Data in the digital format has evolved to be an extremely valuable and important aspect of society. Something I have not crossed paths with is the idea of the economics of data and what that could potentially look like in the future. How could our data transform into a form of currency? That’s where I have coined, whether in original fashion or not, the title of this written piece – Datanomics.
Thinking about what the economics of data could look like in the future stemmed through me from a few different angles. Those angles included 1) The problem of money, 2) The concept of self sovereign identity, and 3) The need to incentivize value in society to generate a functional exchange system.
Money as a problem falls from the tree of thought of whether our current monetary system is one of sustainability or not. Fractional reserve banking does not seem like something that can or would be sustained in time forever, and unless perfectly managed, is doomed to fail. The system incentivizes inflation and the rising of prices of consumer goods. Dollars float into the system with no real logical value tied to it other than the perspective that it exists as a need. The monetary system is not a natural part of nature, but rather a system created by the figment of somebody else’s imagination. The system is built to create growth in a sense of infiniteness through currencies and financial markets. What will the money supply, prices, and wealth gap look like in 50 years?
Self sovereign identity fundamentally seems to be the concept of users of technology being granted ownership of their own information, or data, or better yet, their digital identities. The digital profile built through the usage of tech is vast, detailed, and unknown to the user. The digital profile compiled between endless entities might be extremely inefficient as well, compared to what could be. We constantly build data as we use our pieces of tech, generating personal information for the gain of external third party organizations. We even choose to pay them for products built to grow their perspective of those who use them, seeming like a double win for the third party entity. Do we as users, consumers, or just we as people have a right to gain from our own information and identities?
Building on a theorem of money in its current form failing in a hypothetical future state, what would the aftermath of that reality look like? There is no way a barter system would be efficient or reasonably realistic stepping from the current state of the world, at least in more advanced economies. If money as currency must be replaced, something that has intrinsic value must come forth to sustain exchanges between individuals, as well as exchanges with third party entities. What could you possibly own that would possess intrinsic value, could be exchanged for goods, and would provide benefit to the other party involved in an exchange?
That is where data comes in. Consider this – you might be on your mobile device for five hours a day, generating vast amounts of information for the applications and devices you are using about your interests, needs, wants, behavior, plans, and personality of the self. All this information probably gets used more so for a marketing purpose to target information and goods at you to keep you using the tech as much as possible. The third party entity that created the device or application you are using is the one currently utilizing or selling that information gained from your use of their software.
What if you or I had a piece of hardware that put all that data and information into our own hands? What if you or I were in control of what external entities could utilize that data? The thought is that if I want to “do business” with a third party, or buy a good from them, I allow them to access my information and data in exchange for the possibility of me buying that good I might desire. I essentially exchange the access to my data for the third party’s ability to target their goods at me. I control the exchange of my data to businesses, giving them a better ability to target goods at their potential customers, contingent on the ability to create value through a personal digital profile. Through time, the amount of money I exchange for goods could decrease as the value of my data rises and that data is a part of the exchange of the good I want or need. Putting that data into our hands might eventually, in a long term process, eliminate marketing costs for businesses and lead to data being used as a form of currency. The loss of dollars to the business in the exchange is offset by the decreased need to spend dollars by the business for those targeted marketing purposes, sustaining the financial existence of the business. This is perhaps only realistically possible by the ability to create a well defined, valuable and efficient personal digital profile that is being put into the consumer’s hands. Exactly how this would work for all needs is a toss up. We will keep it high level for now.
If you jump a hundred steps ahead with this general idea of self sovereign identity and data exchange as currency, you might be able to visualize a transition to automation. Data in the future might become so valuable that a third party could predict our needs at little to no cost to them. Couple that with a system built on infinitely capable renewable energy sources, and you might find the ability to transition away from the monetary system into a form of full-fledged data-driven automation. I generate data through my behavior, then needs are automatically met. Datanomics could be your transitional economic system of the 21st century.
How to sprout this on a micro level in our current atmosphere might be the save-the-world answer to a question that hasn’t been proposed. Are these high level thoughts a realistic answer to unknown problems? Maybe. For now, we will keep on dreamin’ a vision.
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