Transforming the ecosystem of personal data
Based on the previous article let’s go a step further and see how the transformation of personal data into tradeable assets can change the relevant ecosystem.
Today the personal data economy is basically a B2B business. Companies are collecting data about us without our really knowing what is being done with it and without sharing its real market value with us. They are using this data to guess which services and products we might need, or they monetize the data by selling it to other companies. How can we as individuals become an equal partner in these transactions of value and get our privacy under control?
Furthermore, even if companies are greedily collecting data about us, they still have trouble guessing what we would really like to buy in the end. Challenges lie principally in patchy data and ambiguous customer identification. So, despite the huge trend toward big data and advanced analytics that companies think they need to follow, many times it appears that this results in merely a high-cost, low-value exercise. How can we help companies we trust to change it into a low-cost, high-value exercise and share the profits with us?
The individual as the centre of the personal data ecosystem
We believe that there are two key steps to efficiently meeting these challenges and respecting the interests of individuals to the greatest possible extent.
First, we have to move the individual into the center of the personal data related ecosystem and give him back control over who is collecting and using data about him, how it is used and for what purpose. Market players have to give the individual his fair share of the monetization of his data. Personal data with the individual’s consent to use it for defined purposes represents the new asset class.
Secondly, we have to create a protocol with which market players will be able to collect, enrich, share and monetize the new asset class in an efficient and controlled way — always respecting the agreement with the individual and protecting his data. We see as well that in the future a vast amount of personal data will move to personal storage management systems where the individual has complete ownership and control over his data and the data is accessed by other parties only via permitted individual queries. However, a certain amount of personal data will remain in the storage systems of private and public organizations. The protocol should handle both cases.
The following diagram shows a simplified example of such an ecosystem.
Let’s go quickly through the list of some typical actors.
The parties in the ecosystem
The individual is in the center. He controls access to his personal data with two essential instruments. The first is through the legally regulated consent to an organization to use his personal data for a specific purpose (see also the new EU regulation GDPR). The second one goes a step further by using secure personal storage for his data. In this case, an individual’s personal data is no longer held by others, but it is rather the individual himself who technically fully owns and controls the storage. The latter will be an important evolution in the period to come. In both cases, the individual will need important tools, such as data and token wallets or personal data collection and analysis tools.
Merchants are the key data users. They need data to understand what we as consumers want and, consequently, to use better information to inform us of their offerings. The data also enables them to design their products and services more effectively. Merchants will need services to implement their corporate wallets, as well as to integrate into the protocol, marketplaces and with various service providers.
There will be multiple data markets created around the protocol — we envision that they will typically evolve around specific regions and verticals. Data markets will have the function to connect data owners, data users and service providers with specific interests to value, exchange and monetize data in a controlled and efficient way. Data markets providers will implement the marketplace protocol and bring companies and consumers to the market.
Blockchain oracles are entities not known in traditional data ecosystems. These systems assess external events and, accordingly, automatically interact with smart contracts on the blockchain. We expect that in the future many marketplace transactions will be based on these systems. The development and provision of these services represent quite an interesting commercial opportunity.
A multitude of other new services is going to be created and operated in the new personal data ecosystem. Respective service providers will — just to list a few — offer market-specific services such as: data research, rating and assessing the reputation of market participants, data driven services, payments, token-fiat exchanges, personal and corporate wallets, personal storage or integration, business consulting and legal services.
In addition to commercial purposes we understand that personal data is useful for many non-commercial purposes as well; think of communities, nonprofits organizations or municipalities which can offer better services to individuals based on validated and comprehensive data. Again, the individual should be able to fully control the access and use of his data in these cases as well.
We believe that a non-profit foundation should be in charge of the development of the protocol and helping to create this ecosystem. In fact, a primary goal of Datafund is to establish a foundation to which the stewardship of the protocol and its first implementation will be transferred.
We see that this transition has started. Enabling technology, growing privacy awareness and stricter regulation will be the drivers to reshape the ecosystem of personal data economics. Not only will the interests of the individual be respected, but new commercial opportunities will open up in ways that today are not yet fully conceivable. We at Datafund believe that the evolution of this cross-border ecosystem will have a profound impact on society as a whole and we are excited to be a driving force in this movement. And, we invite you to participate as interested individuals or companies to join us in reshaping the future of the personal data ecosystem.
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