Data sharing, giving you your data back through blockchain:
The concept of data sharing is considered to be another brainchild of the blockchain technology. This disruptive and revolutionary tool is finally picking up the momentum it deserves in the recent years due to the increasing awareness and sensitivity of the public opinion concerning internet user data (cookies, etc.) and the value it has in the entire ecosystem of online marketing. This sensitivity was particularly heightened after the infamous facebook’s data tampering scandal during the American Presidential Elections. Through this article, we shall try to explain the dynamics of data-sharing and how some of the start-ups are utilizing it to stand up against some market moguls.
But before that happens, how is my data being used?
Going back to a less informed time around 8-10 years ago, where the newly rising data Industry was taking its place bit by bit as the new most valuable resource of the internet. The common business model that advertisement companies make along with the various websites and social media platforms would be to collect user data that would range from geography, age, gender, navigational data -you name it-. Of course, at that point, the user is, to a large degree, a product in the shape of a data point. Those data points are then sold to ad companies so that they use it to make more targeted, customized and therefore efficient ads to the end user -which in this case, the user comes back to being a customer, only for the cycle to begin again-. Naturally, this model is flawed with ethical dilemmas that are not too hard to figure out. More often than not, people would find themselves forced to give up all privacy of their data in order to be able to use them, sometimes indispensable, services provided by the companies that sell data, which was the clearest sign of the oligopoly of the online data industry. Moreover, some of the marketing techniques used have always been a subject of debate ranging from straight out illegal manipulative techniques to some more illicit ones (that I am sure everyone is, unfortunately, familiar with).
So how will Data Sharing fix this mess?
Sadly, ethics were not the only shortcoming of this model. Financially, it was very lucrative for the companies that would sell the data. Especially since these companies do not technically own the data, but rather just impose on the users to allow them the liberty of using them. What is ironically surprising, the data belongs to * drum roll* the user him/herself. Essentially, not only the companies get to sell something they do not own, but also the one who actually owns them gets no financial gain from them whatsoever.
Introducing data sharing. This idea consists of radically reimagining online marketing in general by making the user a consenting and remunerated stakeholder in the entire process evolving his/her data. The first question that might pop into one’s head as it sure popped into mine is; well, according to this definition, it does not absolutely need to be harbored by blockchain, right? And the answer to that would be, you’re absolutely right. However, many start-ups that are leading this relatively newly found market such as BitClave and BitComo use blockchain –apart from the technological robustness and convenience it offers- because it counters the centralized ecosystem they were created to overcome.
The way Blockchain-based data sharing platforms function is more enhanced and efficient than the current, and seemingly outdated, model. Taking the example of BitClave, BitClave created a search engine, which links the user directly to the businesses. In practicality, when a user makes a certain search through the BitClave search engine, the integrated bot then connects you directly to the corresponding business with the relevant offers. This is where the ingenious simplicity and efficiency of data sharing kicks in. From the business’ side, the cost of online advertising would plummet -since there will be no need for a third party between the user and the business- all while making their ads more targeted which will inevitably grant a higher response and purchase rate. Since this method grants companies more bang for their buck, it will naturally encourage them to become more attractive whether through user remuneration (for the data that s/he willingly gave to receive relevant ads) or through incentives such as discounts. As per the user’s side, s/he will get to regain complete control over your data make better use of it for all parties financially and ethically. In the specific case of BitClave. In addition, the user has the option to gain CAT tokens with every search and/or purchase made via the search engine. BitClave, of course, gets minimal commissions for every transaction taking place.
This sounds great! So why has it not taken over yet?
Good question. To answer that, we must, funny enough, go back to the bible. Companies like BitClave are the David of the advertising industry whereas industry moguls such as Google, Amazon and the like are – big surprise- the Goliath of the industry. And if for some bizarre reason you are still skeptic as to how prevalent Goliath is; out of this 550 Billion Dollar industry, Google alone has 15% of it. This ought to put things in perspective. But, in my personal opinion, I’m afraid this is a bit worse than a mere underdog story. When you are a dominant company with a net worth the size of the GDP of countries – and this applies, sadly, to most industries, from online marketing to Energy- who has instilled years or decades of market knowledge and control, you are no longer just a party in it; you are a vessel of it. Which entails naturally that whenever you perceive a potential threat – and it’s already hard enough to even be considered one- you will implement every tool you have- which are quite a lot- to either eliminate or absorb it. We’ve seen it happen time and time again, but only time will tell whether or not this battle will have a biblical or an apocalyptic end.
For the upcoming review coverage of the “Berlin Blockshow”, stay tuned as we shed more light on some of the new and exciting initiatives that are based on data sharing among other blockchain related startups that took place in this event.