Sovereign Data, Monetization and User Empowerment through Blockchain
Mechanisms for user data control and commoditization with decentralized technology
As blockchain technology evolves, it continues to unlock new potential use cases built largely upon its core value propositions of censorship resistance, immutability and open transparency.
A powerful use case, that is largely the foundation for the concept of Web3 (an internet where users are in control of their own data, identity and destiny), is the ability to create businesses and services online where users have complete sovereignty over their data and are empowered in how they choose to utilize their data interacting with these online services. Of these future Web3 services, many will be governed completely by the community that participates in using or providing to these services, eliminating centralized authorities with large amounts of power and/or removing rent collecting middlemen.
The three core components of technology that will enable this is:
Decentralization — censorship resistance
Decentralization, is at its core is the provision of censorship resistance into digital technology. Blockchain networks that are truly decentralized allow anyone in the world to utilize, build on top of and/or use the services provided on that network. That is, decentralized technology provides accessibility for all without restriction of participation, or creation of privileged actors/parties that dictate authoritative control over systems.
Tokenization — monetization and capability through open interoperable standards
Tokenization gives the ability to represent anything, into a standardised format that is interoperable with other applications and integrated closely into a completely open framework. Tokens were first utilized as currencies but have also been used to represent objects such as gold, stocks, derivatives, interest bearing assets, digital collectibles and more. Open standards ensure that open source development can co-contribute and ever improve the broadening ecosystem (which is needed for a Web3 framework to flourish), with token standards in particular defining the necessary bounds for financial interactions in blockchain systems and allowing for data to be represented easily in monetary forms.
Liquid marketplaces and monetary incentives
Liquid marketplaces and exchange mechanics built upon blockchain systems mean that new data types are easily tradeable and therefore able to form effective valuations as price is discovered effectively. Any tokenized data or dataset can be traded and exchanged simply, providing frameworks that allows for automated and market based mass data utilization/exchange, easing access to IOT data, AI datasets and beyond.
The following projects provide examples of how these elements may operate to form key pieces of a Web3 enabled internet that empowers sovereignty for users:
Filecoin — Monetization of data resources & incentive mechanisms
Filecoin is an example of one of the more basic Web3 concepts, which is leveraging blockchain and distributed technology to create peer-to-peer systems and services that openly rewards participants for supplying resources.
Filecoin miners get paid ‘Filecoins’ for fulfilling storage requests and hosting files on the Filecoin global market. That is, any internet user with spare data storage capacity on their devices can monetize their capacity. This creates a marketplace for storage that is cost effective and competitive as it utilizes resources that would have previously been underutilized or unused.
Such coordination in a fully peer-to-peer model is only possible through the use of cryptocurrencies and cryptographic proofs, ultimately creating more efficient markets and services for these web/cloud based services and products.
Basic Attention Token (BAT) — User empowerment and control of data interaction
Basic Attention Token and Brave browser are a new approach to digital advertising that is focused on serving sovereignty to the user with blockchain based features. Basic Attention Token has created a new token that can be exchanged between publishers, advertisers, and users, that is used to obtain a variety of advertising and attention-based services on the BAT platform.
Using the BAT platform within the Brave browser drastically changes the relationship a user has with the web. By default, Brave blocks all web ads as well as privacy invasive tools such as web trackers. All advertising is opt-in, with users paid in BAT for their attention consuming the advertisement content. This significantly changes the dynamic that advertisers and internet users have, as due to the reward incentive mechanisms, advertisers need to aim to encourage participation and interaction more so than just to farm vast quantities of personal data.
Ultimately BAT shows how Web3 users will likely have far more discretion over their data and how they choose to interact with their web environment.
Ocean Protocol — Sovereign and open data exchange
Ocean Protocol, is a protocol that defines standards for data exchange and trading, aimed specifically at AI data utilization. It is an expansion on the elements and ideas that are shared with Filecoin and BAT, with the goal being to tie services together to create a holistic data ecosystem for exchanging, accessing and utilizing data.
By allowing data to be freely available and exchanged in a marketplace, those willing to buy datasets can do so at more effective prices. This allows for real world increases in efficiency, which in the case of Ocean Protocol means younger, less funded AI companies will be able to acquire training datasets needed as well as largely used IOT data becoming cheaper to collect, use and manage.
Band Protocol provides solutions in all of these areas to provide sovereignty to user data and form building blocks for Web3 in the form of decentralized data governance. A framework for data tokenization, management and liquidity/issuance management for exchange liquidity through bonding curves are all available with extensive documentation and examples. Implementations will soon be live on mainnet in Q3, reach out to us if you have any questions and get started here!
About Band Protocol
Band Protocol is a protocol for decentralized data governance. It operates as an open-source standard and framework for the decentralized management of data. Build and manage off-chain oracles, reputation scores, identity management systems, token issuances and token curated registries.