Using the technology Swiss firm is creating the first spot market for data by turning user and device generated data into tradeable assets
Datum engages blockchain to tap social media privacy concerns
After the scandal of data misuse involving Facebook and Cambridge Analytica in the last US presidential elections and in the Brexit referendum, it is clear that our individual data or ARPU (average revenue per user) is valuable and companies are willing to pay huge amounts to get at it.
Data is the new oil, as the British mathematician Clive Humby said in 2006, which is why Facebook paid the equivalent of $30 for each of the 600 million WhatsApp users and the same amount for each of Instagram's 33 million users when it bought both companies - WhatsApp for $19 billion in 2014 and $1bn for Instagram in 2012. Microsoft paid even more for the professional network LinkedIn in 2016, a whopping $26.2bn, when LinkedIn had 433 million registered users, of which 100 million were considered active users per month, which means the price per user worked out at $260.
Strategy&, a unit of PwC, estimates the revenue from commercialising data in 2018 will hit $300bn.
In light of the recent scandal, some firms are trying to redress the balance. Datum is a Swiss company with Hong Kong operating headquarters that wants citizens to retake control of their individual data through smart contracts made in blockchain. Datum is creating the first spot market for data by turning user and device generated data into tradeable assets. This technology allows anyone to securely and anonymously back-up structured data from social networks, wearables, smart homes, and other IoT devices. Datum provides a marketplace where users can share or sell data on their own terms, the company says.
The Datum network allows anyone to store structured data securely in an decentralised way on a smart contract blockchain. The DAT smart token enables optional selling and buying of stored data while enforcing data usage rules as set by the data owner, according to Coinist.io. The Datum network aims to provide entities such as researchers, companies or individuals the most efficient and frictionless access to data while respecting the data owner’s terms and conditions. By becoming a dominant data marketplace Datum aims to revolutionise the existing data market where data creators are rarely paid for the data and the monetisation happens by middle men who do not add any value.
The firm calculates personal data values based on the ARPU of each company from which the data is offered by the user (Facebook comes in at $4.02 per user in Middle East in 2017, according to the portal statista.com). DAT tokens' value is pegged to that of digital currency Ethereum Project's Ether (ETH), and 1 DAT equals 0.00004 ETH (or, 1 ETH equals 25,000 DAT).
“We have completed our public sale [of DAT Tokens] on November 2017. We have collected 15,795 Ethereum tokens, which would be $8.6 million at today’s prices,” says Theo Valich, head of Business Development at Datum.
“While DAT tokens can be earned on the Datum network alone, we have enabled purchase or sale of Datum's [DAT] tokens on international exchanges," he says. "An individual or company can purchase and sell DAT tokens on seven exchanges globally. Upon withdrawing DAT tokens from the [Datum] app and shifting them on to an exchange, a user can indeed redeem DAT tokens for money,” Mr Valich says. Datum will be offering in the future a seamless and service for transferring or earning Datum token into the Datum app, he says.
Regulators, meanwhile, have been tightening controls regarding the data of their citizens. The European Union GDPR law (General Data Protection Regulation), together with the Directive on the Processing of Personal Data for the Purpose of Crime Prevention, wants to protect their citizens´ data. It was approved in 2016 and will come into force on May 25. Organisations must demonstrate that they have implemented a system or program that allows them to achieve compliance. The maximum fines for non-compliance of up to €20 million (Dh91.2m) or 4 per cent of an organisation’s worldwide turnover. According to the GDPR law, any company or organisation treating data of EU citizens, if they offer goods or services to, or monitor the behaviour of, EU individuals are subject to the act. It applies to all companies processing and holding the personal data of subjects residing in the European Union, regardless of the company’s location.