Perhaps you have heard people saying things like “data is the new oil”. What does this mean and who is profiting from it?
The Problem: Digital Data is a Valuable Commodity
In the last few years, vast amounts of digital data have been generated by individual users and the rate at which data is accumulating is growing exponentially. Currently, 2.5 Quintillion bytes of data are generated each day through online activities, such as browsing the internet, interacting on social networks, uploading personal files, syncing devices and shopping online. The rate at which this data is being generated is growing exponentially. 90% of the world’s data was created in the last 2 years alone and the rate of stored data stored grew 4x faster than the world economy.
This exponentially growing mass of data has become a significant source of value and economic power for those who are able to control and monetize it. However, the individual users who actually generate the data do not benefit at all. Individuals lose control over their personal information when signing up to various services such as Facebook, Google, Instagram, Twitter etc., which offer ‘free’ services in exchange for exploiting user data, e.g. Google’s Gmail service reads emails and shows targeted ads as a result. The user-generated data is stored and owned by these large private organizations in huge silos where it is vulnerable to profiteering, tampering, theft and other exploitation.
This is where the new Datum Network comes in. It is a decentralized storage network and personal data marketplace. Datum will run on a secure smart contract blockchain that allows users to retake control of their data and benefit from its value, both the personal and habitual data they produce every day (e.g. an individual posting an image or making an online purchase), and also data from the devices they control (e.g. location information on a cell phone).
How does Datum propose to achieve this? Using the Datum Network anyone can store personal data securely in a decentralized way and earn tokens for sharing it with Datum’s pre-screened partners. Users will also be able to inspect the data that is being transmitted at any time and trace who accessed it at any time. In this way, Datum lets individuals control and profit from their own data while also providing access to high quality data to researchers, companies or individual consumers via its marketplace. This is in stark contrast with current corporate silos that collect vast amounts of data under restrictive licensing terms (e.g. an individual giving up most rights to their image when posting it on Instagram).
The Datum Network is powered by the Data Access Token (DAT). DAT is a utility token that can be exchanged for certain privileges on the Datum Network, such as participation in the data market and registration as the storage node. The DAT smart token allows for optional selling and buying of stored data while enforcing usage rules that are set by individual data owners. Tokens exchanged for these activities will be destroyed. As the supply of DAT is fixed the net effect of these activities is that the supply of DAT will decrease over time (deflation). Storage Nodes are paid fees for storing and transmitting data.
It is likely that government regulation of the data industry is on the horizon in various countries, which will be welcome if the regulations are well-crafted. However, Datum is offering a tool that individuals can use to directly take control of their data without needing to appeal to state-base legal systems. The more users on the Datum network the more powerful the momentum becomes, eventually if enough users join they would be able to insist that data is stored and handled through the Datum network. Individuals could change the data market without having to depend on governments. In this sense, the Datum project embodies some of the spirit that animated the development of blockchain and cryptocurrency technology in the first place. At the same time, without such large-scale adoption it seems hard to imagine Datum’s data marketplace succeeding.
This article was created in exchange for a potential token reward through Bounty0x. @frauswif