Building Decentralized Economies of Trust
Data: A Valuable, Reusable, and Complicated Resource
In the digital age, we are all ones and zeros; we are represented by massive quantities of data that reflect our habits, behaviours, and characteristics. How valuable is data? In 2017, The Economist had already identified data as the world’s most valuable resource. But are claims like this oversimplifying the complexities inherent to data?
It’s easy to recognize that not all data is created equal. We live in times where false news drives political change, stolen identities wreak havoc on vulnerable populations and distort/damage financial systems, and statistical fallacies are used to skew public opinion. With an overload of information being thrown at audiences, how are we to tell what’s credible, trustworthy, or usable?
“It seems to be pretty clear [from our study] that false information outperforms true information,”
The Social Cost
It’s difficult to set a dollar value on the costs of false data. Can we estimate the cost of medical trials tainted with false data injections? The extensive use of fake news to drive political agendas, show the social, economical, and cultural effects that a tidal wave of false information can have. It’s reasonable to say that the costs can be astronomical.
We also have to consider the damage caused by the unauthorized use of data. As individuals, we have a right to privacy. Yet every time our data is used without consent, we step further away from this right and contribute to the normalization of a world in which we are under the watchful eye of pretty much anyone with the capability to grab our digital information.
Trust is Key
So how does this all tie up with a concept as philosophical as “trust”? We have established that data does not have the same value across the board. The elements that create value in data are the same as in many other products: how can I use the data, and what does it tell me once I process it? But before that lies trust. Without trust, the whole value chain of data is weakened.
Economies of trust let us find the answer to these essential questions:
- What are the sources and are they credible?
- How was the data captured?
- Are those data-capture processes hermetic?
Centralized vs. Decentralized Data Markets
From a socioeconomic perspective, data systems should not be centralized, otherwise one single flaw in the entity that owns the system results in the system’s collapse. This lack of certainty and resilience creates a risk exposure to users, and forces actors to always question whether the centralized system has been compromised. These actors end up creating siloed redundancies, e.g, side-channels and system-competitors, further weakening the centralized solution. This creates and extends negative socioeconomic externalities, further weakening the overall economic structure.
For example, most financial institutions require customers to repeat cumbersome KYC processes if they wish to have access to different products and services within the same organization, like wealth management and retail banking; these areas will comply with baseline regulatory requirements, and, because of internal policies, expand them with additional sets of data. Ultimately, both the customer and the institution incur substantial unnecessary costs, and expose themselves to risks.
Enter decentralized networks: trustless, free data markets where participants are held accountable to their actions, and can build or weaken their own reputations and the value of the data that flows or is validated through them. Such systems require the originator of data to provide consent to the use and disposition thereof, and, most importantly, maintain the right for these data originators to revoke this consent. These rights cannot be granted with any kind of verifiable certainty in today’s centralized network structures.
As mentioned above, reputation must also play a key role in establishing an economy of trust. If we go back several hundreds of years, reputation and trust were the essential pillars on which financial systems were built. Fast forward to this century, and we find a large number of instances where banks and financial institutions have betrayed that trust, but were allowed to continue operation with little consequence. A decentralized reputational merit system removes the responsibility of neutrality from vulnerable and highly influential rating agencies, and places this responsibility in the hands of users.
So What?
The Shyft Network operates as such:
3 Participants:
- A Data Owner
- A Data Validator
- A Data Consumer or User
Traditionally, the value of data can be determined by the quality of the data and the trustworthiness of the data owner. However, since Shyft is a decentralized, pseudonymous network, that data would hardly be trustworthy if trustworthiness was measured by these inputs alone. This is where Trust Anchors, acting as data validators, come in. These are regulated entities that leverage and bond their reputation as trusted sources and validate the data received from data owners, adding value and context to the data, as well as to the network as a whole. A free data market is thus created as validators join the network, incentivizing the maintenance of the quality and reliability of the available data, and adding layers and layers of context to each data point.
This context, aggregated from data owners and Trust Anchors of all types, is what turns “data” into “information”, and ultimately gives it value beyond the value of data we have today.
Potential Use Cases
There are a number of potential use cases that can be developed in decentralized economies of trust, for example: decentralized finance, medical record management, and referral programs.
Decentralized Finance
In the world of decentralized finance, the aim is to improve on aspects of the current financial system through the introduction of decentralized layers. Ideally these layers will work to disintermediate non-required intermediaries, optimize the value chain, and solve global problems such as unequal access to finance and financial censorship. There is huge demand for decentralized products that require trusted personal data as inputs, such as decentralized exchanges (DEXs), cross-border payments solutions, and compliant capital raising methodologies such as STOs and ICOs.
Medical Record Management
Shyft can be of tremendous value in the ever changing way healthcare is delivered and records are managed.
A study recently conducted by Global Market Insights estimated that blockchain in the healthcare sector will be worth over $1.6 billion in the U.S. by 2025, based on current government investments and initiatives in the area. The study highlights interest from governments based on the significant improvements blockchain can have on healthcare data management, security, and digital record sharing.
In 2018, data exchange and interoperability represented 40% of the total health care market. Data exchange and interoperability encompasses collection and analysis of data related to regulatory, patient identities, existing health segments for reuse, and maintaining the security of the flow of information.
Momentous growth opportunity is also prevalent in the areas of flexibility and management of the vast data points regarding drug store inventory and patient record accounting. The Shyft Trust Anchor ecosystem and infrastructure are designed to support the secure transmission of data, reduce silos of data, decrease the need for replication of data, and create auditable trails of activity, substantially improving inventory management.
Referral Programs
In our current time, we are faced with media saturation, with ads bombarding consumers to the point of exasperation. A referral from a trusted source can cut through all the noise. By leveraging the distributed consensus methodology enabled by blockchain technology, trust within a group can be utilized to improve the referral-making process.
Trusted data gathered by rewards programs is hugely valuable, since the supply chain of the data is intact and the integrity of its chain of custody maintained. Thus, it is possible to leverage this trusted data to create referral models, that in essence are verified, inclusive, and transparent, unlocking further value in the supply chain and the end-users.
By being at the forefront of an economic cycle of prosperity as these new use-cases for this trusted data are coming to life, Shyft Network is creating a new paradigm that can be customized and fit the ever changing ways and the benefits that blockchain, and cryptography can bring to the betterment of society and its systems of organization and service delivery.
This piece was written by Shyft Network International COO, Juan Aja.
Shyft Network aggregates trust and contextualizes data to build an authentic reputation, identity, and creditability framework for individuals and enterprises.
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