Individuals should get their part in the economy of personal data
Blockchain and other distributed technologies combined with stricter data protection regulations (e.g. GDPR in the EU) are creating a disruptive momentum in the ecosystem related to commercial exploitation of personal data. Personal data is becoming an asset and we believe that on this basis a whole new economy will evolve, creating business models and value creation transactions similar to we know from traditional assets. Personal data assets and its derivatives will be created, valued, stored, enriched, combined, transmitted, destroyed or traded. Furthermore, we believe that the whole ecosystem will develop around three key entities — data owners, data users and service providers.
The three primary entities in the personal data ecosystem
In the spirit of the new understanding of the personal data economy and centrism of the individual there within, we understand data owners as individuals (GDPR calls us data subjects), primarily consumers who provide the raw material — the data about them — to companies and other organisations. Not only that access to data should be fully in the control of data owners, we also advocate that data owners are entitled to receive a legitimate reward for their data that is commercially exploited.
Data users are primarily commercial companies that use data collected about us to try to create and offer better products and services to us consumers. Or, data users are companies that acquire and enrich the data to resell it to other data users. Whichever way, data users should in our view reward consumers for the data they receive and commercially exploit while fully complying with data protection legislation and the agreed purpose of use.
The third entity, the service providers are the numerous companies offering services to both the data owners and data users with a focus on personal data management, e.g. wallet, storage, marketplace, analytics, research, quality, valuation, … In order to offer these services they are mostly dependent on an appropriate access to the data that the data users hold and the data owners control.
The question arises of whether the demand from data owners for control and reward for use of their data inhibits the value chain between the three entities and prevents the implementation of valuable business models. Technological, legal and organisational requirements for corporations to handle personal data are increasingly complex and costly — even for bilateral transactions between data users and data owners directly. Set up of highly dynamic, on-demand, cross-border transactions of usage rights, data and payments involving multiple parties thus seem to be nearly impossible or at least economically utterly unviable.
Blockchain technologies as the enabler of a new personal data economy
We suggest that such a setup can in fact be achieved by utilising blockchain and other distributed technologies and which will even be profitable for all three of the entities. Datafund’s goal is exactly to develop a protocol and technological solutions to optimise the transactional flow between the three entities, respecting the aforementioned demands.
We use blockchain technologies to implement an economically viable solution to the challenge of a comprehensive control on how each piece of personal data, combined with the consent for its use, is being used and transacted between multiple parties, independent of the actual location of data storage. And, we will use blockchain to implement an effective rewarding system for use of data or related services, based on real market value. Personal data management solutions where individuals directly control the storage and access to their data by a private key will be a complementary offering.
To sum up — how can the three entities profit from the proposed setup?
- Individuals, primarily consumers will get control over the use of their data and receive rewards for it. They will use simple apps combined with a token wallet and optional personal data storage.
- Data users will know their customers better, since they — once in control of data use and receiving a fair share of its monetisation — will be prepared to share more about themselves with trusted organisations. They will validate the data to share and identify themselves with an appropriate identity. It’s fair to assume that by removing the guesswork the cost of information to companies will decrease, even considering rewards for consumers.
- Service providers will be able to participate in the value creation chain to the fullest possible extent by applying dynamic transmission of rights and controlled access to protected data offered by the Datafund protocol, resulting in more efficient transactions, lower costs and higher added value for both the consumers and the merchants. These companies are stepping into a completely new field of commercial services. And the first ones have the chance to occupy the most interesting niches of the market.
Datafund is a movement to co-create the next level of the personal data economy based on responsibility and fairness. It’s a project in which we want to include individuals, companies, public institutions and nonprofits to form the new ecosystem of personal data transactions. We expect that early contributors will especially benefit from participation.
