Sites like Facebook and Instagram provide a “free” service that costs nothing — or so you think.
Scrolling your feed, liking photos and sending messages to your loved ones may seem like private activities, but in exchange for the use of these social sites, your data is being collected, analyzed and traded.
It goes something like this: You log onto Instagram and "like" photos of a particular camera you’ve been thinking about buying. A few hours later you’re seeing ads for camera gear across social media. If you click on the ad and buy the camera, a digital marketing company like Inmobi gets paid a portion of the revenue you paid to the camera company.
Such transactions are, for better or worse, accepted in our digital society, but they represent the precise dynamic that Web3 attempts to upend. In 1993, American mathematician and computer scientist Eric Hughes wrote the Cypherpunks Manifesto, an essay calling for privacy in a digital age through the use of cryptography and social contracts for the common good. “People have been defending their own privacy for centuries with whispers, darkness, envelopes, closed doors, secret handshakes and couriers.” writes Hughes. “The technologies of the past did not allow for strong privacy, but electronic technologies do.”
We are now in a time when cryptographic technologies like blockchain could be the future of Web3. Instead of consumers giving our data away freely, Web3 opens the door to letting us monetize it ourselves, or at least becoming a more active participant in the systems using our information.
First, it’s important to understand what data is and why it’s so important.
In general, data is analyzable information like facts and statistics. Personal data is information about an individual, such as their financial and medical history, dating history, political leaning, sexual preferences, shopping history, geographic location and more. Meanwhile, user data encompasses our behavior and activity, such as the websites we visit, ads we click on, brands we follow, etc.
With that description, big tech companies like Facebook parent company Meta might know more about you than your best friend. When you’re online, scrolling, liking, commenting and engaging with content, the algorithms used by these tech companies are learning about you.
Take TikTok, the popular video app: It’s able to track your data even when you’re not using the app through something called a “pixel,” an embedded tracker that helps target and measure the effectiveness of ads.
“When you buy something online,” says Matteo Titta, a go-to-market operator helping Web3 startups, “Amazon uses cookies to track your clicks across their sites and device IDs to track clicks across their apps. They are then linked back to your unique user ID creating an easier way to gather behavioral data and feed you personalized suggestions or drive product decisions.”
Data dignity — a term coined by computer scientists Jaron Lanier and E.Glen Weyl in the paper A Blueprint for A Better Digital Society — is a phrase describing a future in which humans know their worth in relation to technology. A host of alternative, arguably more dignified, paradigms exist to replace our current one: Perhaps consumers should be paid for their data contribution, utilize tools like zero-knowledge proofs to conceal data or even have a say in the direction of how social media platforms use it.
Read More: WTF Is... Zero Knowledge Proofs
The philosophy of data dignity suggests that consumers should have moral rights to every bit of data that exists. After all, we exist, and our data will go on to exist without us forever. When individuals have a say in the way our data is used, it creates a sense of ownership and pride, which opens the door for higher-quality data that can be used to train machine learning systems and provide greater revenue services. Marketers can find incentive here, as well, since better data based on actual behavior (not stereotypical demographics that correlate certain products and preferences to a person's superficial identity) equals more effecient sales.
To make data dignity work, new and existing tech companies will need to work with their users to create a free market for a decentralized digital society. For example, let’s say someone scrolls through social media and clicks on an ad that has been given to them. Because the ad was specific and met their needs, they purchased the product. The purchase wouldn’t have happened without their data, and so they too receive a small amount for the exchange.
Another example might be individuals choosing which data to share with businesses and platforms. This model gives power back to the users as the ultimate judge of value, as opposed to third parties. Weyl calls this idea for a true market economy of information, “data as labor”. In 2021, Fortune shared insights on data funding a sort of universal-based income, but this model raises questions about doing so without a centralized power.
There’s also the issue of privacy remaining accessible to all economic classes. If everyone has the ability to get paid for their data, will individuals that exist in lower economic classes be forced to sell their privacy? Will the rich be able to pay to keep it? Instead of bringing people together through ownership, some argue data dignity based on economic buying power may further the already expanding wealth gap.
Cryptoactivism was the catalyst for what we now call “Web3.” It used cryptography and encryption to protect personal privacy and shield data from big tech and government control. It was not only a technological revolution but a way of life. It started as a cultural movement, a shift in the mindset of the individual collective that stood for ownership, privacy rights and the ability to be paid for various sources of labor like data, content creation, and intellectual property.
Today, Web3 is known as a combination of blockchain technology, the Internet of things and artificial intelligence (AI). Blockchain is like a digital ledger, a record of data stored cryptographically.
Because every block of data added to the blockchain is accompanied by a hashcode, data ownership and authenticity are supported. Platforms like Facebook, Twitter, YouTube, Instagram and so forth are centralized organizations with a large amount of control over the data they acquire. Unlike Web2 platforms that were built around convenience and the notion of “read and write”, owning information wasn’t baked into the recipe. For example, when the data firm Cambridge Analytica used data from Facebook to build voter profiles, what many people don’t know is that Facebook didn’t actually violate any terms of the user agreement. With Web3, we are now rethinking our data rights and extending the definition of personal space and bodily dignity into the digital realm while learning from our Web2 mistakes.
With blockchain, the data is not stored in one location but spread across a decentralized system of servers. Because it is a digital ledger, transactions can be traced and users can determine when they want their data to be accessed. It is a chance to build data dignity into the system.
Some Web3 companies are already making data changes that might signal the shift to personal data dignity is underway. In 2022 ConcenSys, the leading Ethereum software company released its 7-day data retention plan and a redesign of its privacy policy. It stated that the company retains the user data, IP address and wallet data for a 7-day period and that they have never sold any of the user data they collect.
Meanwhile, new Web3 startups are finding solutions. Disco, for instance, allows users to bring their data with them through a concept known as a "data backpack." Similar to a physical backpack, a data backpack would travel with a user as they navigate the internet and participate in metaverse experiences.
“You can stash your private data in a way that is owned and controlled by you,” says Disco cofounder and CEO Evin McMullen. “Creating your data backpack is similar to building an online profile with components you can take with you across sites.” You have the power to decide just how much information you want to share without needing to commit all of your data to another public blockchain.
When asked where the data was stored McMullen explained, “The data is stored on Ceramic, a decentralized data network, under the ownership and control of users who get to decide where their data is stored.” The user's information is default encrypted against the owner’s keys, without controlling or monetizing the data itself.
With the popularity of ChatGPT, a language learning model that can code, write poetry and more, many people are left wondering what the future looks like. OpenAI, the company that created ChatGPT, makes regular version updates. The model runs on large amounts of data.
“Whatever you do, whether you’re a nurse, a bricklayer, or a writer,” Lanier said during his Data Dignity series. “AI and robots will probably come for your job. The little twist that we don’t want anybody to know is that in order for the AI and the robots to work, we need everybody’s data.”
Lanier also suggested that in order for data dignity to work, people would need to be paid and people would need to pay for things that used to be free, like social media sites. In 2022 Elon Musk took over ownership of Twitter and added a new revenue stream, people would pay for the blue checkmark. Surprisingly, many people paid the verification price of $8 USD.
It's too early to know with any certainty whether Lanier’s vision is far off or not. If decentralized social media platforms can create new revenue streams predicated on real value instead of data the old Web2 paradigms, there's a potential for mutually beneficial data usage. Perhaps data dignity is just around the corner.
Carlee is a content writer and copywriter working in the Web3 space. Connect with her on Twitter @carlee_writes
This article and all the information in it does not constitute financial advice. If you don’t want to invest money or time in Web3, you don’t have to. As always: Do your own research.
