Blockchain is Turning Personal Data into the World’s Most Valuable Currency

IT ProOctober 16, 2018

Data is a precious asset, creating potential to enrich the customer experience in the IoT era. Learn how IT Pro says enterprises can leverage blockchain technology to explore strategic opportunities—while maintaining their customers’ trust.

The modern business-consumer relationship is built on the principle of information exchange. But what if individuals could take complete control of their own data and even sell this directly to businesses in exchange for products or services?

Could we all have cryptocurrency wallets on our phones that track the data we have sold and how much we have earned from it?

In this brave new world of democratized data, control is now shifting away from the data behemoths of old, with GDPR handing far greater powers over to data subjects.

What’s more, the public is becoming acutely aware of how their personal data is being used and, with data breaches now becoming a familiar part of the daily news cycle, we’re now seeing those new powers being executed.

The idea of taking more control over personal data has not only been driven by regulatory change, but also by online initiatives. The Decode project, a consortium of 14 organizations across the European Union, is one of those working to attempt to create what it describes as “practical alternatives to how we use the internet today”.

“Consider that the licenses of major social networks are such that they can reuse and license individuals’ content with little restriction, even after a user leaves their network,” the project states. “The proprietary nature of the platforms makes it hard for users to leave and take their data with them or find ways to deploy it for themselves.”

Knowledge is power

The changing data economy will see new relationships develop between businesses and their customers. According to FileCatalyst, 1.3 exabytes (or 1.3 million TBs) of new data is generated every day. How this mass of information is exchanged, stored, manipulated and monetized will radically alter, as consumers take back more control of the data they generate.

Research by the Direct Marketing Association (DMA) revealed an important shift in consumer attitudes is underway, with more than half (51%) of the respondents to a recent survey viewing data as essential to the smooth running of the modern economy, up sharply from 38% in 2012.

Chris Combemale, group CEO of DMA, said at the time that the figures highlighted “a continued growth in the awareness and understanding of the UK public towards the role and value of data exchange in modern societies.”

“Consumer trust is central to data exchange, both to the business looking to prosper, and the customer looking to benefit,” he added. “Businesses must do everything in their power to retain it by putting their customers first.”

Data has become one of the most precious assets a business or individual now possesses. As new data-collection points are created, such as wearable technologies, our cars, the burgeoning IoT (Internet of Things), or the increased use of APIs, these streams of information will form the core of the relationship between their creators and collectors.

Having more control over all this extra data then becomes the foundation on which consumers can build their own “data currency.” What’s missing at the moment is a way to enable this control on a practical level.

Enter the blockchain

In 2015, the UK government’s then-chief scientific adviser, Sir Mark Walport, said in a report: “For the consumer … the technology [blockchain] offers the potential, according to the circumstances, for individual consumers to control access to personal records and to know who has accessed them.”

For many, this is exactly the sort of technology that enables what “Web 3.0” promises to bring: an environment where data is democratized, where strong data encryption and secure decentralized networks enable everyone to access goods and services without being surveilled.

In this world, the data middlemen of today are replaced with blockchain-based networks that deliver complete control to the individual — the user gives permission for companies to access his or her data temporarily for the purpose of powering a service. There will be no third-party companies making money off data transfers or storage, nor will there be government departments holding the keys to that information.

From today’s perspective, this may seem a utopian view, but the idea of data’s being something that subjects can market as a commodity is already playing out.

“Individuals are already taking more control of their personal data and even selling this directly to businesses that want it,” says Jay Gomez, senior associate at law firm Triay & Triay.

He suggests that the rise of blockchain has made the idea of “data marketplaces” a reality.

“We are currently working with clients developing blockchain-based, decentralized data marketplaces that provide individuals with a way to securely and anonymously sell validated private information within a trustless environment.”

Value exchange

However, not everyone agrees that we should be thinking of our data as something to be sold to the highest bidder. Some have argued that the focus should shift back toward early ideas of exchanging data for a service.

“[Currently] there is a focus on individuals selling data — largely driven by the argument that Facebook and others are making money with our data, and hence so should we,” says Julian Ranger, founder of digi.me.

“However, we shouldn’t see this as simply selling data — it is a ‘value exchange’ where value may be service, convenience or reward. For example, sharing my health data with an app that helps me manage my diabetes, say, isn’t about selling data — the value is in keeping me healthy. Yes, there will be some sale of data, but the far greater exchange will be about service and convenience.”

It’s important to remember that this is all predicated on the assumption that technologies like blockchain are actually able to bring some kind of control back to data owners. Whether that’s possible remains to be seen.

What we do know is that establishing who controls personal data will increasingly become a major component of the business-customer relationship, which until now has been weighted too much in favor of the data gathers.

Caroline Bellamy the first chief data officer to be appointed by Ordnance Survey, said in a recent interview: “I do not want to see Google running the country — but that doesn’t mean I do not want to take advantage of the innovation they can bring.

“Let’s be a good customer — the more you give, the more you get back. When you try and keep everything secret, you play a high-stakes game. But, when you collaborate, you reap the rewards. The question is: What are the outcomes that we want? And what do we want from them — not what do they want to sell us.”

This article was written by David Howell from IT Pro and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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