From Black Gold Rush in early 1900s, the following century has not seen a different kind of Gold. Several wars were around Gold from 16th to 19th century and few wars for black gold in the 20th century.
Data is the new gold
A NEW commodity spawns a lucrative, fast-growing industry, prompting antitrust regulators to step in to restrain those who control its flow. A century ago, the resource in question was oil. Now similar concerns are being raised by the giants that deal in data, the oil of the digital era.
As data is increasingly recognized as the distinctive asset in our digital age, more and more organisations are aspiring to capitalize on this new gold.
These titans — Alphabet (Google’s parent company), Amazon, Apple, Facebook and Microsoft — look unstoppable. They are the five most valuable listed firms in the world. Their profits are surging: they collectively racked up over $25bn in net profit in the first quarter of 2017. Amazon captures half of all dollars spent online in America. Google and Facebook accounted for almost all the revenue growth in digital advertising in America last year.
Such dominance has prompted calls for the tech giants to be broken up, as Standard Oil was in the early 20th century.
Smartphones and the internet have made data abundant, ubiquitous and far more valuable. Whether you are going for a run, watching TV or even just sitting in traffic, virtually every activity creates a digital trace — more raw material for the data distilleries. As devices from watches to cars connect to the internet, the volume is increasing. Meanwhile, artificial-intelligence (AI) techniques such as machine learning extract more value from data. Algorithms can predict when a customer is ready to buy, a jet-engine needs servicing or a person is at risk of a disease.
This abundance of data changes the nature of competition. Technology giants have always benefited from network effects: the more users Facebook signs up, the more attractive signing up becomes for others. With data there are extra network effects. By collecting more data, a firm has more scope to improve its products, which attracts more users, generating even more data, and so on.
We are no longer just buying things. What we are looking for is experiences — and we are paying with the data that we leave behind.
In the 21st century, there would be wars fought on ‘data’ gold. Ostensibly — it is “uncruel” with no bloodshed. Some of the world’s biggest corporations’ underlying asset is ‘data gold’. Just like oil at the center of firing the Gulf War and gold in most of the wars before, data gold has potential to result in wars of the 21st century.
Quoting from SEC filings of FaceBook in 2017, which had a global ARPU of $20.21* This is their ability to monetize data of consumers — from e-commerce marketers to political parties. Brexit and Trump were also a product of data driven campaigns of a serial entrepreneur’s company. Isn’t involuntary psychographic tactics and infringement on Fundamental rights? Getting 50 Million profiles screened and shown content to influence their decision on voting, whom to vote etc violates on the basic principle of democracy.
Digital Wealth — Mined from Billions of connected Users
Forcing to make the wrong decisions may not be as intimidating as dropping bombs or gas on civilians. The adversary here has no face/nationality or a known name. And what are the channels? Social networking behemoth or search monopoly.
So do we stop at blaming Cambridge Analytica or do we look at securing the system? Will Brian Acton’s #deletefacebook solve the problem? I think the problem is lack of responsibility and answerability to the very assets (users) who have made these organizations worth hundreds of billions of dollars in few years for the data they have shared and empowered Google and FaceBook with.
The European GDPR regulations has been a fundamental evolution in upholding internet users’ privacy. Rights to access, rights to erasure, pseudonymisation are the beginning of a movement where like the French Revolution, the people will have to rise and come out on the streets. They will have to demand when using a common key across different apps and sites, where these logs would be used, with whom this would be shared and finally right to tell the publisher “enough is enough”
Another tool of the century is tokenization. Decentralization is the new age of democratization. KYC (Know your customer) can be replaced with a ‘trust’ based distributed ledger. With privacy and security becoming such challenges, I leave you to consider the use of these technologies for the privacy and security of our future. I also see this to help the digital advertising ecosystem remain healthy and respectable.
Happy to hear your feedback and comments!
Unconfirmed. Around €400 million has apparently been seized from a Bitfinex account held with a small bank in Poland, the Cooperative Bank in Skierniewice. A well read tech focused Polish website…
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