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Given the public outcry over the lack of data privacy in today’s digital world, it’s perhaps no surprise that tech innovators are working on new privacy solutions that can help to bring together the buyers and sellers of personal data in a way that is convenient, transparent, secure and fair. One solution that’s getting a lot of attention these days, for example, is the personal data marketplace powered by blockchain technology. But is this data marketplace really the right direction for data privacy?
The rise of the personal data marketplace
A personal data marketplace is simply an online destination where buyers of data (usually big corporations) are able to transact directly with consumers willing to part with some portion of their personal data. The idea is simple: corporations are already monetizing users’ personal data anyway, so why not at least compensate consumers for using their data? In theory, an online marketplace is the most efficient marketplace to buy and sell data, and will “reveal” the true price of user data.
The personal data marketplace concept is important because it recognizes that all user data has some value attached to it. For example, who wouldn’t want to monetize some of the data that they are sharing via social media platforms like Facebook? Or monetize some of the data that they are sharing with healthcare or financial services providers? Presumably, very sensitive information – such as one’s annual income or amount contributed to a particular political campaign – would carry much greater value than other types of data (such as one’s age or gender). In a perfect world, very efficient data exchanges would arrive at the “fair” price for user data.
When these personal data marketplaces are constructed using blockchain technology, it helps to avoid some of the problems currently encountered in today’s digital world – such as the widespread problem of one’s personal data getting hacked. With a blockchain-powered personal data marketplace, all data is fully encrypted, and the only people with the “keys” to decrypt this data is the consumer. Therefore, if a consumer doesn’t want a particular corporation or advertiser to purchase data, then all that’s needed to do is not hand over the key to the data to that corporation.
The pros of personal data marketplaces
What’s particularly elegant about this personal data marketplace solution is that it is fully GDPR-compliant. In other words, the ability to (literally) “throw away the key” is the same as the “right to be forgotten.” In a perfect world, a user could prevent all personal data from ever being used, by anyone, simply by never handing over their encryption keys.
Moreover, the allure of the personal data marketplace is that is empowering for the end user. You can literally choose which corporations get your data, and which don’t. By having control over the data sources, the data buyers and how they sell data, consumers don’t have to worry about shadowy data brokers getting access to their data via unscrupulous means, or machine learning algorithms processing their data in a way that was never intended.
And there is one other big positive for personal data marketplaces – they enable consumers to “monetize” their data. In short, they get paid for their data. If you buy into the argument that “Big Data is the new oil,” then this makes a lot of sense. Just as commodity exchanges exist to buy and sell oil in a transparent, convenient and efficient way, shouldn’t the same type of mechanism exist for personal data? Data buyers wouldn’t have to worry about scrubbing all the unstructured data out there, and data sellers would no longer feel like companies are profiting from their data without sharing part of the profit with them.
