Is the golden age of companies exploiting our data coming to an end, or is it just wishful thinking?
Data is the new oil. Some monetize it by selling or analyzing it to help businesses make informed choices and grow their revenues. It is also invaluable in fighting crime, such as fraud, driving innovation, and social change.
Some say that the golden age of companies exploiting our data for better or worse might be coming to an end as various regulations and laws recognize data as liability, and users’ concern about privacy, fueled by recent breaches, is only growing.
Some platforms already pay their users for personal data. However, they still are very small and require you to make an effort, for example, to register a cryptocurrency wallet, which means they might not be adopted en masse very soon.
The multi-billion data market
The value of the data economy of EU27 was almost €325 billion in 2019. The same estimate predicts that it will increase to over €550 billion by 2025. According to the United Nations report on data economy from 2019, the five largest world corporations - Apple, Amazon, Google, Facebook, and Microsoft - are all actors in the data economy. Large data firms typically employ fewer people, invest less in physical assets and generate less revenue. Yet, they are valued significantly higher compared to their traditional brick-and-mortar counterparts of similar size.
By now, we have somewhat acknowledged that nothing is for free. If you use, for example, a particular social network free of charge, your personal and sometimes very private information ends up being the product itself. Not only do free service providers share our data with third parties - sometimes they don’t do their best in protecting it, and our information resurfaces somewhere on the cybercriminals’ forum.
In the light of significant leaks, such as Twitch or T-Mobile, the concern about privacy is only growing. At the same time, users begin to acknowledge that, if disappearing from the grid is not an option for them, at least they could get paid for sharing their data with businesses of their choice.
Different surveys show that people are willing to exchange their data for something more than just a free service in return. According to the latest marketing technology firm’s Wyng survey, people willingly share their data for a personalized experience. Another intriguing report by an insurance company Breeze revealed that Americans are open to enterprises tracking their Fitbits, grocery receipts, and much more for cheaper insurance.
It seems that some have made their peace with personal information not being private anymore as long as they also get a little share in the multi-billion dollar data economy.
I will not speculate whether the big tech companies will be quick to embrace the shift in public opinion, especially when it’s not clear what part of the population is unhappy with companies trading our information and not protecting it enough and how many social media users stay utterly ignorant of the space.
But what I see is many start-up companies trying to reimagine how this XXI century oil is pumped and processed. I’ve already written about many of them - from TIKI, offering you money in exchange for your personal information, to ImagineBC - a platform where you can earn money just by watching ads.
Those start-ups recognize the need for a new business model, where a consumer can earn money and be in charge of their data. Another thing they have in common is the understanding that the more, the merrier concept regarding data is outdated. The more data a company collects, the more liabilities it has.
This time, I spoke to Kurt Nielsen, the co-founder of the Partisia Blockchain Foundation, which has received several grants from different European institutions to help develop privacy-based search and social media platforms, as well as the framework for fraud detection.
Imagine Facebook knows nothing about you
In 2021, Partisia Blockchain Foundation received a €120K grant (approximately US$145.7K) together with Scottish-based Better Internet Search (BIS) from the European Union-funded Next Generation Internet Trust (NGI Trust) to further develop a privacy-preserving alternative to the mainstream search engine.
“This Scottish team is building a new approach and new advertising model on search machines. They are building that service on top of Partisia Blockchain, which allows them to tap into all the privacy components to gradually evolve this service to do some of the same things without what is done today. So you could tailer the right advertisement to you, but the user is in the driver’s seat. You articulate with your preferences what type of advertisements, products, and services you are interested in, then you receive advertisements for those services or offers, but the platform knows nothing about this,” Nielsen said.
Partisia Blockchain has also partnered with Insights Network, a market research firm, to launch Instars, a decentralized and privacy-focused social media platform.
Basically, Partisia Blockchain, a Web 3.0 public blockchain, offers an end-to-end solution combining multiparty computation (MPC) and blockchain technology.
It's different from what you are used to in the IT system. Traditionally, you would define the perimeter and build firewalls around your data and limit access to the use of the data. Here, we are doing things quite the opposite way. We are encrypting the data itself, and then we have a system that allows you to compute the encrypted data,Nielsen explained.
According to him, large data pools stay encrypted, but you can access that data wherever and whenever you need.
"What is really happening: when you enter data into this private computation, it is cut into pieces and distributed among the nodes in the network, and then you just say you want to do some variants of the data, and that's the output of that computation," he said.
If, for example, Facebook was built that way, it would never know your data but still would be able to put you into different groups according to your preferences without actually knowing them.
MPC can also be beneficial in fraud detection. It allows banks to combine different likely fraudulent transactions without disclosing any information behind them and aggregate fraud patterns. Banks are restricted from sharing information between themselves because of the competition rules, and it aggravates fraud, which is usually done through many transactions in different banks.
Anyways, it seems that the technology for us to be in charge of our data while making it more secure at the same time is already here. Either you engage with something built on Partisia Blockchain, TIKI, ImagineBC, Permission.io, or any other privacy-focused platform there is.
But will we ever really be in charge of our data? Or will the fear of hanging alone on some very progressive platform while your less privacy-concerned friends keep interacting on Facebook curb that enthusiasm of ditching the mainstream social media?
Will we ever be in charge?
The thirst for data is growing. And it's not too crazy for you, as the owner of that data, to expect to get rewarded every time some company uses that information. But a hack-free data economy where everyone gives explicit consent each time someone wants to use their personal details and getting paid for that sounds a bit like a dystopia.
I asked experts to share their opinion on whether that shift in the data economy is feasible. Some are positive and believe that recent hacks and leaks are pushing towards this change. However, others are convinced that companies such as Facebook and Apple, firmly standing on the ground, will not budge easily as they desperately need users' information.
"For instance, as early as in 2016, Facebook supposedly generated US$62.23 per user in the United States and Canada from advertising. It is probably reasonable to argue that users' time for viewing advertisements should be compensated and, therefore, that part of Facebook's profits should be redistributed to consumers," Nir Kshetri, a professor at the University of North Carolina-Greensboro and a research fellow at Kobe University, told CyberNews via email.
And, as I've mentioned before, some media platforms already offer rewards in cryptocurrency for sharing data or viewing ads.
"Blockchain-based advertisement is based on the idea that consumers do not trust platforms such as Facebook to hold their data. Most consumers, however, do not necessarily value the trust that blockchain/decentralization can create compared to costs (if they have to pay to join) and experience (if these companies provide lousy experience). This is the reason behind the success of big platforms such as Facebook," Kshetri said.
Is a future where platforms like Facebook function only as an intermediary between consumers and advertisers utopian?
"If they merely act as an intermediary, then where would they make up their astounding revenues? If consumers demand it and opt-out en masse from platforms that don't provide them the rights (and payment), change can happen. But with so many users on these platforms, evidently content to keep things the way they are, it's tough to imagine what the watershed moment of change could actually be," Nate Tsang, founder and CEO at WallStreetZen told CyberNews.
And that is the view of many experts - the tech giants are so big and earn so much money already that they are not that eager to change. They are under constant pressure from human rights activists, the general public, and competition authorities worldwide for misinformation, data privacy, and many other things. Articles and videos on how to delete Facebook are also booming, yet you probably don't see many of your friends disappearing from the grid, do you?
If masses don't drive the change, regulators might. And many experts share the view that they should put a tighter grip on those tech giants monetizing our data.
"In the UK, the government is creating a new 'digital identity' framework. It affects organizations holding data for verification purposes at the moment, e.g., driving license. The new framework would mean these businesses would need to follow new, strict rules and standards in data handling. Organizations that pass the standard would receive a trust logo, reassuring users that their data is safe and won't be exploited through fraud, security risks, and breaches of privacy. While this affects only government and public organizations at the moment, the next phase could well be that companies, such as Facebook, holding a great amount of personal data, would have to comply too. The rise of the keyboard warrior means that identity verification for social platforms may become mandatory in the future, which means having a Facebook account could have the same validity as a driver's license," James Cash, founder of Superfast IT, told CyberNews.
Devin Schumacher, a digital marketing agency SERP founder, believes that media platforms shouldn't stop collecting data. Legislators should bolster the data privacy act and limit how companies can use and disseminate user data.
"Most security issues primarily stem from the lack of regulation, either way. As such, stricter federal and state guidelines on data use should mitigate the problems," he told CyberNews.
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