About 10 years ago, Silicon Valley was abuzz with software companies discussing the potential of “Big Data” and cloud services that could aggregate information. As technology progressed, software companies improved their data collection processes and many networks, apps, and devices began to ingest all information linked to the Internet.
Initially, companies were flooded with data, mostly in relation to their consumers, and companies viewed this consumer data as digital gold. They mined as much of it as humanly possible. Soon, they realized they had too much of a good thing. Cloud technology opened up streams of data from social media, emails, phone calls… everything stored on the Internet. But only some information was useful, and it was difficult to trust all the information pouring into the data pool.
Furthermore, when consumers caught wind of the growing data aggregates silently collecting their information, they were understandably rattled. Big Data promised to improve both the lives of consumers and enterprises, but the cost of privacy and trust wasn’t easy to resolve.
Today, political powers have restricted how technology companies collect data. Transparency is a must, and, in most cases, consumers must volunteer their data for companies to use it. Still, many customers feel unresolved. They don’t want to sacrifice data privacy, but they want to benefit from the convenience of an internet-connected world.
So how can customers retain privacy and data ownership? At the same time, how can companies incentivize consumers to volunteer data that can help improve products and services?
The answer is blockchain.
Blockchain technology offers us a way to tokenize data and cryptographically secure that data in private wallets. Cryptocurrency is programmable and can act as both a currency and a conduit for securely delivering and tracking data. Blockchain instills trust in the form of consensus. Developers can code smart contracts that check the integrity of data entered in the blockchain and actively reward providers of “good data.”
These days, almost everything is connected to the Internet. The Internet of Things (IoT) is unstoppable. Now, blockchain can offer a responsible and secure way to manage data in a way that benefits everyone.
Here are a few ways blockchain technology can support consumers, Big Data aggregates, and IoT providers:
- Blockchain can allow consumers to share data with stipulations.
Have you ever enrolled in a store’s rewards program? Almost every major shopping chain in the world has one. During your enrollment they ask for your email, phone, address, etc. — all of it personal information that you may not want broadcasted.
In its current state, your information is unprotected. You have no real way of telling who is using our data for what. Once a store has your info, what prevents them from selling it to the highest bidder?
Now consider this: Say you could share your data but retain digital ownership. You could set a rule that only the person you sent the information to could open and decrypt your data.
Blockchain provides a pathway to this future through cryptographic keys. With blockchain technology, developers can code confidential information into tokens with rules. With this code, data senders can set parameters and gift only certain “recipient” wallets the ability to decode the information. Then, the entire blockchain network can use a shared distributed ledger to determine whether terms were met and revoke access from those who break the rules.
- Connected devices can reward owners for sharing data.
It’s not just superstores. Consider that Amazon, Facebook, Apple and dozens of other companies have constant access to your personal data. Do you know how they are storing that data and who they are sharing it with? How many devices in your home are linked to the Internet or to your social media?
The modern home is internet-connected. Today there are more than 17 billion connected devices and more than 7 billion IoT devices not including smartphones, tablets, laptops, or landline phones.
Your home is “mining” your data. But what are you getting in return? More targeted advertisements? Better music? Is that an equivalent exchange? What if your IoT devices mined via the blockchain instead?
Blockchain IoT devices could create a system of permissioned data-sharing with a higher level of security and more precise data collection.
For instance, imagine you could mine a cryptocurrency simply by watching your favorite shows on a connected TV. On the backend, developers could program the TV to release a certain amount of crypto for each hour of programming you consume. Then, the TV could encrypt data pertaining to your decisions and record details to the blockchain ledger. Consumers that agree to have their data shared with TV manufacturers and/or network providers could trigger a smart contract to unlock the mined crypto and deposit funds in your digital wallet.
In this way, manufactures, programmers and consumers could enter more direct contracts that reward data-sharing. Instead of linking to platforms on centralized cloud servers, consumers could encrypt valuable data, send it to specific companies, and extract a percentage of its value from the sharing process. It is a stark contrast to the typical “terms of agreement” contracts we blindly sign today for access to our favorite software.
It’s more than just a concept. Already, companies like China Mobile are partnering with crypto companies to create token generating IoT devices. In the future, it is likely that many IoT devices will provide a blockchain mining function. Consumers will be able to generate tokens for everyday tasks. The cost offsets from having several IoT sensors “mining” could greatly benefit customers and enterprises.
- Blockchain data can help create targeted data to tackle specific obstacles.
Supply chains and product development teams greatly benefit from accurate data. But today, many data collection systems are flawed.
A miscalibrated device or falsified dataset can easily taint a pool of otherwise useful information. Even worse, interconnected devices could potentially share tainted data across the network and diminish the reliability or effectiveness of connected tools and services.
Furthermore, too much data may dilute reports to a point of meaninglessness. In other words, if a company is absorbing all inputs of consumers without parameters it may find itself drowning in data. If they can’t extract meaningful metrics, what is the point?
Blockchain could mitigate the above issues by using a combination of consensus, redundant network oracles, and targeted data collection. Essentially, companies could tokenize specific data sets they desire and restrict collection to those sets within the IoT home. Then, they could use consensus between several IoT sensors to determine the validity of the data and protect users from malicious attacks or poorly calibrated devices. In this scenario, a consumer could build a network of trust within their home where several devices share and transact with digital information to improve user experience.
Companies absorbing data from these IoT home devices could also benefit from the assurance that no employee or third-party could intercept and overwrite data. The data would be secure on the blockchain via the network of miners validating the transactions of all users in the system.
The nature of blockchain data is structured and abundant. By shifting to blockchain data collection, developers could obtain Big Data with more consistent reporting and higher integrity.
