For the past few months I've been building a data marketplace where people can sell or lease their personal data. Until it's complete, I'm constantly imagining what the world would look like if such a product existed and everyone used it. It's led me to some important realizations about capitalism and how we collectively achieve our goals as a society.
One surprising insight is that such a marketplace could end up looking like Universal Basic Income. More than that, it reveals a deeper truth about how humans can coordinate their actions more effectively.
Step 1: A World of Pure Imagination
First, we start with all of the data that we generate on a daily basis: Purchases, location, biometrics, etc. We are constantly generating terabytes (by today's metrics) of data each second of every day. And only a small percentage of it is captured by the apps and devices we use. Most of our location data is captured by our phones, purchases get slurped up by a variety of payment processing layers, you may wear a Fitbit or Apple watch that gets some biometric data, and so on.
Companies are currently making lots money off of that data. Where do Google and Facebook's billions come from? From data purchasers – advertisers, political campaigns, small businesses, etc. who are willing to pay a lot to access the data stores these companies have. Data stores that we have largely filled for them for years without really knowing it, in exchange for various software products like Gmail or Google Maps.
So let's imagine that instead of that data going to the companies that provide the software we use, it goes to us instead. Our location, purchases, biometrics – it's tracked in the same way, but it's stored in a location we control. Like a digital locker.
Then let's say there's a marketplace where you hook up your digital locker. All the terabytes of data you throw off during the day without any effort. And let's say everyone in the country does the same thing with their data and joins the marketplace.
Step 2: Data Is Value
Now, when someone wants to know something about you, like what you've bought recently or websites you've visited, they can pay you for it directly on the marketplace. Perhaps most importantly, they can also bundle your data with other people for more meaningful bulk data sets. It's this bundling feature that makes Google and Facebook their money. One person's data has very little market value on its own, but when it's bundled with thousands of other's, the value increases quite a bit.
By virtue of this marketplace and rerouting collection of your data into a repository that you own and control, you are now setup to directly receive compensation for any information about you that others find valuable.
You don't need to know what about you is valuable, or how much to charge, the market can now decide those things. The value of your purchase history, for example, can now be determined by how much a buyer is willing to pay and how much you're willing to accept.
With software automation, you could be licensing your data to a large amount of buyers throughout the day without having to take any action on your own. That means your bank account is growing without you having to do anything.
This is where a data marketplace starts to resemble Universal Basic Income. Except instead of the government paying you a stipend, you're receiving compensation for the real world value you create.
But wait, isn't that essentially what Universal Basic Income is? Compensation for the value that you provide to society. The reason people want UBI is because it makes our society better when more people participate and have the means to do so. It's saying, "You have value to us, so here's some money." The amount paid by UBI is just more of an estimate, a number generated by political opportunity, rather than a true market assessment of a person's value.
Thanks I Hate It
If this is starting to sound like a caste system in the making, I had the same thought. But in such a marketplace system, I don't think there's such a thing as data that's more valuable than others. One could imagine that knowing that this person over here doesn't use the internet at all could be just as valuable as knowing that this other person visits certain websites on a daily basis.
Once a marketplace is comprehensive enough, it becomes valuable to include everyone, or most people, in a dataset in order to extract the most insights. In fact, that's why the NSA and CIA are interested in bulk data collection to begin with. They want to know what everyone is doing so that they can predict what's going to happen next. The person you leave out may be the data point that completes the insight you're searching for.
Implicit Into Explicit
OK, that was fun, but let's zoom out and complete the thought experiment. Let's contrast this marketplace world with what we have now.
Right now we have companies and government agencies trying to trick you into giving up more of your data. They want a 360 view of everything you do so that they can monetize it. Getting your browsing history is more valuable if it can be correlated with your purchase history, which is even more valuable if it can be correlated with a timeline of your moods over a certain time period.
In this imaginary marketplace world, this 360 data is available explicitly to anyone who can pay enough for it. Everything is brought out in the open. The only people accessing your data are those you gave access to, and you did so under terms that work for you.
In this world, all that stands between the NSA and mass surveillance is a dollar amount. How much would they have to pay to license everyone's data in real time? I'm guessing it's a prohibitive amount, but if it's not, that essentially means that we've decided as a society that it's worth being spied on in exchange for a certain amount of money. Now we have an exact measurement of how much our privacy is worth. If that needs further legislation or regulation, at least we can talk numbers instead of gut feelings.
If you don't like this idea, I understand, but it's actually just improving something that is already happening, that already must happen. By virtue of us living in a society, this exchange of value happens implicitly. Money was invented to make this exchange more explicit, which unlocked more opportunity for use to work together and coordinate. Capitalism is the best system so far for coordinating our efforts because it makes this value exchange even more efficient.
The next stage of development could be something like this marketplace concept, which adds exponential efficiency to our efforts to coordinate towards goals that emerge from our collective movements, desires, and decisions.
1. This transaction is less of a purchase and more of a licensing fee. You still own the data but you're granting use to a client under whatever restrictions to which you both agree. This can be time boxed as well so that if they were to still use said data after a certain date they would be in violation of the contract.
2. On the horizon are even more personal data capture devices. VR headsets like the Oculus Quest scan and map our living spaces into 3D spatial data that Facebook is free to monetize however they see fit. Soon headsets will get scans of our faces while we use them to provide more realistic looking avatars. At least that's the user value provided, what the companies who sell that device to you get in exchange is a hi-res map of your face from second to second which will hone their sentiment analysis algorithm and allow them to target ads to you based on your current mood.
Here the value asymmetry really starts to be apparent. I get a more immersive VR experience and they get my face and feelings? That doesn't seem like a fair trade, or one that we should even have to make.