Should You Own and Profit from Your Data?
Data Matters
Hey friends. It’s time we sat down and talked about data. Unfortunately, you’ve been conditioned to not care about your data. But, why do tech companies care so much about it? Simple. It makes them billions! How much do you make from it? Zero? The free use of Instagram? Have you ever wondered why?
Data of a Different Sort
I’m suggesting a novel way to solve this dilemma. What if data was the property of the individuals that created it? I’m proposing a world where an individual’s data is rightfully theirs. A world properly valuing our data for the revenue it generates.
To get to such a world, we need to draw inspiration from simple economic property rights and abstract them to data. Property rights are the theoretical and legal ownership of property by individuals. In capitalist economies, private property rights are the foundation for economic, legal, and moral thinking. From constructing a fence around a plot of land to creating an idea and protecting it through a patent, our modern world has been built on the idea that we, as individuals, can own and exclude others from the benefits of our properties. And yet, these common rights aren’t being applied to an individual’s own data that they create. Instead, in true capitalistic form, our data is being exploited so corporations can carry $246 billion in cash on their balance sheet.
To change that, we have to think of all data created by an individual as their private property, not that of the corporation that collected it. This would mean that any amount of data that an individual human creates is theirs. This would mean that our Amazon shopping tendencies, Fitbit metrics, and Netflix viewing habits are all owned by us. This would also mean that Amazon, Fitbit, and Netflix couldn’t use that data to make decisions without our permission. It would be a fundamental change in the way our digital economy works.
Individual Data Income
Interestingly, in an economy where the individual owns all the rights to their data, they also own the rights to sell that data.
Imagine if individuals were paid by others, such as corporations, for use of their personal data! The collection, organization, analysis, and decisions made from individuals’ data could create income for those individuals. This would be the basis of Individual Data Income.
In practice, a company such as Google would have to pay us for the rights to hold and sell our search history to advertisers. Instagram couldn’t give us targeted ads without first paying us for the data that allows them to know that we would respond to such an ad. Tesla couldn’t use our driving habits to teach its autonomous driving software without first paying us.
A natural question that arises would be how would the companies make any money? In theory, there should be a true market value for all of this data that still allows companies to profit, just less so. The problem has been that the current value of our data is so out of balance with the true economic value of our data that it has allowed tech companies to profit immensely. They also like to lose it and manipulate us with it. Corporations are getting limitless amounts of data which they use to elicit responses and extract money from us. In return, we get to use their app, website, or gadget for “free” i.e. with advertisements.
Fractional Reserve Data
Of course, data isn’t only being used one time by a company to make a decision and then discarded. Data is continually sliced and built upon by companies to design ever more complex algorithms and systems. One point of data could be used millions of times by thousands of entities. Luckily, the banking and finance industry has already created a mechanism we could lift to account for this usage.
Fractional reserve data is the idea that a single point of data from an individual will have subsequent value beyond the original use of that data for a corporation. This is an important concept to address because the data created by an individual is far less than the data created about the individual.
So, like in fractional reserve banking where a bank only needs to hold $1 to lend out $10, fractional reserve data allows one data point to be used a multiple of times beyond the origination while still being able to obtain an economically correct return. In this analogy, the individual is the bank setting its rates, the data is money, and the corporations are the ones taking out “loans” on your data.
But how?
Socially and legally, it’s obvious we would have to have a complete revolution for this to happen. Something akin to the labor rights movement in the 1800s and 1900s. Technically, a solution is already being built for us.
Ethereum is a public blockchain-based distributed computing platform featuring smart contracts that can execute autonomously. Think Bitcoin but actually useful beyond a store of value. Ethereum is being hailed as web 3.0. It is also a leading platform to base the Internet of Things on which is going to be a growing percentage of individual data creation moving forward.
With our data on the Ethereum blockchain, we could have full control of who has access to use it. Ethereum makes it theoretically possible for us to have Individual Data Income and Fractional Reserve Data by utilizing smart contracts to autonomously execute transactions based on how our data is being used by companies. If a company wanted our data, they would simply have to abide by the rules of our smart contract(s) to use it. As our data is being used, our income would autonomously be collected based on the rates set in the smart contract(s). A seamless process from data creation to income deposit makes this easier than what a first glance might tell.
Final Thoughts
Would this ever happen? It’s possible. But, this wasn’t written to convince anyone that it would be fully deployed. This article was written with the intention of uniquely solving a looming political issue in the coming decades through new ideas and new technologies. It was written to expand the thoughts of anyone concerned about data rights and make them question the current constructs of our digital lives. Thoughts and criticisms encouraged.
-Kyle Tut
