How Web3 Can Transform Personal Data Ownership
And why Web2 businesses should take advantage of it.
Will 2022 be the year when consumers can finally own and monetize their personal data?
What is Personal Data Brokerage?
What exactly does it mean for you to own your data, and what does it mean for businesses to own your data? A data broker is any corporation that leverages and sells your information to other organizations. If you own an iPhone, you may have noticed that every time you open a newly downloaded app, you will be prompted with a pop-up to either “Ask App Not to Track” or “Allow the app to track your activity across other companies’ apps and websites.” Users who tick the “allow” option will then consent to the app to monetize the data they collect from your personal activity, like search history, screentime, etc. In one example scenario, Google may have noticed that Person A has been searching for desktop monitors, so they broker this data to its clients. The next time you visit a client’s site, you can be sure to expect numerous advertisements for monitors.
The Current Personal Data Brokerage Landscape
It is without a doubt that personal data is valuable. Businesses thrive on knowing what their consumers want. In fact, in 2019, the data brokerage market was valued at $232.634 billion USD globally. However, when it came to tapping into this data mine, it became increasingly difficult and complex for businesses. The challenge for them resided in producing tangible value with the data that they acquired whilst upholding privacy laws like the General Data Protection Regulation (GDPR) and Health Insurance Portability and Accountability Act (HIPAA). While modern companies usually bypass these regulations by asking their customers to give up the rights to their personal data, it quickly becomes inefficient as it creates elements of uncertainty. Users would not be able to know where their data goes, and it requires complete trust from the consumer end. Further, it removes the ability for businesses to give their clients the option to monetize their personal data, taking away from the overall user experience.
Dharmesh Shah, Co-Founder of HubSpot, said on the 20VC podcast that “the way buyers and sellers connect is fundamentally broken because they don’t own their data.”
Although the current system may be flawed, the future of data ownership does not have to continue this way.
Web3 Makes Owning Data Easy
Fast forward to the present day: the influx of innovations in Web3 has created significant changes in the data privacy & ownership space. In a recent webinar interview with Iain Henderson, Founder of DataYogi, he identified three key attributes through which Web3 could disrupt the current Web2 data ecosystem.
The ability for users to easily own more types of online assets
Increased data security with immutability and distributed ledgers, among other features
The shift in corporate/professional culture and infrastructure
Data Ownership and Marketplaces
Similar to how tokenization in Web3 made NFTs and essentially any type of digital asset ownership more easily accessible, data sets have now become easily buyable pieces of information. The Ocean Protocol popularized data marketplaces, but their solution published datasets on public blockchains, and it wouldn’t work for more sensitive information like private consumer financial or health data.
The need to make these sensitive data sets enterprise-secure and compliant with data privacy regulations like GDPR gave rise to Weavechain’s vision. Several other DAOs are also working in tandem to create more secure data marketplaces, as will be discussed below. On the other hand, in the CRM (customer relationship management) sector, DataYogi is building tools to make personal data stores available on Web3 — streamlining the process for users to organize where they share their data.
Security with Web3 Technology
Seamless distributed ledger systems (DLS) like blockchains have been a game-changer for data security and verification. In Weavechain’s scenario, data security is made possible by connecting existing databases and uploading hashes of that data to either public and permissionless networks or privately-permissioned sidechains. That means producers get to choose where to store their data, and whether they want to make it publicly available or to select consumers through private keys.
Data verification is made possible through the many properties of utilizing blockchains to store data or data hashes. For each entry and computation, Weavechain guarantees data and computational lineage, meaning that researchers can go back anytime to check what has happened to that data leading up until now. In addition, features like confidential computing and multiparty computing are made possible through Weavechain’s technology, allowing different organizations to analyze sensitive data sets without ever cross-revealing any sensitive information. Other teams, such as the ones at JLINC and Orange Protocol, are also utilizing cryptographic hashes and keys to make data provenance possible and scalable.
If you are ever feeling the need to touch up on some of this Web3 data terminology, be sure to follow us on Twitter, where we’re breaking down industry terms like “sidechains” for general audiences!
DAOs and new Web3 Data Standards
DAOs, or decentralized autonomous organizations, have been all the hype in the Web3 space recently. Although some are still working on being compliant with SEC security regulations in countries such as the United States, they have established excellent frameworks for global corroborators to share and monetize personal data. Builders and startups are also pledging themselves to standards like the MyData Declaration to reinforce their mission of creating a future prioritizing personal data ownership.
ReputableDAO and CureDAO are currently taking these steps to become the hub for health researchers and participants to publish and monetize their personal experiment data through their very own tokenomics. Similarly, CanabisGenomeDAO is building a data marketplace for open-source cannabis research.
Why Modern Businesses Should Take Advantage of Web3 Data
When it comes to why businesses should make the shift to Web3 data, the answer becomes clear. There are two key reasons: 1) To attract more users by upholding user-centric models and 2) To keep the business secure and maintain compliance with data privacy frameworks.
When it comes to the average user and their data privacy rights, the importance may be more than most imagine: with a new era of values comes a new generation of consumers. According to First Insight Consumer Spending Sustainability Report, 75% of Gen Z consumers would rather buy from a brand prioritizing sustainability over a brand name that does not. And within that same demographic, the majority of consumers have a willingness to pay up to an additional 10% if they know that their product is sustainable. This shows that the newest generation values a business that prioritizes the well-being of society over one which puts profit first. So when it comes to selecting between a service that gives them the option to broker their own data stores and one that doesn’t, the numbers already point to where most consumers will choose.
Reason number two ties back in with the initial challenge of businesses successfully utilizing their users’ data mines. In 2021, a class action was filed against Flo, the period tracking app, for secretly collecting and selling users’ health data to third-party advertisers. This case falls under a larger underlying issue with Web2 data: the lack of transparency. When data is only stored on an organization’s local database, it becomes difficult for users to place complete trust in a company for what it does with its data, and rightfully so. However, with Web3 data and blockchain technology, any and all data stored on-chain becomes easily traceable, verifiable, and monetizable. Companies that employ Web3 data solutions solve for trust and privacy because they can easily share data lineage with consumers, and potentially even offer them the choice to monetize and benefit from their personal data if desired.
Blockchains have long been recognized for their credibility and some countries like Singapore are already establishing frameworks on how to comply with their personal data privacy laws when deploying blockchain applications. This is great news for Web3 data, further legitimizing its utility for future innovation.
Conclusion & Weavechain’s Vision
So, why hasn’t widespread Web3 data adoption already occurred? In reality, companies like Salesforce, Zoho, Azure, AWS, WordPress, and Mailchimp are all actually ready to on-ramp their data to Web3. Iain Henderson’s best guess is that cultural differences in businesses are the culprit. He believes big corporations in sectors like financial services are just not yet able or willing to give up control of their customers’ data.
Enter, Weavechain — building the enterprise-secure data on-ramp to Web3. Weavechain envisions a future where data ownership becomes the norm, and we’re looking to become the seamless bridge that connects Web2 firms with Web3 data producers and consumers. Weavechain is working to bring innumerable Web3 benefits to the existing personal data mines out there. Our technology allows enterprises to promise customers that their data is secure and offers tools to easily share or monetize data with the ability to encrypt sensitive fields, allow confidential computing only, or even revoke access entirely with the click of a button.
Interested in how we can bring change to the data brokerage landscape and help your organization?
Drop us a line at hello@weavechain.com
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