The word ‘data’ has been burning everyone’s ears for the past few years. Data protection, data security, data storage - but what about data currency?
We’re becoming more tech-savvy as consumers. Alongside that, we’ve started to ask more questions about why companies need our data and what they do with it. And make no mistake, Big Data means big money.
The Big Data market was valued at $138.9 billion USD in 2020 and is expected to almost double by 2025 (Forbes). It’s no surprise then that 'data scientist' was ranked #2 on the USA’s list of the top jobs for 2021.
But what is data, and what is it worth?
What is Data?
You know us, we like to start simple so we’ll just say - ‘anything’.
No, seriously. ‘Data’ might make you think of a bunch of ones and zeros, but what it means is a collection of facts and statistics. We’re living in an era of data overload and it’s no surprise when you consider what qualifies data.
For example, The Information Commissioner’s Office defines personal data as:
‘Information that relates to an identified or identifiable individual’.
What you might not know, is that your personal data can be things like:
Your name, address, and phone number
Your IP address
Criminal convictions
Your buying and browsing tendencies
Mouse clicks and movements
Almost everything that we do online creates data. And it’s this collection of data that Big Data companies use to create a picture of your entire life.
Every step you take (every move you make) online leaves footprints or ‘exhaust’ in a trail behind you. By collecting the data from these footprints, a ‘digital narrative’ about you as a real-life person can be formed.
So of course the next question is: how can this footprint be monetised?
Data as Currency
For data to be considered a currency it needs to have the potential to be used as such.
Traditionally, this system works by currency being exchanged for goods of an equal or perceived value. For example, US dollars have the potential to be spent. But you try and use a $100 USD bill in your local off-license in Hackney.
It’s context-specific. It’s the same reason we’re not (yet) at a stage where you can purchase goods with data.
Similarly, your Facebook data technically only has value in the ‘kingdom of Facebook’ to target ads at you. But elsewhere it has potential value because it can be shared with third-party companies.
This is why, where Bitcoin has been labelled ‘digital gold’, data has been called ‘the new oil’. That’s because, like oil, raw data isn't all that useful - it needs to be refined. It’s the insights you can gain that are valuable. So all that raw data that Google, Alibaba, Amazon, and Facebook collect on you get refined and ‘sold’ (we use the term lightly) to put marketers in contact with consumers.
Then companies can up-sell, cross-sell, create customer service retention plans, and generally personalise experiences.
(Credit: Sogetti Labs)
Just think about it. Just telling me where you live and what your favourite colour is in itself might not seem like a lot. But imagine that you own a fast-food restaurant. You have data of all the sales volumes and times of your whole menu, but it doesn’t mean much to you.
Then someone offers to conceptualise all that data for you so you can target peak menu items at certain times.
You could even set discounts to offer your customers value and boost sales. And this is sort of what Big Data brokers like Palantir do (albeit for governments) - they sort data to drive business decisions.
But don’t forget, this is all with your data. And that data, even the same set (like your age, name, and location) can be reused. Companies like Facebook might share it but they’re still holding on to it for themselves too.
Now, imagine we replaced ‘data’ with that ‘$100 USD bill’ we were talking about earlier. Now the idea of handing it over just because you can’t use it, especially when it can be used over and over again makes it seem like you’re getting a raw deal, right?
‘Data is the new currency.’
Antonio Neri, President of Hewlett Packard
So What’s It Worth?
If you think about yourself alone, then the price of giving up your data for convenient logins and services doesn’t seem like much.
But Big Data companies are reaping the benefits of that apathy from millions (some of them, billions) of people. And it’s not just our attention that’s up for grabs, but even our intention.
With the right digital narrative about you, companies can do everything from the simple stuff like deciding what ads to target you with, to figuring out what type of language you’re most receptive to in emails!
And this creates a revolving door for businesses. They use the resource of your freely given data by either selling it or utilising it to sell you more of their products. It’s a win-win. Not only do they benefit from your free data, but in an ideal sales funnel they also make money out of you at the other end.
And even if ‘it’s just you’ and there’s loads of data ‘exhaust’ to sift through, just consider that 2.5 quintillion bytes of data are created every day!
Ok, so what the heck does that mean? Well, all of that is made up of things like:
Google: an average of 40,000 searches every second
Twitter: 56,000 tweets every minute
Facebook: 5 new profiles created every second
Now, let me ask you this. How many of those above services do you pay for?
Well, you know what they say: ‘if you’re not paying for the product, you are the product’.
‘In God we trust, all others must bring data.’
W. Edwards Deming
And if you’re the product, then Facebook made $27.19 billion USD in the fourth quarter of 2020 alone from advertising. So how much of those profits did any of us see?
If you think about how much companies can make off your data versus the cost and effort to obtain it - then it’s potentially the most valuable asset in the world to date.
(Credit: The Economist)
How Is Data Exchanged?
This brings us on to the question that’s no doubt nagging you. If data is so valuable as a form of ‘digital currency’, how is it exchanged?
Well, without us knowing most of the time.
Data is intangible, so it’s not like you’ll see a bank account of your data getting slowly drained. And, most of the time that’s sort of ok because you’ll probably never know and it won’t harm you.
But one of the big ‘get-arounds’ of data exchange is that most of the time, we technically offer it up.
Exchange By Individuals
Stop us if you’ve heard this one before:
‘We need your number to verify/keep your account secure’.
Sound familiar? But what seems like a routine procedure can give a company:
Access to any existing data linked to that phone number
The ability to message or call you
Knowledge of your phone provider
And that’s just one example of fairly voluntary data exchange. We hand over the rights to our data when we: check terms and conditions and agree to cookies, even when we simply access the internet.
So what’s the alternative? A dystopian future where we’re all using burner phones? Well, if you want to, you can use things like Burnerapp or set up secondary accounts and numbers with Google voice.
But what happens with that data once it’s out of our ‘digital hands’?
Exchange By Companies
We said that simply logging in to a service entails an exchange of data.
And we all have a million-and-one accounts dotted around news, social media, and eCommerce sites all over the web. So thank god we can simply log into almost everything with Facebook and Gmail.
Right?
Well, by logging into third-party sites with Gmail or Facebook, as convenient as it may be, it then puts the onus on them to protect your passwords and data. But more than that, by doing so you’re essentially giving that site access to all of your Facebook data: likes, messages, photos etc.
That’s why earlier we said that companies like Facebook don’t ‘sell off’ data. The data doesn’t move - because they want to hold on to it too - what they offer is a middle-man service to share data.
Of course, there are more obvious, and some more insidious, instances of data exchange.
Take 23andMe, for example, which offers DNA testing. They explicitly state that they don’t sell or lease your personal data. What they do, however, is sell the rights to drugs based on users' DNA.
Yeah, you read that right.
Firstly, they charge you for the service (which, to be fair, is a straightforward exchange). Then they make extra bank from your actual genetic information - the thing that makes you human; that makes you you.
Or what about when you get targeted ads for something that seems completely irrelevant?
The fact of the matter is that, as it stands, ad targeting just isn’t great. We see adverts for stuff we’re already bought, or for a client’s services if we’ve visited their page a lot when working with them. Or for sofas a lot for some reason.
But then do you remember that you had an in-depth conversation with your Mum about sofas while checking your phone, or near your smart TV?
In these cases, the utility of harvesting your data is failing to make your digital experience more personalised. And you’re not getting paid for it.
So it begs the question:
Are You Getting Robbed?
We’ve established that data is being exchanged as a sort of digital currency.
There is an exchange of access to data sets for very tangible monetary outcomes. It’s just that this whole exchange is happening without your knowledge.
We as users, for example, share information or connect our social identities in exchange for promotions and discounts. This creates a new value exchange between brands and consumers, with the medium of exchange being data.
So the questions you have to ask yourself are:
What value do I put on my personal data?
Is the exchange of my data making my digital experience more personalised? Is it making my life easier?
Luckily for you, you don’t need to pick a number from thin air for the first question. An in-depth study has shown that, to Facebook, each user’s personal data is worth about $200, after costs.
Granted, this is an aggregate. The Wall Street millionaire is going to be worth more in potential data currency than say, I am. But it still suggests that we all have an inherent asset that we’re just giving away.
And all of this in an era where younger and younger generations are getting switched on to trying to make our money do more for us. We’re more likely to look at investments in stocks, in cryptocurrency, even to turn rooms and homes into Airbnbs.
So why aren’t we making our personal data work for us?
Facebook’s 2018 Q4 earnings per user (Credit: Visual Capitalist)
The answer to the second question is again, personal. Sure, your favourite clothing store holding your basket and remembering your login details might be convenient - but what’s the non-monetary cost?
For example, have you ever signed up for a dating site or app? Do you feel comfortable with the exchange or possibly finding a partner versus giving away access to:
Your photos
Your age, gender, location etc.
Your personal messages sent on the platform
And even in some (thankfully rectified cases) your sexual health history and the ability to use this data forever?
As we’ve said, these are examples from a not-too-distant past. But what’s the justification for, say, Amazon’s Alexa having access to all of your spoken data, all the time.
Sure, Amazon’s disclaimer says that Alexa isn’t spying on you just like the children’s Bluetooth smart doll Cayla was supposed to be unhackable. But Alexa’s propensity for ‘accidental wake-ups’ begs the question:
Is Using Your Data Ethical?
The answer is - it could be.
But at the moment, is it just being used to sell you more stuff? The most data literate area of a company at present is probably their marketing department so most of the time, the answer is yes.
The introduction of the General Data Protection Regulation (GDPR) in 2018 also suggests that data usage is getting more ethical.
But by default, that means it wasn’t, to begin with. Now, at least, you have a right to know what data is being used and why. We’ve moved from opt-out to opt-in with no pre-checked boxes, and you’re entitled to a copy of your data or to have it deleted.
Data for the Common Good
And don’t get us wrong, this article isn’t just Big Data bashing. Things like Amazon’s AWS cloud-infrastructure means that public Big Data sets like the Human Genome Project are readily available.
Our earlier example of 23andMe did use data to come up with a drug that might genuinely help people. Your medical data could be collected to offer a more accurate diagnosis. And this could ultimately minimise health risks and improve the economy.
This just puts a lot of faith in still fairly unregulated Big Data companies. Companies that we think aren’t necessarily malicious, just flawed.
But then again.
Spying On Your Data
Amazon can do amazing things these days, like anticipatory shipping to offer next day delivery, and recommending books based on Kindle notations.
But for every positive, it seems like there’s a fairly significant negative. Facebook’s attention engineers use your data (including clicks and mouse movements) to keep you locked in. And the effects of short-term dopamine feedback loops can lead to reduced concentration and have implications on your mental health.
We don’t live in a police state where the authorities can actively listen to your phones. But by signing into apps or using your phone, the records can be subpoenaed in criminal cases and used to convict. Just like in the case of Timothy Carpenter.
Now, let’s just make it clear the dude totally did commit armed robbery. But it doesn’t make the implications less worrying.
And what about Facebook’s famous Cambridge Analytica scandal where they ‘accidentally’ allowed access to millions of people’s data without permission? Bearing in mind that this was made available to a consulting firm engaged in political advertising.
How do you make an objective decision when all the information you’re receiving has been designed to nudge you towards a predetermined one?
What if marketing is targeted at you when you’re most vulnerable?
Data sets of searches for terms like ‘payday loans’ are extremely valuable to advertising companies. What about if a company can access data like the location and frequency with which you visit your local AA (alcoholics anonymous) meetings?
Even when data is meant to be used to effect a utopian society - who do we trust? China’s Social Credit System purports to make everyone better citizens and make things like getting a loan easier.
There’s impartiality suggested by an objective ‘algorithm’ that takes into account things like criminal past and credit rating. But that algorithm was created by someone for a purpose - so what’s the purpose?
When your friends’ ‘scores’ could influence yours you start to think quite literally about the company you keep. If you’ve committed a crime and served your sentence - we as a society say that you can start again (sort of). If you delete drunken photos of yourself on social media before applying for a job you assume they’re gone, right?
But if we end up policing our own behaviour (and maybe even others) do we lose control and, ultimately, become less human?
(Credit: Kevin Hong)
How To Demand More
We hope that by reading this article, you’ve come to understand that you and your data have value.
And while it may seem inconvenient to start protecting it, or trying to leverage it, it’s this worldwide apathy that’s making Big Tech billions of dollars.
So while data might not be an asset that grows in value for you like a stock, it is an almost bottomless resource. And if they haven’t already, big companies will be looking to monetise the data they do have.
So how do we ensure they do it ethically and in a reciprocal manner?
Using ad blockers and alternate accounts might be the first step, but the problem is that it puts the onus on us to protect our data. We need to ensure instead that companies use it properly.
Think about if businesses became loyal to us, not the other way around. What if you could fill a shopping basket with your intentions - your hobbies and interests, even your plans to buy a new car?
Then businesses could approach you with that data set in mind and personalise offers. And we don’t just mean targeting generic offers at you. You could get a truly personalised experience and you wouldn’t see ads for cars for weeks on end after you’ve already made a purchase.
And the business would benefit by cutting out the middlemen because you offered up your data. In the meantime, you could go back to storing it in your shopping basket. Imagine if you could leverage that buying power as a group.
Companies like BIGtoken are already breaking ground on this sort of buying power. But for data to truly become a currency, we need the potential to buy real-world goods with it.
Imagine a world where you can pay for your Netflix subscription with tokens earned by selectively offering out your data. Otherwise, to protect your data, everything will have to revert to fee- or subscription-based services.
And who really wants to fork out more money?
So this is what the future needs to hold - we need to demand the rights to our personal data back. Things like the GDPR and Australian Consumer Data Right acts are steps in the right direction towards regulation and ownership.
The thing is, data exchange has been biased against users for so long. By constantly ticking terms and conditions (that are incomprehensible even if you did read them) we’ve effectively said ‘yes’ to the rulebook for too long.
And consumer protection laws normally lag behind technological development. So can we change that and start regulating data usage. Can you?
You could:
Store your personal data on a HAT microserver
Use plugins and browsers that don’t track you like DuckDuckGo
Conduct transactions on the blockchain
Reduce the use of social media (we know, just a thought!)
The thing is, your data has value but you also don’t want to share all of it. You have stuff you want to hide (we all do) and you should you - it’s perfectly human. So start thinking about your digital narrative and whether companies are living up to your standards.
Way back in 1890, in The Harvard Law Review, Samuel Warren and Louis Brandeis wrote an article called ‘The Right to Privacy’. In it, they wrote that the right to privacy is the right ‘to be let alone’.
We’d like to add to that, and end on the words of Tijem Schep, that the right to ‘privacy is the right to be imperfect’.
If you’re concerned about your personal data, or even if you just want to learn more about tech in a straightforward manner, you can get in touch with us today.