Data sharing using the latest Web3 technologies
This is a transcript of Ocean Founder Bruce Pon’s latest talk at the MOBI Community Lecture Series. In his fourth presentation to the MOBI community since 2019, Bruce offers a deep dive into safe data sharing with blockchain technology and cryptocurrency. His lectUre also underlines the role of Ocean Protocol and its latest technical advances — safe staking and Data NFTs — in spearheading this vision.
The Value of Data
Data is an untapped asset waiting to be unlocked. With a combination of new technology, mindset changes and new business processes, this is possible. As a starting point, organizations must acknowledge that publishers need to feel safe, secure and comfortable to share data. If this is solved, then the next phase is to develop pricing signals on the data to incentivize people, reveal the value of personal data to them and get the cycle going.
My team have worked for eight years to build the tools and technologies to allow for safer data sharing and we have employed blockchain technology and cryptocurrency for this purpose. Today, the world is closer to having the pieces in place to unlock data at a large scale. The technology stack is maturing quickly and many of the core infrastructure pieces are ready to be used. With successful models of bootstrapping and new economies forming in the Web3 space through decentralised finance, non-fungible tokens and decentralised autonomous organisations, the Defi space has a total value of $3+ trillion, which is more than the value of all the startups and unicorns on Earth.
The decentralised space is moving very fast, there’s a lot of value being sucked up to it which makes data ripe for this crypto cycle. However, there are still a lot of challenges to improving the user experience. There is a need to raise awareness and educate people and streamline the onboarding process because that’s not intuitive. The need of the hour is to teach people that if they are able to put things into digitized formats using these tools, they will also be able to apply the tools of finance to make it happen.
Ocean Protocol: The key to unlocking an Open Data Economy
There are a lot of features in the Ocean tech stack that enable users to share their data and monetise it on their own terms. In Ocean’s upcoming technical release V4, these features present a whole new set of opportunities.
1. Ocean Market
The Ocean Market is the main way for people to interact with Ocean; it’s the front end application that one can access from any browser. Users can see the datasets, stake them, buy them and consume them. What Ocean will work to build soon is a pool to draw people in, whether through a wider range of useful data, bounties or request forms to allow people to ask for the type of data they’re looking for.
For data providers, the Ocean Market is open-source software that’s freely available to anyone to clone and build their own marketplace. The code is completely available to inspect and any vulnerabilities found can be fixed very quickly. In V4 the providers can set their own fee schedules for each transaction as well as price data in the currencies they want. The advances Ocean has made in the last 14 months are to extend tools, features and control to all participants and stakeholders. Ocean has also integrated both DeFi and NFTs into the Ocean Market enabling users to stake and earn transaction fees. The Ocean Market has now evolved into a more mature front end with which people can start using Web3 technologies. This includes the cryptocurrencies of Ocean, anything else that interacts with it, the concept of NFTs and decentralized finance.
The idea driving this is that Web3 technologies are future-facing; this is where the world is going to head and the ability to have a live demo that is in production, securing several million dollars worth of data and allowing people to start sharing their data is very rare. This makes the Ocean Market one of the very first data markets available using Web3 technologies.
2. Ocean Smart Contracts
With Ocean as an operating system for AI and data sharing, smart contracts are the engines driving it. They serve to enforce conditions of access, facilitate payments, execute a transaction or business logic. It is a globally shared computer that anyone can use, which allows for these transactions to happen anywhere on Earth at any time, given the proper inputs.
There are multiple kinds of blockchain networks, and Ocean interacts with all of them through smart contracts — these are the core building blocks on which all protocols live. They allow the trustless exchange of value, but also provide an audit trail on what transactions have taken place and what actions have been done. It is a very strong use case because any participant can trace back and see what happened directly on the blockchain, paving the way for automated audits and inspections — continuous monitoring of what happens to the data and personal datasets. Publishers could get daily reports on how many datasets were sold, what was done to them, and be notified of any exceptions or misuse.
3. Compute-to-Data
The third piece that Ocean built to meet the needs for people to share their data without exposing it is a reference implementation called Compute-to-Data. It offers privacy-preserving access, which means that data can be stopped from being stolen. Today, there are a host of tools being developed across the entire space, which allow for privacy-preserving computing to happen at multiple fine grain levels. This means that any type of computing on a dataset, any type of action that is run on it will still preserve its privacy. Compute-to-Data is our first cut at this and our team is working with several other entities to integrate their privacy-preserving algorithms and solutions directly into the Ocean Market. Users will be enabled to choose the type of privacy protection they want to implement on top of their services in order for them to be consumed safely. Ocean equips users with comfort and security for providing their data to meet industry demand.
4. OCEAN Token
We hear a lot about cryptocurrencies nowadays where more and more people are comfortable acquiring, holding and using them to navigate the blockchain economies. 15% of the American public apparently holds crypto and in about a dozen other countries, such as the Philippines, Nigeria, and other places that you wouldn’t have necessarily thought would be on the edge of innovation, the number of population that actually have crypto is above 20%. This is what crypto does, it invites the world in, and it allows everybody to participate. That is the positive effect of this technology.
This is where the OCEAN token comes in. It is a native crypto token for the Ocean network that helps to run the smart contracts and we use it for a whole bunch of other purposes like governance, staking rewards and bounties as well. It’s a standard for this data economy and the means of payment in the ecosystem. In the future, we are also looking to introduce other cryptocurrencies in the ecosystem. Our whole goal is to make sure that data sharing becomes easier. We do know that right now, it is mandatory that people have cryptocurrency wallets in order to interact with us but we are looking forward to easier onboarding as technology progresses.
5. Datatokens and Data NFTs
Think of it this way: if you want to play a pinball game, you need to throw in a token to play the game. The way we have architected datatokens is through the idea that one needs a token in order to access data.
A publisher could set the price of the datatoken at $100 in the Ocean Market. There’s also innovative technology that allows for tokens to be dynamically priced by the community in real-time, without affecting the data itself. If the community takes a look at the data and understands what is being provided, they can help price the data. The datatoken concept allows for a data asset to develop its own dynamic price, the liquidity behind the datatoken gives a price, people can trade datatokens speculatively without moving the actual underlying data — and at the end, because there’s a dynamic price on the datatoken, that becomes the de facto the price of the data asset. It is an interesting experiment to see how we can price data into the future, especially for data assets that we don’t really know the price for.
If one takes the datatoken concept to its logical conclusion when a dataset is so well used and so broadly traded, one could say that the dataset is IPO’ed — and it is a stock that also grants one access to use the data if one wants.
One of the things that we’ve realized in the Web3 space is that speculation and pricing are fundamental pieces to a market. In a nascent market, there is only speculation. By using this dynamic, we can start unlocking data through datatokens.
6. Data NFTs
Imagine that you have a dataset, and you’ve generated it for your doctoral research but you don’t really need the data anymore. It now turns out that an automotive company would like to have that dataset. One could generate a datatoken and hand over access to that automotive company. But one could argue that there is also the possibility of creating a Data NFT for the licensing rights to a data asset. Not only can you sell this Data NFT to the automotive company, and let them use the data but now it can also be improved and marketed.
In other words, you’ve licensed out your intellectual property for somebody else to use and monetize themselves. Think of an NFT for a car — where one essentially sells the car with the NFT — the physical object with the digital NFT. Or one can invest in licensing where the process is just granting access at a particular time to a particular data asset. Just like a song and multiple CD’s with access to it, there are datasets and a couple of NFTs to grant access to them enabling owners to monetise their data assets.
In summary, there are two approaches. One is the datatoken, where users maintain control of the data asset, watch over how many people are trading it and what the price is from a dynamic perspective. The second one is Data NFTs, where users generate sublicenses and sell them off. These NFTs are free-floating but whoever has that NFT continues to be able to access a particular dataset.
These are native, future-facing technologies that we are going to hear a lot more about. With these building blocks, Ocean gives users the tools to sell data and monetize it. Any publisher can now monetize their data using these innovative channels without any reliance on a centralized party or software as a service provider. They have full control over their commissions and they cannot be de-platformed. This allows for a flowering of innovation but also for different business models to be tried out by interested parties in order to get a data economy going.
Why isn’t data being shared more frequently?
The answer is simple: there are 100 different ways how data can be collected, but it just stays locked up. Many individuals today want to share and monetise their data however they do not know how to get started. They want to have a comprehensive understanding of the legal, safety and privacy implications involved in the process. There is a curiosity to learn, a sense of opportunity to start building new business lines and that is crucial to building the open data economy that we aim to unleash at Ocean.
We need more experiments that put small amounts of value and reputation at risk, to learn and adjust organically. Interested publishers must take that first step because no one can predict the market’s reaction. The path isn’t clear for anyone and no one knows how to package and sell the data in a Web3 world. Everyone is learning in this new environment and it is my strong conviction that we can start sharing data now only if we take some bold steps forward. Many people have exactly the kind of data that many organizations are looking for in order to enhance their services and AI capabilities and so, it becomes imperative to dive into the easiest ways to start sharing and monetising it.
The 3-step approach to getting value out of your data
Step 1 — Gather & Publish data
Gather data that you think is valuable but isn’t being exploited and monetized.
Find some data about supply chains, manufacturing, energy consumption, sensor data, warehouse data — whatever it is that you are collecting and you think has value. However, avoid anything that exposes personal information.
Find it, package it up, publish it on Ocean Market.
This allows you to get your feet wet with the tools and paradigms of Web3 — from setting up a wallet, to self-generating IDs and then using the tools available. It’s the best way to learn and demonstrate to stakeholders how to navigate the world of Web3.
Step 2 — Explore Value
If you don’t know what the data could be valuable for, issue a bounty.
You issue a bounty to the community for helping you find out what the data could be used for. It can be as simple as a $15k prize for the best ideas on how the data is valuable and could be better monetized — $5k to the top 3 winners. Ocean Protocol can also publicize the bounty with its 250,000 strong community. This bounty allows you to gather ideas from a broad swath of motivated people.
Step 3 — Get Value
Finally, if you have some burning questions and you think there might be an answer, or at least, an approach to solving the questions, you can also bounty this for the community.
Give a prize to anyone that can help you solve the riddle or question, using the datasets you published.
One example: in 1999, Goldcorp Challenge was launched by the new owner of a goldmine — he asked the global community to help him find the gold on his land for a chance to get $1m in prize money. He put up a small file of his geological data for inspection. 20 years later, Goldcorp was sold for $10 Billion and is now the largest gold mining company on Earth. All because he took the chance, opened up his data and let others help him to figure out where to dig for gold.
Data — when openly, transparently exploited, can be extremely powerful and valuable.
Through this simple 3-step approach, you can get value out of your data and incentivize a global community of data scientists using bounties. It can be a game-changer only if one takes a chance.
Conclusion
In summary, with Ocean, we have been building infrastructure to enable this kind of safe data sharing. It is there and is ready to use; we just have to get the wheel going. As part of our future Ocean V4 release, Ocean will give publishers more control, transparency and ways to monetize their data. It’s the most advanced stack of technologies in this rapidly expanding space. However, its true potential can be realized only if there is more experimentation. Imagine the discoveries that are just waiting to happen if data could be opened up. At Ocean, we will continue to support and encourage you in this journey.
Ocean Protocol is a decentralized data exchange platform spearheading the movement to unlock a new Data Economy, break down data silos, and open access to quality data.
Watch Bruce Pon’s past talks for the MOBI community via the links below:
How to Tokenize and Monetize Your Data — MoCo Los Angeles, 12 November 2019
Data Monetization for Mobility, 25 November 2020
Data Sharing Using the Latest Web3 Technologies- 23 February 2022
