his readers’ delicate sensibilities; TechCrunch, of course, has a long and proud history of not worrying about those.

Captain Kirk and neo-Dadaists. Repugnant markets and legendary cryptographers. “Digital couture” auctioned by CryptoKitties developers. Distributed autonomous art organizations. A keynote speech looking back from 2047 at the near-apocalypse of 2026, from which we were saved by a new, fully tokenized economy. Yes, that’s right: NYC Blockchain Week has begun.

Where to begin? I suppose with context. This week’s series of cryptocurrency conferences kicked off with “Ethereal,” hosted by Consensys, a company/incubator/studio mostly devoted to decentralized software and services built atop the Ethereum blockchain … although they also acquired an asteroid-mining company last year. Subsequently they laid off 13% of their staff, in the depths of the notorious “crypto winter” that followed the crypto bubble which ended abruptly last January.

You read it here first, though: we are now moving from crypto winter into crypto weirder.

In fairness, the Ethereum community has long been home to the starry-eyed idealists, utopians, and … let’s diplomatically call them “original thinkers” … of the blockchain world. Eyebrow-raising proposals are nothing new. At the same time, Ethereum’s programmability also attracts many hard-headed money people increasingly fascinated by the prospects and potential profits of “DeFi,” decentralized finance.

DeFi, to oversimplify, incorporates and transcends the ICO craze of 2017-18 (most of which were Ethereum tokens) into decentralized platforms for loans, currency stabilization, insurance, clearinghouses, even derivatives, and much more. Its current poster child is the MakerDAO, a “stablecoin” system, i.e. a token intended to maintain a constant dollar value, maintained not by direct fiat collateral but by a complex architecture of cryptocurrency loans orchestrated by smart contracts.

But if you ask DeFi’s true believers, MakerDAO is merely an initial proof-of-concept of the larger DeFi vision. Its long-term prospects are immense, spanning all of the many tentacles of Wall Street and the financial industry, and immensely valuable. Assuming regulators are willing to play ball, of course…

And so the attendees at Ethereal are a colorful mix of serious financial and legal types. In the first group: former hedge-fund billionaire Michael Novogratz, or Rocket Lawyer CEO Charley Moore, there to announce the beta launch of their “Rocket Wallet” offering “legal contract execution and payments on the Ethereum blockchain.” In the second category: the abovementioned starry-eyed dreamers, weirdos, and artists, with whom you might find yourself discussing the dangers of a generalized on-chain AI ArtDAO which might run amok and transform the planet (and humanity) not into paperclips but into a planet-scale work of art. I suppose there are worse ways to go.

Do I sound dismissive? Au contraire; I’m all about the dreamers and weirdos. (I mean, I am one, although I was probably the only attendee whose pet Ethereum project is explicitly designed to never have any monetary value. Even the dreamers generally still want to get rich.) The most interesting thing about the blockchain / cryptocurrency space is that it is full of people who do not hesitate to question some of the most basic underpinnings of our society, our social constructs so fundamental they are often mistaken for laws of nature.

The concept of money. The existence of financial intermediaries. The partitioning of the world into geographically defined nation-states. That sort of thing. What’s more, they question them with an eye towards improving or even replacing them, generally with (admittedly usually at-best-half-baked) iterations and solutions in mind. Such people are definitionally weird, and tend to view the status quo so skeptically that they believe it’s inevitably headed for some kind of apocalyptic demise … but their questions are valuable even if you don’t agree with their answers.

Not least when they highlight genuine problems with the way things currently work. Leah Callon-Butler of intimate.io spoke at Ethereal about “repugnant markets,” which are entirely legal but which face such social disapproval that ordinary business and transactions face substantial difficulties. In the US, of course, that generally means sex — and not even porn. Within the last few years, Chase Bank has refused to process payments for a condom company; Square rejected Early to Bed, a woman-owned sex toy store; and CES banned a sex toy after they gave it an award. One can’t help but think that there has to be a better way.

Similarly, sure, it’s amusing that, after announcing a partnership with Mattereum (who I’ve written about before) to track the provenance of collectible memorabilia, William Shatner got into a Twitter fight about the fine technical details of data storage on the Ethereum blockchain — and won by dint of being completely correct! — but it also highlights the fact that provenance is a really hard problem, and existing solutions are deeply imperfect at best.

So bring on the crypto weirder, says me. Speculation, trying to make money from the oft-inexplicable ups and downs of the “crypto casino,” is boring and breeds scams, hucksters, bad faith, fraud, and outright robbery. Actually trying to build distributed networks and platforms, which do old things in new disintermediated ways, or better yet entirely new things — now that’s interesting, even if/when 90+% of them fail. The crypto weirder means more of the latter and less of the former. It’s about time.

Choice for consumers compels fair treatment by corporations. When people can easily move to a competitor, it creates a natural market dynamic coercing a business to act right. When we can’t, other regulations just leave us trapped with a pig in a fresh coat of lipstick.

That’s why as the FTC considers how many billions to fine Facebook or which executives to stick with personal liability or whether to go full-tilt and break up the company, I implore it to consider the root of how Facebook gets away with abusing user privacy: there’s no simple way to switch to an alternative.

If Facebook users are fed up with the surveillance, security breaches, false news, or hatred, there’s no western general purpose social network with scale for them to join. Twitter is for short-form public content, Snapchat is for ephemeral communication. Tumblr is neglected. Google+ is dead. Instagram is owned by Facebook. And the rest are either Chinese, single-purpose, or tiny.

No, I don’t expect the FTC to launch its own “Fedbook” social network. But what it can do is pave an escape route from Facebook so worthy alternatives become viable options. That’s why the FTC must require Facebook offer truly interoperable data portability for the social graph.

In other words, the government should pass regulations forcing Facebook to let you export your friend list to other social networks in a privacy-safe way. This would allow you to connect with or follow those people elsewhere so you could leave Facebook without losing touch with your friends. The increased threat of people ditching Facebook for competitors would create a much stronger incentive to protect users and society.

The slate of potential regulations for Facebook currently being discussed by the FTC’s heads include a $3 billion to $5 billion fine or greater, holding Facebook CEO personally liable for violations of an FTC consent decree, creating new privacy and compliance positions including one held by executive that could be filled by Zuckerberg, creating an independent oversight committee to review privacy and product decisions, accordng to the New York Times and Washington Post. More extreme measures like restricting how Facebook collects and uses data for ad targeting, blocking future acquisitions, or breaking up the company are still possible but seemingly less likely.

Facebook co-founder Chris Hughes (right) recently wrote a scathing call to break up Facebook.

Breaking apart Facebook is a tantalizing punishment for the company’s wrongdoings. Still, I somewhat agree with Zuckerberg’s response to co-founder Chris Hughes’ call to split up the company, which he said “isn’t going to do anything to help” directly fix Facebook’s privacy or misinformation issues. Given Facebook likely wouldn’t try to make more acquisitions of big social networks under all this scrutiny, it’d benefit from voluntarily pledging not to attempt these buys for at least three to five years. Otherwise, regulators could impose that ban, which might be more politically attainable with fewer messy downstream effects,

Yet without this data portability regulation, Facebook can pay a fine and go back to business as usual. It can accept additional privacy oversight without fundamentally changing its product. It can become liable for upholding the bare minimum letter of the law while still breaking the spirit. And even if it was broken up, users still couldn’t switch from Facebook to Instagram, or from Instagram and WhatsApp to somewhere new.

Facebook Kills Competition With User Lock-In

When faced with competition in the past, Facebook has snapped into action improving itself. Fearing Google+ in 2011, Zuckerberg vowed “Carthage must be destroyed” and the company scrambled to launch Messenger, the Timeline profile, Graph Search, photo improvements and more. After realizing the importance of mobile in 2012, Facebook redesigned its app, reorganized its teams, and demanded employees carry Android phones for “dogfooding” testing. And when Snapchat was still rapidly growing into a rival, Facebook cloned its Stories and is now adopting the philosophy of ephemerality.

Mark Zuckerberg visualizes his social graph at a Facebook conference

Each time Facebook felt threatened, it was spurred to improve its product for consumers. But once it had defeated its competitors, muted their growth, or confined them to a niche purpose, Facebook’s privacy policies worsened. Anti-trust scholar Dina Srinivasan explains this in her summary of her paper “The Anti-Trust Case Against Facebook”:

“When dozens of companies competed in an attempt to win market share, and all competing products were priced at zero—privacy quickly emerged as a key differentiator. When Facebook entered the market it specifically promised users: “We do not and will not use cookies to collect private information from any user.” Competition didn’t only restrain Facebook’s ability to track users. It restrained every social network from trying to engage in this behavior . . .  the exit of competition greenlit a change in conduct by the sole surviving firm. By early 2014, dozens of rivals that initially competed with Facebook had effectively exited the market. In June of 2014, rival Google announced it would shut down its competitive social network, ceding the social network market to Facebook.

For Facebook, the network effects of more than a billion users on a closed-communications protocol further locked in the market in its favor. These circumstances—the exit of competition and the lock-in of consumers—finally allowed Facebook to get consumers to agree to something they had resisted from the beginning. Almost simultaneous with Google’s exit, Facebook announced (also in June of 2014) that it would begin to track users’ behavior on websites and apps across the Internet and use the data gleaned from such surveillance to target and influence consumers. Shortly thereafter, it started tracking non-users too. It uses the “like” buttons and other software licenses to do so.”

This is why the FTC must seek regulation that not only punishes Facebook for wrongdoings, but that lets consumers do the same. Users can punch holes in Facebook by leaving, both depriving it of ad revenue and reducing its network effect for others. Empowering them with the ability to take their friend list with them gives users a taller seat at the table. I’m calling for what University Of Chicago professors Luigi Zingales and Guy Rolnik termed a Social Data Portability Act.

Luckily, Facebook already has a framework for this data portability through a feature called Find Friends. You connect your Facebook account to another app, and you can find your Facebook friends who are already on that app.

But the problem is that in the past, Facebook has repeatedly blocked competitors from using Find Friends. That includes cutting off Twitter, Vine, Voxer, and MessageMe, while Phhhoto was blocked from letting you find your Instagram friends…six months before Instagram copied Phhhoto’s core back-and-forth GIF feature and named it Boomerang. Then there’s the issue that you need an active Facebook account to use Find Friends. That nullifies its utility as a way to bring your social graph with you when you leave Facebook.

Facebook’s “Find Friends” feature used to let Twitter users follow their Facebook friends, but Facebook later cut off access for competitors including Twitter and Vine seen here

The social network does offer a way to “Download Your Information” which is helpful for exporting photos, status updates, messages, and other data about you. Yet the friend list can only be exported as a text list of names in HTML or JSON format. Names aren’t linked to their corresponding Facebook profiles or any unique identifier, so there’s no way to find your friend John Smith amongst everyone with that name on another app. And less than 5 percent of my 2800 connections had used the little-known option to allow friends to export their email address. What about the big “Data Transfer Project” Facebook announced 10 months ago in partnership with Google, Twitter, and Microsoft to provide more portability? It’s released nothing so far, raising questions of whether it was vaporware designed to ward off regulators.

Essentially, this all means that Facebook provides zero portability for your friendships. That’s what regulators need to change. There’s already precedent for this. The Telecommunications Act of 1996 saw FCC require phone service carriers to allow customers to easily port their numbers to another carrier rather than having to be assigned a new number. If you think of a phone number as a method by which friends connect with you, it would be reasonable for regulators to declare that the modern equivalent — your social network friend connections — must be similarly portable.

How To Unchain Our Friendships

Facebook should be required to let you export a truly interoperable friend list that can be imported into other apps in a privacy-safe way.

To do that, Facebook should allow you to download a version of the list that feature hashed versions of the phone numbers and email addresses friends used to sign up. You wouldn’t be able to read that contact info or freely import and spam people. But Facebook could be required to share documentation teaching developers of other apps to build a feature that safely cross-checks the hashed numbers and email addresses against those of people who had signed up for their app. That developer wouldn’t be able to read the contact info from Facebook either, or store any useful data about people who hadn’t signed up for their app. But if the phone number or email address of someone in your exported Facebook friend list matched one of their users, they could offer to let you connect with or follow them.

This system would let you save your social graph, delete your Facebook account, and then find your friends on other apps without ever jeopardizing the privacy of their contact info. Users would no longer be locked into Facebook and could freely choose to move their friendships to whatever social network treats them best. And Facebook wouldn’t be able to block competitors from using it.

The result would much more closely align the goals of users, Facebook, and the regulators. Facebook wouldn’t merely be responsible to the government for technically complying with new fines, oversight, or liability. It would finally have to compete to provide the best social app rather than relying on its network effect to handcuff users to its service.

This same model of data portability regulation could be expanded to any app with over 1 billion users, or even 100 million users to ensure YouTube, Twitter, Snapchat, or Reddit couldn’t lock down users either. By only applying the rule to apps with a sufficiently large user base, the regulation wouldn’t hinder new startup entrants to the market and accidentally create a moat around well-funded incumbents like Facebook that can afford the engineering chore. Data portability regulation combined with a fine, liability, oversight, and a ban on future acquisitions of social networks could set Facebook straight without breaking it up.

Users have a lot of complaints about Facebook that go beyond strictly privacy. But their recourse is always limited because for many functions there’s nowhere else to go, and it’s too hard to go there. By fixing the latter, the FTC could stimulate the rise of Facebook alternatives so that users rather regulators can play king-maker.

Mark Zuckerberg: “The future is private”. Sundar Pichai: ~The present is private~. While both CEO’s made protecting user data a central theme of their conference keynotes this month, Facebook’s product updates were mostly vague vaporware while Google’s were either ready to ship or ready to demo. The contrast highlights the divergence in strategy between the two tech giants.

For Facebook, privacy is a talking point meant to boost confidence in sharing, deter regulators, and repair its battered image. For Google, privacy is functional, going hand-in-hand with on-device data processing to make features faster and more widely accessible.

Everyone wants tech to be more private, but we must discern between promises and delivery. Like “mobile”, “on-demand”, “AI”, and “blockchain” before it, “privacy” can’t be taken at face value. We deserve improvements to the core of how our software and hardware work, not cosmetic add-ons and instantiations no one is asking for.

AMY OSBORNE/AFP/Getty Images

At Facebook’s F8 last week, we heard from Zuckerberg about how “Privacy gives us the freedom to be ourselves” and he reiterated how that would happen through ephemerality and secure data storage. He said Messenger and Instagram Direct will become encrypted…eventually…which Zuckerberg had already announced in January and detailed in March. We didn’t get the Clear History feature that Zuckerberg made the privacy centerpiece of his 2018 conference, or anything about the Data Transfer Project that’s been silent for the 10 months since it’s reveal.

What users did get was a clumsy joke from Zuckerberg about how “I get that a lot of people aren’t sure that we’re serious about this. I know that we don’t exactly have the strongest reputation on privacy right now to put it lightly. But I’m committed to doing this well.” No one laughed. At least he admitted that “It’s not going to happen overnight.”

But it shouldn’t have to. Facebook made its first massive privacy mistake in 2007 with Beacon, which quietly relayed your off-site ecommerce and web activity to your friends. It’s had 12 years, a deal with the FTC promising to improve, countless screwups and apologies, the democracy-shaking Cambridge Analytica scandal, and hours of being grilled by congress to get serious about the problem. That makes it clear that if “the future is private”, then the past wasn’t. Facebook is too late here to receive the benefit of the doubt.

At Google’s I/O, we saw demos from Pichai showing how “our work on privacy and security is never done. And we want to do more to stay ahead of constantly evolving user expectations.” Instead of waiting to fall so far behind that users demand more privacy, Google has been steadily working on it for the past decade since it introduced Chrome incognito mode. It’s changed directions away from using Gmail content to target ads and allowing any developer to request access to your email, though there are plenty of sins to atone for. Now when the company is hit with scandals, it’s typically over its frightening efficiency as with its cancelled Project Maven AI military tech, not its creepiness.

Google made more progress on privacy in low-key updates in the runup to I/O than Facebook did on stage. In the past month it launched the ability to use your Android device as a physical security key, and a new auto-delete feature rolling out in the coming weeks that erases your web and app activity after 3 or 18 months. Then in its keynote today, it published “privacy commitments” for Made By Google products like Nest detailing exactly how they use your data and your control over that. For example, the new Nest Home Max does all its Face Match processing on device so facial recognition data isn’t sent to Google. Failing to note there’s a microphone in its Nest security alarm did cause an uproar in February, but the company has already course-corrected

That concept of on-device processing is a hallmark of the new Android 10 Q operating system. Opening in beta to developers today, it comes with almost 50 new security and privacy features like TLS 1.3 support and Mac address randomization. Google Assistant will now be better protected, Pichai told a cheering crowd. “Further advances in deep learning have allowed us to combine and shrink the 100 gigabyte models down to half a gigabyte — small enough to bring it onto mobile devices.” This makes Assistant not only more private, but fast enough that it’s quicker to navigate your phone by voice than touch. Here, privacy and utility intertwine.

The result is that Google can listen to video chats and caption them for you in real-time, transcribe in-person conversations, or relay aloud your typed responses to a phone call without transmitting audio data to the cloud. That could be a huge help if you’re hearing or vision impaired, or just have your hands full. A lot of the new Assistant features coming to Google Pixel phones this year will even work in Airplane mode. Pichai says that “Gboard is already using federated learning to improve next word prediction, as well as emoji prediction across 10s of millions of devices” by using on-phone processing so only improvements to Google’s AI are sent to the company, not what you typed.

Google’s senior director of Android Stephanie Cuthbertson hammered the idea home, noting that “On device machine learning powers everything from these incredible breakthroughs like Live Captions to helpful everyday features like Smart Reply. And it does this with no user input ever leaving the phone, all of which protects user privacy.” Apple pioneered much of the on-device processing, and many Google features still rely on cloud computing, but it’s swiftly progressing.

When Google does make privacy announcements about things that aren’t about to ship, they’re significant and will be worth the wait. Chrome will implement anti-fingerprinting tech and change cookies to be more private so only the site that created them can use them. And Incognito Mode will soon come to the Google Maps and Search apps.

Pichai didn’t have to rely on grand proclamations, cringey jokes, or imaginary product changes to get his message across. Privacy isn’t just a means to an end for Google. It’s not a PR strategy. And it’s not some theoretical part of tomorrow like it is for Zuckerberg and Facebook. It’s now a natural part of building user-first technology…after 20 years of more cavalier attitudes towards data. That new approach is why the company dedicated to organizing the world’s information is getting so little backlash.

With privacy, it’s all about show, don’t tell.

Mark Zuckerberg: “The future is private”. Sundar Pichai: ~The present is private~. While both CEO’s made protecting user data a central theme of their conference keynotes this month, Facebook’s product updates were mostly vague vaporware while Google’s were either ready to ship or ready to demo. The contrast highlights the divergence in strategy between the two tech giants.

For Facebook, privacy is a talking point meant to boost confidence in sharing, deter regulators, and repair its battered image. For Google, privacy is functional, going hand-in-hand with on-device data processing to make features faster and more widely accessible.

Everyone wants tech to be more private, but we must discern between promises and delivery. Like “mobile”, “on-demand”, “AI”, and “blockchain” before it, “privacy” can’t be taken at face value. We deserve improvements to the core of how our software and hardware work, not cosmetic add-ons and instantiations no one is asking for.

AMY OSBORNE/AFP/Getty Images

At Facebook’s F8 last week, we heard from Zuckerberg about how “Privacy gives us the freedom to be ourselves” and he reiterated how that would happen through ephemerality and secure data storage. He said Messenger and Instagram Direct will become encrypted…eventually…which Zuckerberg had already announced in January and detailed in March. We didn’t get the Clear History feature that Zuckerberg made the privacy centerpiece of his 2018 conference, or anything about the Data Transfer Project that’s been silent for the 10 months since it’s reveal.

What users did get was a clumsy joke from Zuckerberg about how “I get that a lot of people aren’t sure that we’re serious about this. I know that we don’t exactly have the strongest reputation on privacy right now to put it lightly. But I’m committed to doing this well.” No one laughed. At least he admitted that “It’s not going to happen overnight.”

But it shouldn’t have to. Facebook made its first massive privacy mistake in 2007 with Beacon, which quietly relayed your off-site ecommerce and web activity to your friends. It’s had 12 years, a deal with the FTC promising to improve, countless screwups and apologies, the democracy-shaking Cambridge Analytica scandal, and hours of being grilled by congress to get serious about the problem. That makes it clear that if “the future is private”, then the past wasn’t. Facebook is too late here to receive the benefit of the doubt.

At Google’s I/O, we saw demos from Pichai showing how “our work on privacy and security is never done. And we want to do more to stay ahead of constantly evolving user expectations.” Instead of waiting to fall so far behind that users demand more privacy, Google has been steadily working on it for the past decade since it introduced Chrome incognito mode. It’s changed directions away from using Gmail content to target ads and allowing any developer to request access to your email, though there are plenty of sins to atone for. Now when the company is hit with scandals, it’s typically over its frightening efficiency as with its cancelled Project Maven AI military tech, not its creepiness.

Google made more progress on privacy in low-key updates in the runup to I/O than Facebook did on stage. In the past month it launched the ability to use your Android device as a physical security key, and a new auto-delete feature rolling out in the coming weeks that erases your web and app activity after 3 or 18 months. Then in its keynote today, it published “privacy commitments” for Made By Google products like Nest detailing exactly how they use your data and your control over that. For example, the new Nest Home Max does all its Face Match processing on device so facial recognition data isn’t sent to Google. Failing to note there’s a microphone in its Nest security alarm did cause an uproar in February, but the company has already course-corrected

That concept of on-device processing is a hallmark of the new Android 10 Q operating system. Opening in beta to developers today, it comes with almost 50 new security and privacy features like TLS 1.3 support and Mac address randomization. Google Assistant will now be better protected, Pichai told a cheering crowd. “Further advances in deep learning have allowed us to combine and shrink the 100 gigabyte models down to half a gigabyte — small enough to bring it onto mobile devices.” This makes Assistant not only more private, but fast enough that it’s quicker to navigate your phone by voice than touch. Here, privacy and utility intertwine.

The result is that Google can listen to video chats and caption them for you in real-time, transcribe in-person conversations, or relay aloud your typed responses to a phone call without transmitting audio data to the cloud. That could be a huge help if you’re hearing or vision impaired, or just have your hands full. A lot of the new Assistant features coming to Google Pixel phones this year will even work in Airplane mode. Pichai says that “Gboard is already using federated learning to improve next word prediction, as well as emoji prediction across 10s of millions of devices” by using on-phone processing so only improvements to Google’s AI are sent to the company, not what you typed.

Google’s senior director of Android Stephanie Cuthbertson hammered the idea home, noting that “On device machine learning powers everything from these incredible breakthroughs like Live Captions to helpful everyday features like Smart Reply. And it does this with no user input ever leaving the phone, all of which protects user privacy.” Apple pioneered much of the on-device processing, and many Google features still rely on cloud computing, but it’s swiftly progressing.

When Google does make privacy announcements about things that aren’t about to ship, they’re significant and will be worth the wait. Chrome will implement anti-fingerprinting tech and change cookies to be more private so only the site that created them can use them. And Incognito Mode will soon come to the Google Maps and Search apps.

Pichai didn’t have to rely on grand proclamations, cringey jokes, or imaginary product changes to get his message across. Privacy isn’t just a means to an end for Google. It’s not a PR strategy. And it’s not some theoretical part of tomorrow like it is for Zuckerberg and Facebook. It’s now a natural part of building user-first technology…after 20 years of more cavalier attitudes towards data. That new approach is why the company dedicated to organizing the world’s information is getting so little backlash.

With privacy, it’s all about show, don’t tell.

“The future is private,” said Mark Zuckerberg of Facebook’s roadmap, after conceding “we don’t exactly have the strongest reputation on privacy right now, to put it lightly.” But it’s easy to see why he would genuinely want that … now. Facebook’s seemingly endless series of privacy debacles have been disastrous for the company’s reputation.

Not its revenue, mind you; but revenue is famously a lagging indicator in the tech industry. Companies which, like Facebook, effectively become utilities, tend to maximize their income just as their use becomes ubiquitous — not because people especially like them any more, but because there seems to be no better alternative. (See also: Craigslist. PayPal. An obscure little company called MySpace which you may have heard of once.)

But “the future is private,” the vision of Facebook as a platform for groups and individuals sharing end-to-end-encrypted messages, the content of which it cannot be criticized for because it is literally incapable of knowing, sounds like a pretty gargantuan shift in business model, too. “Senator, we sell ads,” is another famous Zuckerberg quote. Won’t end-to-end encryption, and the de-emphasis of the continuously scrollable News Feed in favor of more discrete communications, strip Facebook of both valuable ad space and valuable ad-targeting information?

Probably. But it’s already painfully clear that Facebook wants to do far more than just sell ads against News Feed attention to make money. That got them where they are, but it has its limits, and of late, it’s also attracted a volcano of furious attention, and a fake-news firestorm. So don’t look where their puck is; look where it’s going. Look at Facebook Marketplace; look at Facebook’s cryptocurrency plans; look at their purchase of WhatsApp and how Facebook Messenger was broken out into its own app.

It seems clear that what Facebook really wants next is for Messenger to become WeChat for the rest of the world. An impregnable walled garden, used for business communications as well as personal. One which dominates not just messaging but commerce. A platform capable of transcending — and replacing — credit cards.

That would be enormously lucrative. That would also immensely reduce public and regulatory scrutiny and outrage: when outrages and atrocities are plotted and performed over Messenger, as they inevitably will be, Facebook will point out, quite correctly, that it is mathematically impossible for them to monitor and censor those messages, and that by keeping it mathematically impossible they are preserving their users’ privacy.

Does that sound hypocritical? What a narrow, short-sighted view. The irony is that it’s now entirely possible to envision a thriving future for Facebook which does not really include — well — Facebook. One in which Instagram is the king of all social media, while Messenger/WhatsApp rule messaging, occupy the half-trillion dollar international-remittances space, and also take basis points from millions of daily transactions performed on them …

…while what we used to know as “Facebook,” that once-famous app and web site, languishes as a neglected relic, used by a diminishing and increasingly middle-aged audience for event planning and sporadic life updates, yet another zombie social medium like LiveJournal and MySpace and so many others before. But one which birthed new, stronger, more evolved, corporate titans before it withered away: online gardens not merely “walled” but “domed like Wakanda,” more resistant to regulation, less prone to unpleasant emergent properties and summons to testify to the Senate. Love or hate this idea, you have to concede that it would be, if it succeeded, the mother of all pivots.

Tumblr has been squandered ever since it was bought for $1.1 billion in 2013 by Yahoo, now part of Verizon Media Group. Without proper strategy or talent, the blogging tool and early meme-sharing network fell into decline while Medium and Instagram soared. Yahoo wrote down Tumblr’s value by $230 million in 2016. Then last year, Verizon evicted Tumblr’s huge and loyal base of porn bloggers, leaving no viable platform for independent adult content creators and curators.

Now the Wall Street Journal reports that TechCrunch parent company Verizon is considering selling Tumblr.

Many immediately hoped it’d change hands to an owner who’d embrace pornography, such as social media darling Pornhub. BuzzFeed quickly reported that Pornhub VP Corey Price told it “We’re extremely interested in acquiring the platform and are very much looking forward to one day restoring it to its former glory with NSFW content.”

But given Pornhub parent company MindGeek’s record of exploitation of adult performers, that could be a disastrous proceeding for the world of kink.

Outside of Pornhub, MindGeek owns many of the top porn streaming sites like YouPorn, RedTube, and GayTube. Widespread piracy of porn films by those sites has made it tough for performers to earn a living. Many smaller studios or performers don’t have the legal or financial resources to file constant copyright infringement takedown notices, and MindGeek’s sites have been accused of allow re-uploads of videos days after taking them down.

The truly insidious part is that MindGeek has also bought up a bunch of the top porn production studios including Brazzers, Babes.com, and Digital Playground. MindGeek has been accused of allowing those studios’ films to be pirated by its own streaming sites. That lets MindGeek earn and keep streaming ad revenue without giving performers a proper cut.

The result has been a massive decline in the wages of porn performers and the number of films being made. This is turn pushes performers into more rough and extreme porn genres they’re not comfortable with, or into other sex work like prostitution that can be dangerous. We reached out to Verizon Media Group which told us “we don’t comment on rumors, and we’re awaiting comment on piracy issues from MindGeek.

If Pornhub and MindGeek succeed in acquiring Tumblr to strengthen their near monopoly, they could end up exploiting porn bloggers and the performers they post about too. You could imagine the photos and GIFs in diverse porn genres that populated Tumblr getting scraped and shared across MindGeek’s network of sites beyond the bloggers’ or performers’ control. Or Tumblr’s porn blogs could be used to funnel traffic towards MindGeek’s crooked streaming sites, exacerbating the piracy problem. A more optimistic view is would be that Pornhub’s newer features that let performers set up their own paywalls could help Tumblr curators earn money for themselves…and MindGeek. If Pornhub managed to turn Tumblr around, it would deal a stern lesson to platforms that were quick to ban adult content.

Since many of the puritanical US government’s elected officials likely see porn performers as godless heathens undeserving of protection, they’re unlikely to try to safeguard the profession with anti-trust or fair payout regulation. The SESTA-FOSTA law that went into effect last year intending to stop sex trafficking ended up pushing sites like Tumblr, Facebook, and Patreon towards tougher crack downs on porn, nudity, or even innocent discussions about sex within support communities for LGTBQ people and other underprivileged minorities.

Unfortunately, MindGeek’s massive footprint means it might be willing to bid the highest price for Tumblr. If Verizon does sell Tumblr, it should seek a buyer with an upstanding record for how it treats creators. But Verizon could also modernize Tumblr to emphasize what’s differentiated about it in today’s tech landscape versus when it was founded in 2007. Obviously, it could reopen to porn. But there are also family friendly opportunities.

Tumblr was one of the first big meme-sharing communities, even spawning its own format of screenshots of progressively crazier replies to a short text post. Yet in 2019, the top meme networks like Instagram, Reddit, and Imgur aren’t actually built for distributing massive ‘dumps’ of memes. They don’t understand which you’ve already seen to prevent showing re-runs, or how remixes of an original meme all relate and should be linked. Tumblr could build meme-specific features that give users more curational power than Reddit and Imgur, but more freedom of expression under less pressure than Instagram.

Tumblr could also be repurposed into a “your Internet homepage” platform. Most social networks are so desperate to keep users on their apps that they restrict or deemphasize the ability to promote your other web presences. They also often focus on a narrow set of content types like photos and videos on Instagram. This leaves users who don’t have their own dedicated websites without a central hub where they can freely express their identity and link to profiles elsewhere. This is a huge opportunity for Tumblr, which has already established itself an open-ended self-expression platform open to a variety of content formats.

AOL, which was combined with Yahoo to form the Verizon Media Group, previously owned a web profile platform called About.me, but sold it back to its creator Tony Conrad in 2013. Tumblr could assume much of About.me’s functionality as a directory of someone’s presences on other apps, and add that to its blogging platform. Instead of being locked into Instagram and Pinterest’s grids and standardized designs, Tumblr could let people create a homepage collage representing their prismatic identities.

Tumblr’s already been waning in popularity for years, so Verizon might not have a lot to lose by giving Tumblr a year to execute on this strategy before selling it for surely much less than it bought it for in 2013. Tumblr’s remaining users deserve better than the platform fading into nothing or being sold to the unscrupulous.

If any pornography industry professionals want to weigh in, please contact this article’s author Josh Constine via phone/text or Signal encrypted messenger at (585)750-5674 or joshc ‘at’ techcrunch dot com.

“Power corrupts, and absolute power corrupts absolutely.” It seems darkly funny, now, that anyone ever dared to dream that tech would be different. But we did, once. We would build new companies in new ways, was the thinking, not like the amoral industrial behemoths of old. The corporate villains of 90s cyberpunk were fresh in our imaginations. We weren’t going to be like that. We were going to show that you could get rich, do good, and treat everyone who worked for or interacted with your business with fundamental decency, all at the same time.

The poster child for this was, of course, Google, whose corporate code of conduct for fifteen years famously included the motto “don’t be evil.” No longer, and the symbolism is all too apt. Since removing that phrase in 2015, we’ve all witnessed reports of widespread sexual harassment, including 13 senior managers fired for it; Project Maven; and Project Dragonfly. Internal backlashes and a mass walkout led to retractions and changes, courtesy of Google employees rather than management … and now we’re seeing multiple reports of management retaliation against those employees.

Facebook? I mean, where do we even begin. Rootkits on teenagers‘ phones. Privacy catastrophe after privacy catastrophe. Admissions that they didn’t do enough to prevent Facebook-fostered violence in Myanmar. Sheryl Sandberg personally ordering opposition research on a Facebook critic. And those are just stories from the last six months alone!

Amazon? Consider how they overwork and underpay delivery drivers and warehouse workers. Apple? Consider how they “deny Chinese users the ability to install the VPN and E2E messaging apps that would allow them to avoid pervasive censorship and surveillance,” to quote Stanford’s Alex Stamos. Microsoft? The grand dame of the Big Five has mostly evolved into a quiet enterprise respectability, but has recently seen “dozens of” reports of sexual harassment and discrimination ignored by HR, along with demands for cancellation of the HoloLens military contract.

Those are the five most valuable publicly traded companies in the world. It’s far from “absolute power,” but it’s far more power than the tech industry has had before. Have we avoided corruption and complacency? Have we done things differently? Have we been better than our predecessors? Not half so much as we hoped back in the giddy early days of the Internet. Not a quarter. Not an eighth.

And it’s mostly so gratuitous. Google didn’t need to try to build a censored search engine for China. They don’t need the money — they’re a giant money-printing machine already — and the Chinese people don’t need their product. Amazon doesn’t need to treat its lower-paid workers with vicious contempt. (It’s true they finally — finally! — raised their minimum wage to $15, but it could very easily afford to make their pay and working conditions substantially better yet.) Facebook doesn’t need to … to increasingly act like a company whose management is composed largely of wide-eyed cultists and/or mustache-twirling villains, basically.

Google should have promoted the organizers of their walkout, but there, at least, you can see why they didn’t. Raw fear. The one thing which truly frightens the management of big tech companies, more than regulators, more than competitors, more than climate change, is their own employees.

Is it that the modern megacorps have inherited from their forebears the obsession with growth at all costs, a religious drive to cast their net over every aspect of the entire world, so it’s still not enough for each of those companies to make billions upon billions from advertising and commerce to spend on their famous — and now sometimes infamous — “moonshot” projects? (Don’t talk to me about the fiduciary duty of maximum profit. Tech senior management can interpret that “duty” however they see fit.)

Is it that any sufficiently large and wealthy organization becomes, in its upper reaches, a nest of would-be Game of Thrones starlets, playing power politics with their pet projects and personal careers, regardless of the costs and repercussions? (At least when they are born of hypergrowth; it’s noticeable that more-mature Apple and Microsoft, while imperfect, still seem by some considerable distance the least objectionable of these Big Five, and Facebook the most so.)

I don’t want to sound like I think the tech industry is guilty of ruining everything. Not at all. The greatest trick the finance industry ever pulled is somehow convincing (some of) the world that it’s the tech industry who are the primary drivers of inequality. As for the many media who seem to be trying to pin recent election outcomes, and all other ills of the world, on tech, well —

But the existence of greater failures should not blind us to our own, and whether we have failed in an old way or a new one is moot. Accepting this failure is — at least for people like me who were once actually dumb/optimistic enough to believe that things might be different this time — an important step towards trying to build something better.

Tim Cook thinks people should get off their iPhones and decrease their engagement with apps. The Apple CEO, speaking at the TIME 100 Summit today, was discussing the addictive nature of our mobile devices and Apple’s role in the matter when he made these comments. He said the company hadn’t intended for people to be constantly using their iPhones, and noted he himself has silenced his push notifications in recent months.

“Apple never wanted to maximize user time. We’ve never been about that,” Cook explained.

It’s certainly an interesting claim, given that Apple designed a platform that allowed app developers to constantly ping their users with the most inane notifications — from getting a new follower on a social app to a sale in a shopping app to a new level added to a game and so much more.

The very idea behind the notification platform, opt-in as it may be, is that developers should actively — and in real-time — try to capture users’ attention and redirect them back to their apps.

This is not how such an alert mechanism had to be designed.

An app notification platform could have instead been crafted to allow app developers to notify users in batches, at designed intervals within users’ control. For example, users could have specified that every day at noon they’d like to check in on the latest from their apps.

Or, in building out the iOS App Store, Apple could have implemented a “news feed” of sorts — somewhere users could opt to check in on all the latest news from their installed apps in a dedicated channel.

Or perhaps Apple could have structured a notification platform that would have allowed users to pick between different classes of notifications. Urgent messages — like alerts about a security breach — could have been a top-level tier; while general information could have been sent as a different type of notification. Users could have selected which types of alerts they wanted, depending on how important the app was to them.

These are just a few of many possible iterations. A company like Apple could have easily come up with even more ideas.

But the fact of the matter is that Apple’s notification platform was built with the idea of increasing engagement in mind. It’s disingenuous to say it was not.

At the very least, Apple could admit that it was a different era back then, and didn’t realize the potential damage to our collective psyche that a continually buzzing iPhone would cause. It could point out how it’s now working to fix this problem by putting users back in control, and how it plans to do more in the future.

Instead, it created a situation where users had to turn to the only defense left to them: switching off push notifications entirely. Today, when users install new apps they often say “No” to push notifications. And with Apple’s new tools to control notifications, users are now actively triaging which apps can get in touch.

In fact, that’s what Tim Cook says he did, too.

“If you guys aren’t doing this — if you have an iPhone and you’re not doing it, I would encourage you to really do this —  monitor these [push notifications],” the CEO suggested to the audience.

“What it what has done for me personally is I’ve gone in and gutted the number of notifications,” Cook said. “Because I asked myself: do I really need to be getting thousands of notifications a day? It’s not something that is adding value to my life, or is making me a better person. And so I went in and chopped that.”

Yep. Even Apple’s CEO is done with all the spam and noise from iPhone apps.

The comment, of course, was supposed to be a veiled reference to the addictive nature of some apps — social media apps in particular, and especially Facebook. Today, Apple throws barbs at Facebook any time it can, now that the company has fallen out of public favor due to its ongoing data privacy violations and constant scandals.

But a more truthful telling of the iPhone’s past would recall that Facebook’s app — and all its many notifications — was originally a big selling point for Apple’s mobile device.

When the App Store first launched in 2008, Facebook proudly sat in the top row in a featured position. It was heavily promoted to users because it was a prime example of the iPhone’s utility: here was this popular social network you could now get to right from your phone. Amazing! 

The fact that Facebook — and every other app — later leveraged the iOS push notification platform to better its own business without regard to how that would impact users, isn’t entirely app developers’ collective fault. The notification platform itself had left the door wide open for that sort of psychological abuse to occur, simply because of its lack of user-configured, user-friendly controls.

Above: The App Store at launch, via The NYT

A decade after the App Store launched, Apple finally started to dial back on the free-for-all on user attention.

It announced its suite of digital wellness tools at WWDC 2018, which included Screen Time (a dashboard for tracking and limiting usage); increased parental controls; and finally a way to silence the barrage of notifications, without having to dig around in iOS Settings.

Now Tim Cook wants to have us believe that Apple had never wanted to cause any of this addiction and distraction — despite having created the very platform that made it all possible in the first place, which in turn, helped sell devices.

Isn’t it telling that the exec has had to silence his own iPhone using these new tools? Isn’t that something of an admission of culpability here?

“Every time you pick up your phone, it means you’re taking your eyes off whoever you’re dealing with are talking with, right?,” Cook continued. “And if you’re if you’re looking at your phone more than you’re looking at somebody else’s eyes, you’re doing the wrong thing,” he said.  “We want to educate people on what they’re doing. This thing will improve through time, just like everything else that we do. We’ll innovate there as we do in other areas.”

“But basically, we don’t want people using their phones all the time. This has never been an objective for us,” said Cook.

Except, of course, for those 10 years when it was.

Technology shrinks the world, makes geography less relevant. People find kinship, common cause, and community on the Internet, across nations and sometimes even languages. When the Internet began to erupt, when its connections began to draw such people closer together, this was anticipated with great hope and excitement. And with reason. At their best, the consequences are wonderful.

But it turns out that, like most major social transformations, this transcendence of geography has come with a slew of unexpected emergent properties, not all of them good. Indeed, some of which probably already need to be mitigated — fast.

It’s great that open-source communities can collaborate across the globe to craft tools which benefit everyone. It’s no bad thing that wealthy professionals in Singapore, San Francisco, Toronto, London, Dubai, and Hong Kong may feel they have more in common with one another than with people who live an hour’s drive away. One world, one humanity, one future. Right?

Except that around the globe, we increasingly see three worlds, sometimes intertwined and intersecting, but still apparently separating a little further every year: the ultra-rich, the rich, and the poor. The 1%, the 19%, and the 80%. The G20 are mostly looking more, not less, like the BRICS. Inequality has fallen between countries, which is good … while simultaneously rising within most countries, which is not.

As nations grow ever more alike, it gets easier for groups to forge common cause across nations. A virtuous cycle … except when it’s a vicious one. Except when bigots, xenophobes, and white supremacists join together. From Steve Bannon to Marine Le Pen to xenophobic Brexiters to the Five Star Movement, to the Kremlin, “white nationalism,” i.e. racist hatred, has been transformed — ironically — into an internationalist network.

But behind that loose-knit network of hate, i would argue, lies another, implicit rather than explicit; that of the ultra-rich, of the Koch brothers and Russian oligarchs and Brexit financiers. Don’t get me wrong. I’m not saying they’re actively collaborating. They aren’t sitting around sending one another Signal messages while stroking white cats.

But I am saying that the ultra-rich have long tried to maintain their positions by dividing the masses, via stoking hate against The Other. They have manipulated democracy in part by hacking its systems — regulatory capture at scale — but also by turning people against taxing oligarchs to give their (mounds of) excess money to the poor, by promoting the fear that this money will go to The Wrong Sort Of People Who Don’t Deserve It. By which is always tacitly meant: immigrants and visible minorities. Oligarchy implicitly monetizes racism.

So is it any real surprise if amoral American oligarchs look at Russia’s racist oligarchy and think, “Hey, those are my kind of people,” closely followed by, “Jeez, that kind of government seems pretty good to me”? To an oligarch, Russia isn’t an enemy of America; it’s a model, it’s what America should aspire to be.

None of this is all that new. The last time inequality was at these levels, aristocrats across Europe who had more in common with each other than with their own “common people” was something of a cliché. And obviously organized racism is as old as humanity, though its recent widespread resurgence across the developed world was a grim surprise.

What is new is how tightly our societies are bound together across nations by technology; how quickly new movements flare up, promulgate, evolve, and transform; and how nation-states and patriotism seem to mean noticeably less to modern progressives and modern conservatives alike with each passing year. These all bring both dangers and opportunities — depending on whether, and/or how fast, players accustomed to the existing world order notice that the rules of the game are changing.