Blockchain technology is to give users their personal data back
No doubt that in digital era of globalization and rapid development of shared economy data is the most valuable asset. It fuels search engines and digital advertising, data-driven transactions and AI-based startups. The more gadgets we have, the more our personal data is collected. Companies are trying to get to know us better to sell more goods and services. According to ‘The Economist’, in the 21st century, data will play the same role as oil in the 20th. In other words, it is becoming the main factor of development and change. According to IDS estimates, global big data market in 2017 will bring $ 150.8 billion, and in 2020 — $ 203 billion, excluding revenues from targeted advertising. On artificial intelligence market the main competitive advantage is the data itself, and unlike software, corporations do not rush to share it.
Both big and personal data are still in the hands of large private organizations that are engaged in personal data monetization. Facebook here is leading the way with 1.9 billion profiles, then Google with 2+ billion profiles, and finally Apple with 1+ billion iOS users. If we look at Credit Reporting Agencies, Experian is the major stakeholder in credit histories accumulating credit data on 918 million Americans. A notorious Equifax data breach case looks like a conspiracy theory: after exposing user personal data to hackers, they are now offering to protect it for a certain fee. Did they intentionally give away the data to get a new revenue source?
Speaking of revenues: Twitter earned about $ 548 million over the last quarter. Major digital transactions of the last couple of years involved corporations buying startups just to get their user database: Facebook and Instagram, Microsoft and LinkedIn, and so on. According to Nick Srnicek, a British political scientist and an expert in digital economy, modern companies build their business on user data and do not produce anything in the traditional sense. Google, Facebook, Amazon and Uber operate as platforms solely: all they do is connecting users with advertisers and developers, drivers with passengers, buyers with sellers. Platforms attract the maximum number of users and encourage others to register for services as well, because they are “used by everyone”.
So why are these corporate whales are paying billions of dollars for basically the air? When you surf the internet or use social networks you give away details of your personal preferences by means of “likes” and “dislikes”. This data can be used to show you targeted advertising that you are more likely to click on — so companies can make money from gathering details about you and using them to sell advertising. Companies can also profit from selling such information as your email address, name and telephone number. However, until now us — the people generating all this data — had very few ways to personally profit from it. These days we spend more time on our electronic devices than we do sleeping. And all this time we are creating data that could be earning us money. As estimated by researches, on average, each person generates around $2,000 worth of personal data every year. If monetised, that would pay for a new, high-end laptop every year. But how much does our data cost? Back in 2013 an American student Federico Zannier sold his data at Kickstarter. During 50 days he recorded all his actions on the Internet surfing the websites, taking screenshots of viewed pages, correspondence with friends, application logs, mouse movements and navigation history. The price of Federico’s digital archive amounted to $ 250. Same year ‘The Financial Times’ published a calculator to estimate the cost of personal data. Prices may have become obsolete, but this tool clearly shows what information makes you the most attractive object for advertisers.
If you haven’t been concerned by the fact that your personal data is owned by somebody else, it’s high time to start worrying. The data is owned and controlled by the platforms that collect it and therefore may be copied and sold many times. The majority of people don’t really understand how their data will be used. People sign user agreements made for the benefit of business and allow data transfer to a third party without even reading them. This carries an extremely dangerous leak threat that can harm user in multiple ways.
And in the longer run, our data might as well testify against us. Not only should we be concerned by potential risks, but also ask why is our data used by everyone except ourselves?
Now imagine for a second that your personal data is in your own hands. What if we could own and sell our data directly? Society is undergoing a shift from national command and control to community collaboration. And the next big organic technological shift is on to the world where every individual can manage and monetise their personal data. Younger consumers are no longer concerned about preserving their privacy: what they really care about is who should profit from their data. So basically the concept here is creating a decentralized ecosystem aimed at expanding humans rights in the domain of personal data use. By virtue of rapid deployment of blockchain-based technologies, the creation of a decentralized platform for data storage is now able to define completely new standards for the existing industry. During the course of this year, we’ve witnessed first attempts to launch a number of PDEs. It looks like the team behind Gembex is aspiring to provide exceptional opportunities for their token holders by turning existing centralized structures into a human-centered system that will protect people from unethical or illegal private data collection and disclosure to the third parties. For the first time, user confidentiality and data exchange will be protected by cryptography. Just like the Bitcoin created a currency without a regulator that cannot be forged. Gembex is a decentralized data storage that eliminates the need to engage a trusted third party (like Equifax) or provide autonomous control over personal data. It is also an equal competitive marketplace for financial, insurance and banking institutions that allows users to monetize their personal data. The platform is specifically focused on disrupting conventional financial market by introducing the framework for a decentralized credit bureau with the set of features to facilitate direct access to financial and insurance services to consumers who lack credit history. A blockchain solution for credit bureaus addresses some key issues of the current system: impossibility to use credit history abroad, absence of control over personal data, negligence of conventional credit bureaus.
It’s too early to know what a new ecosystem of decentralized data storages will evolve into in the future, but we can be sure that it is the only solution to fairly distribute user data creating an equal marketplace for financial and many other services.