Datawallet and the Rise of the New Internet [PART 1]
How self-sovereign wallets unlock the future of the internet and what it means for society
Datawallet is a revolutionary alternative to the current data brokerage system and a groundbreaking application of blockchain technology that will provide transformative services to data creators and consumers alike.
Powered by a radically increasing supply in data, and coupled with accelerating computing power driven by Moore’s Law, the emerging fields of Machine Learning and Artificial Intelligence stand to disrupt every facet of our lives — -from self-driving cars to AI oracles. However, AI products have not been able to reach their potential since their functionality depends on the quality and volume of the data being fed into the systems. Currently, AI systems require users to go through an onerous data creation process to build up the training set from which the system learns about each specific user. This crude user experience is a tremendous hurdle to powerful AI systems. Users are unwilling to spend the substantial time needed, and the merits of the service are not immediately clear. Datawallet blows through these cumbersome hurdles.
But what exactly is Datawallet and why is it going to become a household name? In this two part post, we’ll give you a comprehensive overview of what Datawallet is.
What exactly is Datawallet?
Datawallet is a blockchain-based data-exchange that allows users to reclaim and profit from the data they create online. That can either be in a monetary way, by earning our proprietary network token called DXT, or in a non-monetary way by sharing data in return for personalized services. Datawallet gives users complete sovereignty over their own data, while giving developers and data consumers access to a marketplace for high-quality data. In the Datawallet Marketplace, data consumers use data exchange tokens (DXT) to purchase data directly from creators using a smart encrypted-data contract, which ensures security and transparency for both parties. DXT will drive the marketplace, and its price will reflect the value of data as a digital asset. Datawallet also provides a data API to enable developers to use this completely new data universe to build advanced applications. Datawallet is the catalyst that will transform the fundamentals of our data-based economy forever changing the way people think about and use data in their everyday lives.
In the following sections we will outline exactly why we need Datawallet.
How much Data are we talking about?
A lot. And it’s getting bigger every day. Data is growing at an expanding rate, and becoming concomitantly more valuable. By 2022, data is expected to be the most valuable resource on earth. Data, contrary to most resources, is entirely personal: its ownership is clearly attributable to the individual that created it. The data we produce is slowly but surely becoming the most valuable asset we own. A staggering 90% of all data has been created in the past two years and this market is predicted to grow 27% per year. In 2012, the Senate Committee of Science, Commerce, and Transportation estimated that the Data Brokerage market was valued at a staggering $156 billion. This is more than four times the revenues the entire casino industry in the US generated ($37 billion) and higher than the GDP of roughly 70% of the world.
And this data is valuable?
Very. Based on forecasts of growth in the Data Brokerage market since 2012, we find that today the average American citizen’s personal data is worth roughly $1,600 per year. That would represent a 2.8% increase to the median household income. Due to their relatively higher internet consumption, millennials between 18 and 29 could make $2,600 per year if they took data brokerage into their own hands. By the year 2022, this number is projected to grow to an average of $6,700 per American internet user per year, and $10,900 per person for millennials.
Where is that money going?
Data brokerages. The current data brokerage market is a multi-billion dollar a year industry, yet data creators receive no monetary gain for the value they create, and their consent is acquired through long and convoluted Terms and Conditions Agreements. Data creators cannot view their own profiles; they have little knowledge of what data has been collected from them nor the inferences that data collectors make about their behaviors, characteristics, and personalities. Datawallet will help creators better understand their own data, while providing them secure marketplace to in which to sell their data as they please. Further, there are clear security and privacy concerns. Cloud-hosting is the default for IoT and social media storage despite providing a wider security surface area. To assure the security and privacy of data, a suitable requirements-engineering framework is needed.
Well at least the people buying the data are happy!
Nope.The data-sharing economy is also dysfunctional for data consumers for three issues:
First, a single user’s data production is fragmented across multiple different platforms, and there are no standardized identifiers to tie them back to together and link them to the user. As a result, Data Brokers employ probabilistic models to approximate the likelihood of data points belonging to a given user. These highly fallible models lead to misunderstanding of target audiences, inaccurate ad delivery, and millions of dollars of impression wastage. This is the so-called Silo Problem.
Second, Data Brokers sell data that are either publicly available or licensed to them via third party agreements. However, these only constitute a fraction of all personal online data. This Quality Problem leads to the supplied data sets lacking critical dimensions of information, thus leaving companies with insights that are highly generic and inaccurate.
Third, the current Data Brokerage model is shaped by an Ethics Problem. Neither do personal users know who is sourcing what part of their data — who buys it and for what purpose — nor are they included in the value chain and financially reimbursed for the data they created. While it is not a prevalent public debate, Data Brokerage is one of the most pressing socioeconomic problems of our modern society precisely because of said Ethics
And this is where Datawallet comes to the rescue.
With a singular insight we can rectify this broken ecosystem — -the exchange should be based upon expressive user consent. Building on this foundation we have developed an ecosystem that enfranchises users and provides data consumers with better data — -a win-win!
In our next post we turn to introducing the ecosystem that makes this possible.
