What if Facebook, instead of tracking data from us secretly, takes permission to use our data and pays us for that data? It’ll be awesome right? If we all get paid for using Facebook (technically for viewing ads) then scrolling the feeds at least won’t make us feel like we are wasting time.
After all, we will be getting paid for wasting time (or giving our valuable attention to the ads) which then probably won’t seem like a waste of time.
Now, the question is why the hell should Facebook pay for us just for viewing the ads? The simple answer is because it’s our data and it’s our attention that we are giving away.
In this article, I’ll be talking about the problem with the current economic model of data sharing (free, we are not getting paid) and how web 3.0 can solve this problem, probably.
The Problem
Many web 2.0 companies, especially social media companies are using our data to generate revenue. Take the data for free. Target the users with the ads by taking money from the advertisers.
Here is what Chris Dixon has to say on the take rates of social platforms:
“Social media platforms like Twitter, Instagram, and TikTok have take rates of 100% — they don’t share any revenue at all with creators! That’s been great for them but bad for users.”
In 2019, Facebook made $29.25 from the average monthly active user (MAU). That’s the global average. Now, how much money did a user get from Facebook for participation in the attention game? Zero.
There are no incentives for the users who participated. No, actually there are. We do get to use the tools and services for free. Google maps, Instagram updates from celebs, Daily snaps from friends, chatting with friends, tweeting news and memes, etc.
Data is what brings huge revenues to many companies and I think it’s fair for users to get more than just a tool for free.
As they say, if something online is free, you’re not the customer – you’re the product.
Jonathan Zittrain
Now you might be saying..”Well, I’ve never clicked on an ad anyway, so it’s not fair for Facebook to share the revenue with me”.
I don’t see any ads related to women’s wear on my Instagram because the algorithm knows that I am a man. And I see ads related to T-shirts on google because it (the algorithm) knows that I am interested in buying Men’s T-shirts.
And yes, I rarely click on those ads.
But those impressions (ads I see on the platform) will plant a thought in my mind and that can eventually influence my buying decision. Netflix people will call it “The Social Dilemma”.
If social advertising isn’t profitable for brands then why would they run ads, and how come Google, the company with a near $1.7 trillion market cap generated 80% of their revenue from just ads?
Jennifer Zhu Scott in her TED Talk on why we should get paid for sharing the data said:
“7 of the top 10 most valuable companies in the world are tech companies that either directly generate profit from data or are empowered by data from the core. Whoever owns the data, owns the future.”
Data is the Oil and attention is the currency when it comes to marketing. But unlike Oil, a data set can be used as many times as they want with little or no effort.
I receive many calls from credit card companies asking me if I was interested in taking a new credit card or a loan. I’ve never signed up for these kinds of calls but I still get them.
Someone (to whom I gave my date willingly) should have sold my data to these credit card companies and banks for a profit.
It’s my data (phone number) but someone else is getting paid (for using/stealing my data and selling it) and whereas my attention(time) is being wasted.
Now, do you see the problem?
The incentive problem. I am paying my attention but I didn’t get anything in return.
There are a few web 2.0 companies like Digi.me and UBDI (Universal Basic Data Income) that are trying to solve this problem. And there is a browser called Gener8 that is trying to reward points for users who view their ads and can redeem the points to buy products.
Now let’s get to the web 3.0 stuff.
Data Sharing & Web 3.0
81% of US adults continue to believe they have little to no control over the data collected.
But with Blockchain Technology users can retain control of their data. How?
Also Read: A Basic Understanding Of Blockchain
Since this technology is run by people, basically computers from multiple locations in the world, it’s hard to temper the data. And moreover, users will have the power to share their own data to whomever they want, wherever they want, to the extent that they want to.
And most importantly they can see on the blockchain how their data is being used.
Don’t ask me how. It’s the technology and developers that can make this happen which in web 2.0 will become a company that will be led by a founder.
But in web 3.0 it becomes a DAO, also called Decentralized Autonomous Organization which will be governed by a community organized around a specific set of rules enforced on a blockchain.
Everyone gets to make a decision and can vote if part of a DAO.
I think I got way too off from the main point just to give what you can expect from web 3.0…
But the point is everyone gets their incentives (crypto tokens) for doing their part. And “sharing personal data” will be a task that each member will get paid if they are willing to share it.
In the end, it comes down to an individual’s personal choice. Users will have the freedom whether or not to share their personal data and better data is just a byproduct of better incentives.
Now all of this is easier said than done. And it’s way too early on how this will end, but there are already a few web 3.0 tools and protocols trying to solve the data-sharing problem that we currently have. Brave Browser ($BAT), Fractal ($FCL), & Ocean Protocol ($OCEAN) are some that I’ve heard of.
And here is a simple example that Júlio Santos, Co-founder and CTO of Fractal Protocol gave on why data has more value than we can think of.
“Every year more than 1 million people die in road accidents. Picture how much faster self driving technology could be developed if you securely share your driving data and being paid for it while doing it.”
Now, that’s probably something.
Conclusion
Tons are data are being generated while you are reading this and all of data is being created by us, users. And it is being used by the companies to optimize the platforms and generate better revenue for advertisers. But nothing for the users, as of now.
A good economic model for sharing the data will be created over time and people who voluntarily give their data will get incentivized. And I believe web 3.0 is the way for that.
Show me the incentive and I’ll show you the outcome.
Charlie Munger
Data is an asset and every time someone needs it from the users, they probably should pay the users.