Blockchain’s potential to revolutionize data
There is no doubt data powers everything we do in the digital world, and this will hold true even more so as man and machine become interconnected. Right now the relationship of how data is owned, secured, and leveraged is completely unbalanced.
This can be highlighted by the fact that:
“The top five companies (Google, Facebook, Apple, Microsoft and Amazon) boast a combined market value of almost $3.5 trillion. That’s greater than the 2017 GDP of any single country in the world except for the US, China, Japan, and nearly equivalent to the GDP of number 4 Germany.”
Data has been tremendously centralized because of the current infrastructure of the internet. This is where you see our data being collected, profited, and leveraged by centralized institutions. If you examine these companies and the reason why they have such high revenue is directly in proportion to the data they own, our data.
“In most of our interactions with power, data is not something that is freely given but is forcibly extracted.”
The underlying technology that make up a blockchain — distributed ledger system, cryptographic hashing, and permissioned keys has the potential to equalize the relationship and improve the way we interact with data. I will discuss what the current landscape looks like, how these technologies can change it, and why it matters.
Currently data moves from individual => data => corporations. It is a unilateral relationship, where individuals en masse create data and it is then for a lack of a better word, taken and turned for a profit. This is accepted because we as individuals are limited technologically with the current infrastructure of the digital world, and because there hasn’t been an alternative…yet. The concept of big data is very new, but we have already experienced pains in how this unilateral relationship of data has affected our society.
- Cambridge Analytica — A select few social media companies control most of the influence in the spread of information. We have seen just in this last presidential cycle the ease of which our data can be sold, and we don’t know about it until way after the fact.
2). Cyber Hacks — The vulnerability in the infrastructure of the internet has been taken advantage of by cybercriminals. The institutions we trust with our financial, medical, and personal data have continuously been hacked.
3). Distorted “Value” — I touched on this earlier, but essentially companies that own the most data have become the most valuable in the 21st century.
What technologies will change the data landscape.
1). Distributed Ledger Technology (DLT) — Instead of central points of failure everyone gets a copy of the “data”. With a DLT, you can maintain an ecosystem without relying on the stability of one entity.
2). Cryptography — Individuals/Corporations can encrypt their data. This makes data only accessible to the people that “own” it.
3). Public and Private Keys — Individuals/Corporations can decrypt the data they own as they wish. This helps with data security and also gives the ability to individuals to hide or give out the data they wish.
By combining these technologies that make up blockchains we can restructure the biggest ecosystem (the internet) and change how data is owned and transacted.
What does it change?
Now the relationship can become more structured in this way:
individual => data <= corporations.
1). Data Security — Encrypted data that is distributed across the environment, can only be permissioned by the owner (you). This gives a level of security and confidence in a digital world that is very interconnected and very much susceptible to cyberattacks.
2). (Equitable) Data Profitability — with the stakeholders (individual vs. corporations) having a more equal relationship with data, we can expect the individual to be able to profit from the data they produce and choose to give. While corporations can still profit from data, but not at the unbalanced scale it has done so far in the 21st century.
3). Data Quality — If we create an ecosystem where individuals can benefit from the data they create, we can develop higher levels of data quality. By making the relationship of data more beneficial for the individual, incentivizing the data producer (individual) and making the transaction more transparent we can collect the right data. This is valuable because data is integral to help power decision making and technological innovations.
This has a tremendous implications on helping solve some of the issues of the internet today, and also helping as a linchpin technology for further innovation. The power of the individual — now individuals will be able to “own” their data, and give it out as they wish, we can commoditize the data we create. The power balance of data ownership is evened out for the benefit of the individual.
Why Does this Matter ?
What does this look like in action? Well let’s take the medical field as an example.
Consumer health information is probably the most sensitive information that we have as individuals, but it is also information that is needed by healthcare institutions. The data exchange in a decentralized ecosystem between an individual and multiple corporate entities can look like this:
Let’s say Jane Doe has a unique medical history that a research institution wants to test for a possible medical breakthrough. Encryption and the immutability of a blockchain provides data security that gives Jane Doe confidence that her data is private to her.
Now let’s introduce some other stakeholders, the hospital that Jane Doe goes for treatment, and a medical research institution that needs data on her medical situation. A research institution wants to collect data on her medical background in order to better inform their own research. They reach out to Jane Doe directly or a hospital that has her permissioned data and offers to pay for this information, this gives Jane Doe some chance for data profitability from the data that she produced. Jane Doe can send her public key to give access to her private information.
Finally, because of the secure and equitable nature of the transaction, the actual data itself will be far more accurate, because it’s coming straight from the source, this is where we see a greater level of data quality that could make or break their research. No need to tip toe around how data is collected (which affects the data that is collected). If we can equalize this relationship, individuals will be incentivized to give this needed information accurately.
The technology that makes up blockchain can reconfigure the relationship between the individual, central powers, and data. This in turn solves issues that are native to the internet today, but it also provides a catalyst for greater innovation for the coming decades. I imagine when decentralization (or a hybrid approach) becomes the standard, we will look at the backward mindset we had on data.