Jim Stolze and Nicolas Lierman in conversation: How much is our personal data worth?
In this 5-part series, two innovation heavyweights go head-to-head to discuss the current and future state of affairs. AI entrepreneur and author Jim Stolze and MultiMinds’ Head of Innovation Nicolas Lierman have an in-depth conversation on innovation and technology. Part 4: how much is our data really worth?
The modern mantra ‘if you don’t pay for the product, you are the product’ rings truer than ever. Companies like Facebook and Google offer ‘free’ services that seem almost too good to be true. ‘Free’, because of course our personal data is the currency. Which begs the question: how much is our data really worth?
This pattern — of AI only working when there's what we call big data, but then using big data in order to not pay large numbers of people who are contributing — is a rising trend in our civilisation, which is totally non-sustainable.
Gentlemen, how do you feel about Jaron Lanier’s quote that it’s unsustainable not to pay the people who are contributing?
Nicolas Lierman: “If one thing’s clear to me, it’s that we don’t get enough value for our data. Why doesn’t Facebook apply a subscription fee like Spotify or Netflix? Because a subscription would cost much more than users would be willing to pay. It would be interesting to calculate how much a Facebook subscription would cost, if they wanted to create the same revenue without advertising. I would dare to wager it would be over 100 euros a month.”
How much would a Facebook subscription cost if they wanted to create the same revenue without advertising?
Jim Stolze: “I agree, although I don’t think we should get rid of advertising as a business model altogether. For many people, being exposed to ads is still an acceptable trade-off for receiving free services. Besides, you need a really big user base to make a subscription model profitable. There’s also the ‘network effect’ to consider. Plenty of initiatives for subscription-based social media start off nicely, but at the end of the day people want to be where the party is.”
Is there a way to combine the advertising model with more control over our own data?
Nicolas: “The search for ways to put consumers back in the driving seat is an interesting evolution. Blockchain technology might provide a good solution. Smart contracts are a good example. They explore ways to let companies use consumer data without owning it.”
Jim: “These are the ‘big ideas’ of 2022 and beyond. I’m very excited about the work of Prof. Eric Mannens from imec. He’s working on the concept of ‘data pods’, where you can easily and securely store your own data as well as revoke it, if you want to. Currently, the only alternative is deleting your data with each individual provider. I don’t know if you’ve ever tried to delete your data on Facebook, but it’s no easy task.”
I'm very excited about the work of Prof. Eric Mannens from imec. He's working on the concept of data pods, where you can easliy and securely store and revoke your own data.
What about the ‘right to be forgotten’? Not good enough?
Jim: “It’s good that the option is there, but it puts the burden on the users. I don’t think data privacy should be the user’s responsibility. For years, we’ve been conditioned by the service industry to hand out our personal data for free. As a result, people have lost any sense of its value. The companies that created the problem should be responsible for fixing it.”
It's good that the right to be forgotten exists, but it puts the burden on customers.
Nicolas: “I’m optimistic that we can fix it with technological interventions, such as data pods or blockchain. Take the example of smart contracts. If you’re an insurance company, you need personal data to calculate the insurance policy. With smart contracts, the insurance company would simply enter a request into the smart contract platform, which will then calculate the policy. The company has a more accurate calculation, without even seeing a slither of personal data.”
Jim: “Blockchain can certainly play its part. We’re evolving towards a system where we don’t share data, but unlock information. Let’s say you want to use a service that requires the provider to check if you’re an adult – say when buying alcohol online or subscribing to a betting service. Today you need to scan your ID to prove you’re 18 or older. Blockchain could easily answer this yes or no question without you needing to share your ID.”
Nicolas: “Decentralization is the way to go if we want to fix the system. Through shoddy anti-trust laws, we’ve allowed data-driven companies like Amazon, Facebook and Google to grow beyond what’s reasonable. They’ve created monopolies in which their power is unprecedented. Any form of competition has become completely impossible, so consumers don’t even have the opportunity to change anything.”
Jim: "Nicolas brings up a valid point. This is also why I am very excited about Web 3.0. If you look closely (beyond NFTs), you see a very strong movement towards decentralized apps, decentralized finance and decentralized organizations. I believe that is one of the unstoppable trends right now."
