Data is a currency

The trade in data is only in its infancy

If I talk about data marketplaces, you probably think of large resellers like Bloomberg or Thomson Reuters. Or startups like InfoChimps. What you probably don’t think of is that we as consumers trade in data.

Since the advent of computers in enterprises, our interaction with business has caused us to leave a data imprint. In return for this data, we might get lower prices or some other service. The web has only accelerated this, primarily through advertising, and big data technologies are adding further fuel to this change.

When I use Facebook I’m trading my data for their service. I’ve entered into this commerce perhaps unwittingly, but using the same mechanism humankind has known throughout our history: trading something of mine for something of theirs.

So let’s guard our privacy by all means, but recognize this is a bargain and a marketplace we enter into. Consumers will grow more sophisticated about the nature of this trade, and adopt tools to manage the data they give up.

Is this all one-way traffic? Business is certainly ahead of the consumer in the data management game, but there’s a race for control on both sides. To continue the currency analogy, browsers have had “wallets” for a while, so we can keep our data in one place.

The maturity of the data currency will be signalled by personal data bank accounts, that give us the consumer control and traceability. The Locker project is a first step towards this goal, giving users a way to get their data back from disparate sites, but is one of many future models.

Who runs data banks themselves will be another point of control in the struggle for data ownership.

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  • http://www.hometownplus.co.uk Mike Riddell

    Yes. And when the public wake up and realise how valuable their data actually is to businesses, then they will soon demand a bigger slice of the value that is released from it’s use.

    ‘Vendor relationship management’ is just around the corner. Can you imagine how convenient it would be if, instead of being treated as a passenger/a patient/a consumer/a diner/a fan/ a citizen etc, ‘the system’ treated you as the same person?

    It begins and ends with trust. Would you trust these people…http://www.vimeo.com/18848140

  • http://infochimps.com Michelle Greer

    Disclosure: I work at Infochimps.

    “When I use Facebook I’m trading my data for their service.”

    The key word here is “my”. People fear the sale of their individual data that connects their identity with a record.

    Yes, many sites are collecting data and some sell it. The line that makes this fuzzy is whether or not that data has personal identifiable information or not. I don’t mind if someone sells that a 31 year old single female in Austin likes Whole Foods. I do mind if someone sells that I like Whole Foods, and then associates this information with other pieces of information that could positively identify who I am, particularly without telling me.

    People have sold data for years. What makes this age distinct is that data is so much easier to collect and track it en masse. 1.) If you behave well on the public internet the same way you should behave in public, you should be okay. 2.) Consumers should be aware of the concept of PII and when they are permitting a site to sell it. Most sites do not in fact sell PII as it is a surefire way to alienate your users.

    To Mike’s point, businesses are already using data to make smarter decisions and provide more value to customers. In this respect, the trade between consumers and businesses eager to get their data has already begun.

  • http://www.linkedin.com/in/steveholcombe Steve Holcombe

    Edd,

    Very good to see a post like yours.

    I have re-posted as a discussion to the members of the Data Ownership in the Cloud networking group on LinkedIn – http://tinyurl.com/datacloud

    Cheers,

    Steve Holcombe, Manager
    Data Ownership in the Cloud
    http://www.linkedin.com/in/steveholcombe
    http://twitter.com/Steve_Holcombe

  • http://twitter.com/dotpeople dotpeople

    One future model is the syndication of data to the public cloud from a private in-home appliance that can compute marketing analytics locally. The appliance could also save media (e.g. photos, videos) as they are published to social networks.

    This model would allow consumers to review and sell summary data, rather than full transaction data. The raw data would remain under the control of the consumer, who has the legal right to aggregate (or even purchase) their own data from various sources.

    See http://homecloud.com for one approach from a company that makes broadband gateways for US telcos. The HomeCloud appliance apparently won a CES 2011 innovation award, but there don’t seem to be any published reviews online.

  • http://www.whatsthebeef.org whatsthebeef

    Mmm very thought provoking, personally the introduction of the concept makes the whole thing less desirable than before. However it does make the use of this data more justifiable if only it was stated in no uncertain terms when you sign up (Although I have a pretty good idea why they don’t do this).

  • http://www.lockstep.com.au/blog Stephen Wilson

    Clearly data has value but that doesn’t make it “currency”. Lots of things have value but only dollars and cents backed by a central bank are “currency”. This is an important if arcane point to make because the value of currency needs to be standardised.

    What is the value of personal data? Who knows — it’s a moveable feast. In particular, is any standardised value (payment) being returned by Facebook in consideration of the personal information we gift them? Not really, it’s still playing out. As you say, the bargain between Facebook and its members isn’t even recognised as such by many people, who are simply having a great deal of fun online, trusting Facebook implicitly to protect their interests, while the great big informopoly makes as much money as it possibly can from the informatic rivers of gold they get almost for free.

  • http://www.learningiphoneprogramming.com/ Alasdair Allan

    Interesting. I made some similar points about data ownership and the market for data during my Ignite talk in London recently, http://www.dailyack.com/2011/02/ignite-london-4.html

  • http://www.statz.com Tom Wilson

    Disclosure: I work at Statz, the first consumer controlled Board of Trade for personal data.

    Edd – you are correct that consumer trade in data in only in its infancy. One key observation is that today, that data is bought, sold, or traded – both online and offline – without representation, control, or beneficial participation of the individual consumer.

    However, the distinction between online and offline is increasingly fuzzy. And your data is frequently captured, stored, bought, sold and utilized without your consent or compensation.

    Commentators on this post may want to check out https://www.statz.com – the first consumer-oriented data marketplace. And you can check out our FTC Comments at https://www.statz.com/StatzPublicContent/ResourceLink.aspx?ResourceName=STATZ-FTCPrivacyComments.pdf

  • http://www.sally.com sally

    It almost seems more like a commodity, rather than a currency.

    Personal data is certainly interesting, but for me, the collective swarm of aggregated data is where the real issues are. As consumers, its harder to control that. We’re a piece of a data story that may or may not be accurate, depending upon the person/bot who is mining/synthesizing and reporting it.

    The repercussions for misinterpreted (aggregated) data stories being acted upon and presented back to the consumer or in a worse case scenario, reported to others who are designing community or government services, is especially sobering.

    I’m concerned about controlling personal data, but I care more about someone aggregating it incorrectly and making wrong assumptions that impact our day to day living and future.

  • http://www.mixorg.com Sachin Gaur

    I published a slide set on a concept I call “data markets”. Which is based on my research on privacy. Hope that readers can find some good references of existing work from there.

    The link for the slides is here : http://www.slideshare.net/sachingaur/privacy-market-public