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Drone Technology Company Is in the Limelight Amid Data Security Concerns

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As worries over drone data take center stage, Red Cat Holdings' blockchain technology offers security and integrity of data.

Drone data security has become a hot issue. The Department of the Interior last fall grounded its 1,000-strong drone fleet and in January announced a permanent halt to the use of drones because of security fears over the use of data generated from equipment made or partially made in China.

Protection of data has become a major security issue and small-cap Red Cat Holdings Inc. (RCAT:OTCMKTS) has a solution using blockchain to protect data. In an interview with Commercial UAV News, Red Cat CEO Jeff Thompson said, "when a government, any government, has to go through the same process and usage model as a consumer, including giving your data to a company in another country, that's a huge concern for governments across the globe. It's a big deal. Red Cat is trying to do something very similar to what Apple has done with its own devices: it's your device, so it's your data and no one else should ever be able to see that data unless you want them to see it."

"There are a lot of companies globally who don't want their data to be tied to the manufacturer, regardless of origin," Thompson stated. "We need to cut that cord between the drone manufacturer and that data being collected and generated by the drone. Drones can do useful stuff for many governments across the globe, but that data has to be protected and secure and cannot be accessible to other governments who might use that data for bad things."

Red Cat has been addressing this issue, "trying to make it so that drone manufacturers, through their process, can enable Red Cat to put the drone owner/operator in control of their own data, and make it so it cannot be accessed unless that drone operator wants it to be accessed," Thompson said.

Blockchain is a distributed ledger, where data cannot be changed, so the data is trusted and is also secure because "you have to have the correct key to connect to that blockchain," Thompson explained.

"We are looking for ways to help manufacturers of flight controllers and CPUs have that capability to do all the encryption while it is flying so that the data is 100% safe and only accessible to the owner of that drone, regardless of the origin of the manufacturer," Thompson said. "If your drone, regardless of the manufacturer, falls out of the sky into a place you didn't want it to go, if someone finds that drone, that data is 100% useless to them."

In addition to Red Cat's blockchain platform, the firm is growing by acquiring Rotor Riot, which provides first person view drone content to drone hobbyists. "Combining our companies will further align our SaaS platform and data capabilities with cutting edge hardware available today and provide a solid foundation for us to develop and engineer new and exciting technologies," Thompson stated.

Technical analyst Clive Maund has been following Red Cat and wrote on January 9 on CliveMaund.com, "Red Cat is a leading company in the fast ascending drone sector, and its stock appears to be in position for lift off, which is why we are looking at it now, and the fact that it is off the radar of most investors should mean that it has even more upside potential, but once it gets moving it should create a considerable buzz of interest."

"Red Cat has developed sophisticated onboard black box data storage and analytics software that creates a data log of all flight info which is encrypted and therefore cannot fall into the wrong hands. To those with legitimate access, all data with respect to flight duration and tracking and of course imagery, is accessible," Maund explained.

As far as the company's stock is concerned, Maund wrote, "there are about 17 million shares in issue, of which only about 2 million shares are free trading, with the vast bulk of the shares being held by associates of the company. It is understood that the company will be looking to list on the NASDAQ which will obviously greatly raise its profile, and to this end it is likely to do a small funding, much of which is likely to be taken up by those close to the company."

"So this is a company that is almost completely unknown, but yet whose profile is set to be raised considerably, especially when it gets listed on the NASDAQ, and it is set to be very well positioned once the merger with Rotor Riot is complete and the new FAA legislation is introduced, which Red Cat will be in conformity with from the outset, without having to do anything," wrote Maund.

On February 3, Maund noted that Red Cat shares are "showing remarkable resilience, for on Friday [January 31] it rose 25% on a day when the Dow was down over 600 points, which is an indication that it will probably be little affected in the event of a general bear market and could perform very well anyway for its own reasons."

Red Cat technical chart

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Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Red Cat Holdings. Please click here for more information.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
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5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Red Cat Holdings, a company mentioned in this article.

Additional disclosures
Clive Maund does not own shares of Red Cat Holdings and neither he nor his company has a financial relationship with the company.




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