Data Marketplaces: A Solution for Personal Data Control and Ownership?

Abstract

Data sharing is critical for advancing research, commercializing technologies, and informing people. However, data owners have been reluctant to share data due to concerns about data control, access, and a lack of secure data storage solutions. Frequent data breaches have also led to a lack of user trust in businesses. Despite widespread recognition of user concerns, few steps have been taken to empower users. While there are models for decentralized data sharing, the question of how to incentivize these structures to enable data sharing at scale is largely unexplored. This work discusses the potential of blockchain-based data marketplaces to empower users by giving them more control over their data and bringing transparency to the data-driven ecosystem.

1. Introduction

In the current digital age, data are becoming increasingly valuable. Advances in digital technologies and the so-called “digital transformation” are already producing a massive amount of digital data [1]. According to a report by International Data Corporation [2], digital data will increase from 33 zettabytes in 2018 to 175 zettabytes by 2025. A large portion of such data is generated by digital devices, such as sensors embedded in smart devices [3], homes, factories, and cities [4], as well as during users’ online activities, where a large amount of data is collected and processed by companies [5]. All of these data have transformed the way our cities and businesses operate. The distinct nature of user data makes them a valuable asset that can be combined with other data sets to provide deeper insights and added value. With the ever-increasing number of data sources, there has been a data deluge, resulting in an ongoing debate about data control, data rights, security, user data privacy, and the obligations of corporations that exploit user data, among other things [6]. Here, the term “data deluge” refers to the vast amount of data that must be handled and managed [7], “data rights” encompasses the legal rights related to data, such as the right to access, use, and share it, and “data control” refers to the ability to manage and regulate the use of data [6,8]. According to a recent study by IBM, 81% of users feel more concerned about how their data are used online. However, at the same time, users are sharing their data with big tech corporations by simply clicking the consent boxes, resulting in a “privacy paradox” [9,10].

Over the years, there has been a lot of research into developing technologies that can improve data security, for example, encryption, authentication, intrusion detection, etc., [11]. Blockchain is one of the most notable technologies that has been developed in recent years to improve data security. Blockchain is a distributed database that keeps track of a growing list of records known as blocks. Each block includes a timestamp as well as a link to the previous block. Immutability is a key feature of blockchains, which means that once data are written to a blockchain, it cannot be changed or deleted [12]. This makes them ideal for storing sensitive data such as financial transactions or medical records [13]. There have been several high-profile hacks of centralized databases where large amounts of personal data have been stolen or leaked [14]. With a blockchain, there is no centralized database to hack. Instead, the data are distributed across a network of computers, making it much more difficult for hackers to access. However, there have been instances where Blockchain has been found to be vulnerable to attacks such as phishing and Sybil attacks. Despite this, blockchains are widely regarded as more secure than other types of databases because they can ensure data integrity and prevent unauthorized access. Furthermore, there is a wealth of ongoing research on preventing such attacks using approaches such as a hybrid Proof-of-Work and Proof-of-Stake approach [15], as well as Proof of Personhood protocols [16].

Despite advancements in data security and privacy, as well as debates over how users receive valuable services in exchange for their data, users continue to have concerns about data control and ethical use, exacerbating their lack of trust in technological infrastructures [17]. Although many potential solutions for simplifying data governance, safeguarding user data, and restricting third-party access have been discussed over the years, one question continues to reverberate throughout the user community: Why is it that users who contribute data cannot have the rightful “ownership” [18] and decide where the data will be stored, who will be able to access and use it, and for what? Furthermore, there has been little discussion about how users can benefit from the wealth generated by their data. This necessitates the creation of frameworks that facilitate data ownership, encourage equitable access, and allow users to profit financially from their data.

This work discusses the potential of blockchain-based data marketplaces to empower users. Here, user empowerment is defined as the ability of users to make informed decisions about their personal data, including the ability to control how their data are used and shared. The study identifies three areas where user empowerment can be increased: (1) by providing more transparency about how personal data are used; (2) by increasing the user’s control over their personal data; and (3) by ensuring that users receive fair value for their personal data.

2. Giving Users Control over Their Data

Data have become one of the most valuable commodities in the world. Companies are constantly collecting data about our online behavior in order to sell it to advertisers or use it to improve their own products and services. The use of personal data has become increasingly commonplace in our digital world. From social media to online shopping, businesses are collecting data about users’ preferences and behaviors. This information is then used to target the users with ads and content, or is even sold to third parties. While some people are comfortable with this trade-off, others are concerned about the loss of control over their personal data. As a result, users have little control over how their personal information is collected or used. A data marketplace that allows users to access, control, and trade their own data could be one potential solution to this problem.

What if users could control and monetize (Here the term “monetize” refers to the process of generating revenue from data [19]) their data by trading it in a dynamic data market that not only allows users to trade their data but also establishes quality assurance, control, and data trading guidelines for companies and users to adhere to? This can be accomplished by establishing a blockchain-based data marketplace in which businesses and other organizations can interact with data producers and trade data. Such a marketplace (shown in Figure 1) would allow individuals to trade their data directly to data consumers, without the need for a third-party intermediary. It would be similar to a stock exchange, except instead of trading shares or stocks, users would be able to trade their data. Furthermore, because it is their personal data, they would be able to trade it with multiple data consumers while still maintaining ownership of their data.

The data marketplace would function as follows:

• Data producers (the entities or individuals who create data) would create a blockchain account and store their personal data on Blockchain. They will also create a smart contract that defines the terms of how their personal data can be traded with data consumers. In addition, it is also possible for the data producers to create a data pool that can be dynamically updated. The data pool would come with the contract terms, including the start and end dates, and any automatic renewal periods, in a blockchain-based contract. This allows for the terms of the contract to be easily verifiable and enforceable. By creating a decentralized and tamper-proof ledger of personal data, blockchains could create a new market for trading data that is more efficient, transparent, and secure.
• A data valuation model that considers the demand and supply of a specific type of data would determine the value of data. Personal data valuation is critical for a number of reasons. For starters, it would allow people to make informed decisions about how their personal data are used. Second, it would help organizations set appropriate prices for products and services that use personal data. Finally, it would help individuals and organizations negotiate better terms for personal data use.
• Companies, individuals, and other organizations would be able to browse the marketplace and search for the data they want to buy. As data consumers, they would be able to access a preview of data to understand the type of data and other relevant details.
• While sending a data trade request to the data producers, the data consumers would be required to declare the intended use of the data in order to provide users with a better understanding of how their data would be used.
• When the data producer approves the trade request, both parties sign a trade agreement, and the trade is completed. Following that, the data consumer will be able to download the data set from Blockchain and pay the agreed-upon price to the data owner.

This system has a number of benefits. To begin with, it would allow users to monetize their data, which they are currently unable to do. The use of smart contracts will allow for transparent and efficient transactions. Secondly, it would create an open data market, allowing companies to buy the data they need to improve their products or services. The data marketplace can also be used to improve the quality of data. For example, a company could use the data marketplace to improve the quality of its datasets by buying data from multiple sources. This would improve the quality of their services. Finally, it would establish data trading guidelines to help ensure high-quality data are traded fairly.

3. Opportunities, Challenges, and Future Perspectives

User-generated data have enormous potential to address the critical challenges faced by our society. While users are already doing their part by sharing their data with multiple data consumers, the process can be made fairer and more engaging by giving them the ability to control and monetize their data. By giving users the ability to trade their data, they can control who has access to it and how it is used. In this context, blockchain technology can be used to enable users to securely and transparently store and manage their data on a decentralized platform. Users can specify the conditions under which their data can be accessed and used by data consumers using smart contracts, and they can also receive compensation for the data they provide. This gives users more control and ownership over their data while also ensuring a fair and transparent data-sharing process. They can also choose to only trade data that are non-sensitive or that they feel comfortable sharing. A fair and transparent data trading platform also allows businesses to access the data they need while also providing a revenue stream for data producers. The ability to trade data gives the users more control as they can independently decide if the compensation they are receiving for their data is appropriate or not. If not, they can trade it with another data consumer. Such an approach could radically overhaul the ineffective data access and control system. The transparency of a data trading platform would allow for fair data use practices, appropriate compensation based on data quantity and quality, and stronger public–private partnerships.

Data marketplaces have the potential to radically change the way we control our personal data. Setting up a data trading platform is one thing; bringing users to use it is quite another. When there is active trading in data marketplaces, it will appeal to a wide range of stakeholders. One of the most difficult challenges in implementing such an idea would be persuading users to use a data trading platform. This problem could be solved by regulating the data platform, which would promote a fair and successful data marketplace. Standardized regulations, fair data valuation models, and appealing incentives will be critical to the system’s success. Such regulations, as well as an enforcement system, are, however, required for a fair and thriving data marketplace. Another way to encourage users to use a data trading platform would be to make it as easy and convenient to use as possible. The platform should be designed in such a way that it is intuitive and user-friendly. It should also be able to handle a large volume of data trades without any issues. Another way to encourage users to use a data trading platform would be to offer incentives, such as discounts or rewards, for using the platform.

The data marketplace concept is still in its early stages, but it has the potential to disrupt the current data ecosystem, which is dominated by a few large companies. These companies have been able to amass large amounts of data due to their size and position in the market. However, with the data marketplace, individuals will be able to trade their data directly to companies, which will create a more competitive market for data. The data marketplace has the potential to create a more fair and efficient market for data by giving individuals more control over their personal data, which is a valuable commodity in today’s world. In addition, a data marketplace can help to level the playing field between large companies and small businesses by providing small businesses with access to data that they would otherwise not have. This can help to create a more competitive marketplace and provide users with more choices in the products and services they use.