Data as Currency: The evolution of personal data management

In the ever-evolving digital landscape, a pressing question looms large: Who truly owns our personal data, that trail of digital breadcrumbs we leave behind in our online interactions? Is there a future where individuals take charge of their data and have the option to sell fragments of their digital personas at their discretion? Currently, large corporations profit by trading bits and pieces of your information—details about who you are, your preferences, behaviors, and even your whereabouts. In this article, we explore the concept of personal data ownership, the possibility of monetizing it, and the potential impacts on technology, economics, and society.

At its core, the notion that each person should be the “owner” of their digital exhaust makes intuitive sense. Your digital footprint, the data you generate through online activities, should be yours to control and manage. Furthermore, it’s not unreasonable to consider compensation for the use of your data for external monetization.

However, the key challenge lies in making this process easy and seamless for everyone. While the promise of Web3, where your digital wallet serves as your login and stores all your assets, sounded revolutionary, it hasn’t achieved mass adoption due to its complexity.

One potential solution could be the integration of data ownership features by smartphone operating systems. Similar to the Health app, which aggregates your medical and health information, these operating systems could grant you ownership and control over who can access your data and for what purposes.

An opposing perspective argues that consumers already “pay” with their data when they use online services. For instance, social media platforms like TikTok and Instagram offer users social connections and endless content in exchange for their data. In a free market, individuals have the choice to decide whether they want to provide data in exchange for value. Comparing services like Google search and DuckDuckGo showcases this freedom of choice.

Companies like Apple and regulatory bodies have made strides in increasing transparency in data privacy. As consumers become more aware of the data-value exchange, they will likely become more discerning about which services they trade data with. However, the willingness to exchange privacy for convenience, price, or selection will likely persist.

There exists an intriguing opportunity for innovative business models. Consider Netflix, which charges a monthly subscription fee while also selling user data to third parties. Could brands share their profits with customers, creating a symbiotic relationship? Such a model could redefine the consumer-brand dynamic, although it would likely require new regulations or competitive pressure to drive its adoption.

Web3 and cryptocurrencies are not prerequisites for implementing such models. Brands could simply reduce subscription costs or offer other incentives. Nonetheless, Web3 might provide benefits by centralizing these kickback programs within a shared identity or wallet.

The idea of “data as a currency” is gaining traction. Recent research introduces the concept of zero-party (oP) data, where customers proactively provide data and gain transparency about its use. This approach could redefine the value relationship between consumers and brands, leading to better incentives for data sharing and more comprehensive data for companies.

The research outlines four critical success factors for the oP approach:

1. Establishing fair and privacy-first relationships with consumers.

2. Ensuring transparency, ethical practices, and a focus on enhancing customer experiences.

3. Creating appropriate incentives for customers to provide oP data voluntarily.

4. Navigating the fragmentation of the oP data platform landscape for brand integrations.

In conclusion, the question of personal data ownership and monetization is a complex and evolving one. While consumers already trade their data for value, the fairness of this exchange remains debatable. New business models and data ownership paradigms could emerge, reshaping the relationship between individuals and brands. As society becomes increasingly aware of the value of their data, the future holds exciting possibilities, including the potential for data to become a new form of currency in our ever-connected digital world.

Credits: 
Sid Vanchinathan, Founding Partner & NA Regional Managing Director
Dwight Davis, Interaction Design Lead at propelland
Tracey Lin, Senior Business Strategist at propelland
Tina Tsung, Interaction Designer at propelland
Neha Kodi, Senior Business Designer at propelland
Carla Morales, Graphic Designer at propelland