What is decentralized data monetization?
There has been lots of hype when it comes to managing data on the blockchain. Projects of varying quality and ambition have appeared, some going just as fast as they came.
But with intelligent data management as one of the most compelling use cases for blockchain technology, there potential is enormous. From using the technology to manage data transparently in the public sector to securely sharing data in the healthcare industry, there are endless ways that distributed ledger technology can be used to verify and secure data across a global network.
The hotel and airline business ($700 million) loses $700 million each year due to cyber fraud. [via Shape Security]
There's also a huge opportunity when it comes to loyalty programs in travel and hospitality. Singapore Airlines recently developed a blockchain wallet for its frequent flyer program, increasing security and stability.
The blockchain-based approach also expands the way that frequent fliers spend points. Rather than only spending on flight redemptions, Members can alsoUse the wallet for everyday transactions. By pushing the wallet closer to daily transactions, the brand encourages more redemptions.
Yet programs like this only go so far. Users are still not in complete control of their data.
For a truly decentralized program with global reach, It's essential to allow users to control what and how they share data with advertisers — and what rewards they receive for doing so. This changes the dynamics, and allows advertisers to put a concrete amount of value on a customer engagement.
Rewarding users for sharing their data
For the blockchain to really achieve its aims of a more decentralized world, Users must have more control over their data.
A great example of this is the Brave Browser, which prioritizes user control over how they're being tracked online, and what their date is being used for. The project also allows users to reward publishers with money depending on how long a user spends on the site. These Basic Attention Tokens are one of the new currencies of the decentralized economy powered by the blockchain.
Another example is Datawallet, which has built a system to allow users to bank data and then leverage it out to third parties — all with complete control over who it’s given to and how it’s used.
Research suggests that data worth $7,600 per US internet user is being sold every year. In four years’ time, when the company predicts data will be “the most valuable resource on Earth,” this figure is expected to rise to $10,100.
With Facebook’s recent privacy-related stock plunge, it's becoming clear the consumers want more control over their data. By offering granular controls over what data shared with which brands, a service can be built that is extremely sticky and rewarding to users.
Another key pointIs that advertisers can set rewards for specific pieces of information. Users can then opt in to share this information to earn the reward.
This makes it very clear what the transaction is worth, which makes users more satisfied while brands gain greater engagement from users. Since those users have chosen to share the information, they are more likely with that brand.
This is decentralized data monetization: Taking away complete control from a centralized platform and giving it back to the user to distribute (and monetize) data how they see fit.
Moving loyalty to the blockchain
Moving rewards to the blockchain is a massive opportunity for brands that use loyalty programs within their marketing mix.
In travel and hospitality, data has traditionally been siloed. Credit card providers keep transaction data related to their users, while individual travel brands do the same. This leads to loyalty program proliferation among consumers — they have to become members of so many loyalty programs that they can't keep track. Earned loyalty points sit unused, wasted by the same consumers whose loyalty was supposed to be rewarded.
What's needed is a solution that automates earning points across all brands. This is not an easy feat, but it is one that is especially important in an experience-driven industry like travel and hospitality.
As Payments Journal rightly points out, eliminating the ability of insurers to devalue earned points makes loyalty much more rewarding. If a user knows exactly how much points are worth when redeemed, that certainty makes loyalty much more appealing.
The issuer no longer sets redemption ratios, removing any ambiguity as to what a point is worth; merchants price their goods at market rates to encourage purchase, removing hidden markups; and loyalty truly becomes a currency.
Loyalty is broken when the issuing company can simply devalue their own points and reduced the value of the points that people have been earning as loyal customers.
With TAP, not only can points be easily redeemed but they can also be earned in a completely new way: by sharing your own personal interests and preferences with the brands you love.
And when brands want to advertise to customers, their reliance on interruptive advertising means they spend more money to reach fewer customers. No one clicks on ads anymore, and brands are spending more than they should to reach audiences that might actually be willing to share their information — for a price.
It’s only through decentralized data monetization that users can regain control and brands can enjoy greater engagement with new and existing customers. The future is near — and it’s a future of complete user control of data!