Why blockchain will disrupt data monetizers – even giants like Facebook & Google
Data is as exciting as the beige pants of a third-rate stamp collector on a dreary winter morning. (I hereby apologize to all stamp collectors and wearers of beige pants...
Today, disruptors are standing at the doors of the GAFBAT (Google, Amazon, Facebook, Baidu, Alibaba and Tencent) mafia and they hold the promise of granting us the control ànd ownership over our data back. Because however ruthlessly smart their business models and customer-driven their innovations are, the Day After Tomorrow promises to be decentralized and data sovereign, which is pretty much the complete opposite of what these centralized data tyrants stand for.
The future will be decentralized
The Internet of Things is decentralized, it’s a massive “soup” of talking devices that’s so huge that only a nature-inspired system will be able to manage it into efficiency. Mickey McManus has a brilliant talk about this. Companies too are decentralizing, because hierarchies are slow and hold back the necessary flux of intelligence to survive in disruptive times. Read “The Starfish and the Spider" if you want to understand how. And last but not least, there’s this holy beast of decentralization called the blockchain.
For those who have been living under a rock (nothing wrong with that, it’s a quiet and soothing place and we all need to disconnect from time to time): a blockchain is a decentralized, distributed and public digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the consensus of the network. In human speak: one piece of information is spread over all the nodes of the blockchain network which means that no one can f*** with that piece of information without the others knowing. Which makes it safe. That’s why people call it the Trust Machine. It’s very difficult to fraud with data on the blockchain. As Ethereum founder and mismatched Hello Kitty socks-wearer Vitalik Buterin once put it: it “solves the problem of [data] manipulation.”
Power to The People
If data is power, then the blockchain gives that Power Back To The People. The wonderful Shermin Voshmgir firmly believes that this revolutionary new kind of decentralized internet will allow individuals to reclaim the ownership of their data. It will solve a lot of problems that the original internet of information was not able to manage, like for instance piracy of music, movies and pictures copyright.
But it goes even further than that: the blockchain will not only allow all kinds of artists to publish their own creative data pieces, be it a picture, movie, music or book without intermediaries. It is especially good at cutting out the middle man. And though we rarely look at them that way, data giants like Facebook and Google are middle men too: they stand between our data and the companies that are paying them for access to that data so they can reel us in with the things we crave. That’ where platforms like Shping come in, which allows for more direct connections between retailers and consumers. Or Datawallet, which plans to help the public own and monetize their data, allowing them to decide who sees their information and which details they access.
A lot of us – especially the Chinese – have no problem with the fact that Facebook or Tencent is selling our data for relevant advertising. Because it’s - ah, the magical word appears - convenient. But there’s one rub: they sell it to the highest bidder, which means that it’s not always the most relevant information reaching us, but more the one from the highest bidder. Now, if we could decide who shows what to us in direct, that might change the game. And if we reclaim the ownership of our data - which is only quite logical after all - that will be exactly what happens.
As often, the Chinese have understood this development before most of the world. A perfect example would be ONO, “the world’s largest free, open-source, decentralized social network for the new generation”, as they call themselves. Far from being this highly experimental startup, they have very recently raised $16 Million in Series A financing. This type of open ad highly transparent ecosystem comes at exactly the right time amidst the Facebook/Cambridge Analytica kind of scandals. And then there’s these ex-Ant Financial (affiliate of Alibaba) execs which are building nebulas.io a Google for the blockchain world.
So, is this change for tomorrow? No, because let’s face it, blockchains are still extremely costly to maintain, hard to scale and very slow. “There is no “move fast and break things” in a blockchain. If you break things, you lose consistency and the blockchain becomes corrupted and worthless.” Jimmy Song explained in “Why Blockchain is Hard”. But dismissing its worth because it’s still in its infancy, would be a huge mistake. Remember this dial-up internet sound?
So, if a big part of your revenue is based on data monetization, you might want to keep an eye on the latest developments in blockchain. Interesting times are a coming.