As a point of disclosure, Theo Valich is my former publisher (and boss!) at then-Taiwan-based VR World, and during the time we parted ways, he seems to have taken interest in both the hardware- and software-based aspects of blockchain tech.
“On average, each person generates approximately 0.77 GB of data every single day,” says Theo Valich, head of growth at Hong Kong-based blockchain startup Datum. In an interesting conversation centering on the importance of privacy and securing one’s personal data, he narrates how his company started its ideals from the concept of universal basic income.
“During the Swiss referendum on basic income plan in 2016, the company’s founders discussed how taking control of one’s own data could potentially address the question of compensating work that is unpaid and unquantified.” As history would have it, the Swiss voted against universal basic income. However, around the world, some jurisdictions have some form of basic income or subsidy for their citizens.
The main argument against universal basic income centers on the libertarian view that a person’s compensation should be fair relative to his or her value or contribution to a profitable enterprise. However, as evident in how much society values data today, every one of us generates value in the form of personal data. Unfortunately, we usually give away the rights to this data or the value thereof, in exchange for free services.
“This is the ‘digital you’” says Valich. “Unfortunately, you do not own it. By using ‘free’ services like social networking sites, email, and the like, we are signing away our rights to data, and these companies, in exchange, sell our user data to advertisers for the right price.”
By 2020, the economic value of user data will be worth around 330 billion Euro. Valich says that on average, a person generates around US$2,000 worth of data per year. “The problem before was that it was difficult for individuals to quantify just how much data they are sharing and how valuable this is,” he says.
A marketplace for data
While it certainly is possible for users to sell their own data for the right price, there is currently no viable marketplace where we all could. This is where Datum plays a part. The company, based in Hong Kong, is a blockchain-based marketplace where data-generators and data-consumers can directly transact in a private and secure fashion.
In the company’s whitepaper, it aims to democratize access to data, such that this is not limited to big companies with the resources and wherewithal to utilize such content, like Facebook, Google, et al. It seeks a “future where data is first and foremost owned by their creator (e.g. an individual posting an image) and where the creator can choose to share, monetize or destroy this data based on their own purview.”
Through the blockchain Datum’s network “aims to provide entities such as researchers, companies or individuals the most efficient and frictionless access to data while respecting the data owner’s terms and conditions.”
Such respect toward the data owner’s terms and conditions means that the data can be shared or sold to a business that needs it, but not without the owner having some say over how it is used. More important, a user can be compensated for sharing his or her content.
This can be advantageous to both users and businesses. “Theoretically, we can have 7 billion plus people as sources of data, through individuals and smartphones across the globe, and even companies that do not have the size or resources like Facebook, Google, or Apple, can directly leverage on this data directly from the users who produce it,” Valich shares.
Where does all this fall into place in light of universal basic income, then?
“The human being is the next Facebook, Instagram, etc.,” says Valich. “All the data generated on these platforms are money not captured by consumers. It is time to find a business model for all the value you provide to these services.”
This means that rather than earning from the data you generate every day – your browsing habits, preferences, location, relationships, social conversations, images, videos, songs you listen to, and more – the social platforms are the ones that get most of the benefits.
With Datum, users can, for example, share their data directly to companies or researchers who need it and then get compensation in the form of tokens or cryptocurrency.
This goes beyond personal data, however. According to Valich, the internet-of-things, or IoT, also presents a big opportunity in terms of data utilization and exchange.
Valich cites a client that hosts GPS sensors atop telecommunication towers. These communicate their exact position through Datum, and real-time or low-latency analysis can then predict upcoming earthquakes. “If there is any abnormal movement, then we can know that an earthquake is coming,” he says.
In this regard, the use of blockchain technology, with its secure and immutable characteristics, helps in ensuring the integrity of data. “Our client was trying to build upon an AI platform that can analyze these data sequences with the least latency, and when they considered our distributed system, they considered it to be the best way that such data analysis could be done – all in a fraction of a second.”
Another client has created a smart bottle, which keeps track of the amount of water that its customers consume. Users who are willing to share that data can get some form of compensation in return for sharing their data.
Yet another client is involved in sports shoe manufacturing. Imagine the kind of location and activity data users can share from this.
Similar data-oriented applications can also be applied to other industries, such as smart grids, smart nation initiatives, automotive, traffic management, and more.
Valich says the IoT model is actually broken, without someone or something supporting the exchange between producers and consumers of data, and here is where Datum can also play a big part.
I asked how all this can be supported by the blockchain’s infrastructure, and Valich replies that the network compensates nodes for the distributed storage, bandwidth and processing power through tokens. This is one reason behind the company’s planned initial token offering or ITO, scheduled by mid-October.
“We are a service company, and these tokens are meant to be used through time – it is actually the premium for the space and resources used by each node in the blockchain,” says Valich.
Going back to the question about universal basic income, from an economist’s point of view, it is certainly beneficial as a “negative income tax,” as Milton Friedman frames it. But given the discomfort about essentially providing resources for free, perhaps the next best step is to enable people to monetize something that we are producing all along – our data.
Just don’t give big brother an opportunity to misuse this data, though.
Featured Image Credit: 123RF