Updated: Aug 23, 2021
Data has value. It is becoming more apparent that data is the means in which we pay for free services such as search engines and social media. However, unlike actual money, we don’t realize how much data we are “spending” (sharing) in return for these services.
For example, in 2019 Google generated $133 billion (USD) by leveraging user data to show ads across 3.7B users. This indicates, for Google to generate the same amount of revenue from a private search engine which doesn’t leverage user data or show ads, each user would have to pay $36 annually. While this does not sound like much, it does indicate that our data contains monetary value which goes largely unnoticed.
This is actually by design. “Free”-service providers don’t want users to realize that users are actually paying, and as such, the service providers don’t easily disclose the information they have collected. Instead, the data mining process is seamless and happens without the user even noticing, kind of like an automatic payment. However, unlike traditional payments, it’s hard to check your account for the amount you have paid.
Now that it is understood that data has value, and it is used to make payments, the question is who owns this data, and who has the rights to use it. Tech companies would like for users to believe they can own user data because they are the ones mining it, however just the term “user data” highlights the rightful owner of that information, the user.
There has been a large cultural shift in the way in which we think about data. While it was previously seen as anything that can be passed along without consideration of the originating entity, the user, the pursuit of user privacy has passed ownership back to the user. We are seeing this happen with new laws such as GDPR. Legally identifying user data as property of the user allows them to share it with whoever they wish, but reclaim it upon request.
This has empowered users to feel safer, knowing that they have the right to their privacy, and can ask companies to delete their data as required.
While data ownership has had its advantages, there are some issues it does not address.
First off, it is not apparent who has access to an individual’s data. While it’s obvious some everyday services such as Google and Facebook consistently collect data on their users, cookies enable companies that users don’t commonly interact with to continue collecting user data far after their actual interaction. This means it is likely that hundreds of companies have access to an individual user's data without their explicit knowledge.
Additionally, while users can ask to see the data that has been collected, and request for it’s deletion, it is not as easy to browse the web without allowing ANY organization to collect their data. This means users still don’t always have the option of choosing who they wish to share their data with.
Finally, as previously mentioned, data contains monetary value, and sharing one's data essentially means they are paying the service provider an alternative currency (data). While data is collected, it is not apparent how much this data is worth, and thus users do not know if they are paying a “fair” price. While each user may value their personal data differently, depending on how much they value privacy, this does not account for the value user data is generating for the service provider.
The Future of Data
Given user sentiment, and the realization that data is an “alternative currency”, it is likely data will be treated similar to money, where the owner entrusts a bank to protect their data, ensure only those who have permission can access it, and users receive royalties for any acts of data monetization.
Protecting data. The original reason banks were created to store large sums of cash in a safe environment. This reduces the risk of theft while ensuring customers have access to their money whenever they would like. In a similar fashion user data needs to be protected and stored in a safe location, reducing the risks of any data breach. For this reason if a user chooses to share their data with a third-party service provider, the bank would only allow the third-party to access the data on their own platform. This would reduce the risks of data leaks or redistribution.
Providing access with user permission. While it is extremely difficult to currently browse the web anonymously, an ideal data bank would allow for this. The bank would provide customers the tools they require to block any third-party cookies, and for those organizations which users are comfortable sharing data with, they will be redirected to the bank. The bank would thus have the responsibility to reduce fraud, and limit liability on each user. The bank would also keep a record of the organizations who currently have access to the data and be able to revoke access upon the users request.
Pay users for data monetization. A data bank would be able to manage user data on their behalf, and even force companies to pay a fee to access the data. A share of these fees would then be passed along to the users in the form of royalties. Similar to the current banking industry, this would mean data banks would play a wealth management role, and use data as an alternative currency to generate revenues.
While it is clear that users are becoming more conscious about their personal data, tech companies are hesitant and avoiding this change. Organizations such as Cyder, and Brave have emerged to help take the user’s side and push towards a more user friendly online experience.
To learn more about data banks like Cyder, visit www.getcyder.com