Understanding Digital Ownership

Owning something is an idea that goes way back in time, traditionally linked to physical items we could touch, see, and pass on. Nowadays, the digital era is changing this idea and what it means to “own” something.

The Shift from Physical to Digital

The Illusion of Ownership

We no longer live in an era where buying music means having a physical CD in your hands. Now, purchasing media often means renting it under strict conditions. For example, you might pay for a movie on Amazon, but the fine print warns that it could become unavailable due to licensing restrictions. This raises the obvious critical question: “Do you really own what you buy online, or is it just a long-term rental?”

The incomparable convenience of digital files and streaming services is definitely not something we will give up. Platforms like Spotify and Netflix have changed forever the way we access music and movies — we get instant access to tones of libraries of content right at our fingertips

So what Exactly is Owning Your Data?

We have to agree that the concept of “data ownership” is quite complex. And this complexity comes from the many aspects involved in understanding personal control over digital information — owning the content you create or having rights over data others collect about you, like browsing habits or medical records.

Should data be treated as property? Ownership might make sense for some data types but not others, like aggregate data versus personal data. The idea extends, of course, to whether individuals have rights over data collected about them, such as the right to know, access, or request deletion of this data.

Data like medical records are usually collected with explicit consent and governed by specific laws ensuring privacy and informed consent. On the other hand, when it comes to browsing data, for example, it’s often collected without clear consent (though regulations in recent years require websites to seek user agreement via cookie policies). This consent, however, is often superficial, with users accepting terms they barely read in a haste.

Now we have privacy laws like the GDPR and CCPA meant to enforce the mentioned rights (the right to know, access, or request deletion of data) and ensure transparency, consent, and control over data usage and storage. They mandate that users can access their data, limit its usage, and request its deletion, balancing these rights against other considerations, such as freedom of expression. For example, public figures can’t always demand the removal of unflattering news articles, but they can request the deletion of their browsing data.

In recent years, there’s been a new concept that marked a new direction in the digital world. And this direction has tremendous social and economic implications. The concept emerged from new technological advancements — we call it WEB3. In this new digital space “owning your data” also implies the right to monetize it. Concepts like data dividends suggest that individuals could profit from the data collected about them. This raises questions about the balance of rights between data subjects and collectors, especially regarding the resale of data.

Basically, data ownership covers a wide range of rights, including knowledge, consent, access, usage limitation, destruction, and potential monetization. The debate continues on how best to balance these rights in a digital age.

Digital Ownership with Blockchain

The shift from selling physical goods to licensing digital content has really changed what it means to own something. Our digital is becoming increasingly connected to the concept of Web3 — dubbed as the next evolution of the internet and characterized by decentralized networks and blockchain technology which enabled user-centric platforms and applications with enhanced security and data ownership. Blockchain technology was seen as a way to attract investment and prove that people want true digital ownership. It also offered a solution to worries about copying and distributing digital content without permission. However, recent blockchain projects, like new cryptocurrencies and NFTs, have often been more about making a quick buck or even scams. Instead of creating a solid example of how digital ownership could work, these schemes have hurt the reputation of blockchain and made it harder to build a real legal framework for owning digital stuff online.

While words like “technological revolution” have been thrown around a lot next to “blockchain”, the fact is, blockchain is indeed revolutionizing the concept of fractional ownership as it allows people to own parts of valuable assets like real estate or art, which in the past were accessible only to those who could afford the entire asset.

Blockchain allows assets to be split into digital tokens, each representing a fraction of the whole. These tokens can be bought and sold on blockchain platforms, enabling a broader range of investors to participate in asset ownership.

Key Benefits of Blockchain for Fractional Ownership

• Transparency- Blockchain provides a clear and unchangeable record of who owns each token, making the ownership of digital assets easy to verify and trace.
• Security — Transactions on the blockchain are secure and immutable, meaning once ownership is transferred, it cannot be altered or tampered with, ensuring the integrity of the ownership record.
• Liquidity — By allowing fractional ownership, blockchain makes it easier to buy and sell small portions of assets, increasing market liquidity and making it easier to trade these tokens.
• Accessibility — Blockchain technology makes it possible for people to invest in high-value assets that were previously out of reach, either due to high costs or other barriers, thus democratizing investment opportunities.

Core Elements of Digital Ownership

While blockchain technology seems to have established the technological fundamentals of modern digital ownership through transparency and security, we have the non-fungible tokens (NFTs) to showcase how this technology can create unique, indivisible digital assets. Unlike cryptocurrencies such as Bitcoin or Ethereum, which are fungible and can be exchanged on a one-to-one basis, each NFT is distinct and cannot be directly swapped with another. This trait of uniqueness makes NFTs ideal for representing ownership of one-of-a-kind digital items like art, collectibles, and virtual real estate.

Most of you familiar with NFTs probably still remember when they’ve made headlines for turning digital art into shockingly valuable assets — remember when Beeple’s “Everydays: The First 5000 Days,” sold for a staggering $69 million. The sale was both an indication of the financial potential of NFTs and also of their ability to verify and protect digital ownership​ (Semrush)​​ (Gartner)​.

Non-Fungible Tokens (NFTs)

NFTs are, basically, unique digital assets authenticated through blockchain and guaranteeing they cannot be duplicated. Platforms like OpenSea and Rarible have made it easy for artists to sell their digital creations directly to a global audience. This increased accessibility and provided artists with the chance to receive royalties on resales (and exemple here being the success of NBA Top Shot in trading digital basketball highlights)​​.

While NFTs have gained a somewhat stained reputation at times, we can’t deny that they’ve also opened up new possibilities for artists and collectors alike. Platforms such as OpenSea enable artists to reach global audiences directly, bypassing traditional galleries. The result was a sort of democratizing the art market, providing continuous royalties for artists, as seen with digital artist Pak, whose works have fetched millions​ (Deloitte United States)​.

In gaming, NFTs made possible for players to own and trade in-game assets — this created new economic models. Games like “Axie Infinity” and “The Sandbox” enticed players with the chance earn real money through gameplay and trading, blending entertainment with investment opportunities​​.

Decentralized Identity (DID)

Decentralized Identity solutions are meant to empower individuals by giving them control over their digital identities. Microsoft’s Azure Active Directory, for instance, allows users to manage their identities securely and independently, reducing reliance on centralized entities and enhancing privacy​ (Gartner)​.

Smart Contracts and Digital Twins

Smart contracts are blockchain-based programs (codes) that automatically execute actions when certain conditions are met. This means intermediaries are no longer necessary and that the parties involved don’t need to know or trust each other personally.

Smart contracts can handle a variety of transactions, far beyond traditional contracts. For instance, they can automate payments in a construction contract when a project milestone is reached, buy stocks automatically when prices drop to a certain level, or process insurance claims when predefined conditions are met. These contracts are coded with “if…then” logic, ensuring that the agreed terms are precisely followed.

In essence, smart contracts streamline and secure complex transactions across various fields like construction, finance, insurance, and more, making them highly versatile and reliable.

Virtual Real Estate: A Digital Gold Rush

The metaverse is evolving beyond gaming and social interactions into a thriving market for virtual real estate. As digital spaces gain value, the concept of owning and investing in virtual properties is rapidly growing. Virtual real estate implies, as the name suggest, digital land or properties in virtual worlds, metaverses, and decentralized platforms. These spaces, powered by blockchain technology, enable users to buy, sell, and develop digital assets using NFTs as ownership tokens. Virtual real estate is booming on platforms like Decentraland trying to offer unique opportunities for digital investment and development​.

Could the development of CBDCs boost Bitcoin? The value of virtual real estate stems from its scarcity and the appeal of digital ownership. Like traditional real estate, virtual land has a limited supply, driving up its demand and value. Transactions typically occur in cryptocurrencies like Bitcoin, Ether, or proprietary tokens from specific platforms.

For investors, this represents a dual risk/reward scenario. They invest in crypto, subject to value fluctuations, to purchase virtual real estate, which also fluctuates in value. Despite the risks, it offers portfolio diversification, with rising demand for virtual land fueled by the growing metaverse user base and platforms. Investors see significant long-term potential, with the metaverse market projected to reach $507 billion by 2030, according to Statista, with major growth in the United States, China, and Japan.

SourceLess: Developing Solutions for the Future of Digital Ownership

SourceLess is a blockchain company focused on solving major current digital problems and redefining digital ownership. Through its flagship product, STR Domains, the company offers a secure and decentralized approach to managing digital assets, ensuring transparency and control. By integrating advanced blockchain technology, SourceLess makes it easy to verify and transfer ownership of digital properties, creating a more accessible and reliable digital environment.

STR Domains are designed to provide users with seamless management of their digital assets, enhancing security and ownership authenticity in the Web3 space. This technology empowers users to fully control their privacy, online presence and branding potential.

Discover how at SourceLess and STR Domains.

Additional references:

• Deloitte Digital Media Trends 2024
• McKinsey Tech Trends 2024
• Gartner Emerging Technologies and Trends 2024
• Semrush Digital Trends 2024