Privacy is at the center of most data discussions today. The General Data Protection Regulation (GDPR) is set to go into effect in the EU at the end of May, which is a key first step toward ensuring end-user privacy and transparency in data collection processes. However, there is more that can — and should — be done to champion users’ rights, in addition to embracing a GDPR-compliant framework. With new technologies, there’s a new solution possible to alleviate privacy concerns, and that is to create an economy based on data.
Data is a major asset to companies and society as a whole, with the power to drive business and also have a positive impact on the community. Given the importance of data to our ecosystem, it’s paramount that individuals who elect to share their data be able to do so securely. Professor Alex “Sandy” Pentland, the Toshiba Professor of Media Arts and Sciences at MIT, offers a solution to achieve this safe data environment, in the form of a set of rules he’s coined “The New Deal on Data.” His idea is to redistribute the ownership of data in favor of the individuals whose data is collected. This way, end users not only have agency over their own data but can also derive value from it.
In order to achieve this paradigm, data must be treated as an asset and regulated as such. In an interview with Harvard Business Review, Sandy Pentland posits, “People say personal data is the new oil of the internet. What they mean is that it’s a new asset class, a new value, a new money. And we don’t have the regulations to treat it like the value class it is. We need data banks. We need data auditing.” As with any currency in our society, data must be regulated. Without regulation, data disasters can occur and cause end users to revolt, provoking regulators to outlaw data collection altogether — which would be a major setback for innovation.
Here at Cuebiq, we embrace Pentland’s vision and think it would enable the data-driven ecosystem to provide economic value not just for data companies and their clients, but also for end users. All parties involved must derive value from the data-driven ecosystem in order for it to grow and prosper.
But how can we realize a system that both regulates data collection and creates value for end users? The answer is through new technology such as blockchain, which has the capacity to create an open data marketplace. Since blockchain technology functions in a decentralized manner, transactions no longer require intermediaries, so users can make their own choices and retain control of their data. Through smart contracts, which automatically enforce the conditions of an agreement, users can be sure all transactions are credible. Blockchain also offers absolute security, using cryptography to record transactions chronologically and publicly, creating a completely transparent ledger. In this way, end users can see who is leveraging their data and to what end.
Now for the value creation piece. Blockchain technology also has the ability to create cryptocurrencies, such as Bitcoin. It’s possible for end users to benefit from sharing their data by receiving cryptocurrency in exchange. Thus, end users — the true data owners — can license the IP of their own data. This vision is a next-generation economic model that effectively incentivizes all parties in the data-driven ecosystem, ensuring that everyone both adds and derives value.
When users benefit from sharing their data in a safe way, a chain reaction occurs. More users will share their data, which will create a better quality big-data ecosystem, thus improving AI developments, and ultimately leading to major advances for society as a whole. For example, let’s consider the healthcare industry. If users were guaranteed privacy and some kind of benefit for sharing their data, more users would share data, creating a massive pool of health related data, which could expedite health care developments such as discovering new drugs, and ultimately save lives. This positive feedback loop applies not only to health care but to pretty much any industry.
An open data marketplace would benefit data companies, publishers and end users alike. Not only would it provide a solution to the recent privacy issues surrounding transparency and IP asset security, but it would create much-needed value for the end user.