Banking on The Blockchain via Monetization of Your Avatar

HELLO FRIENDS, 

THE LAST ISSUE, CAN BLOCKCHAIN STOP THE BORG?, WAS A MOUTHFUL, PERHAPS YOU’RE STILL CHEWING? FOR A SECOND BYTE, FIND IT HERE: 

I wrote about current blockchain technologies as they pertain to the protection of digital property as well blockchain’s potential for the protection of human rights in the digital sphere. I had proposed that, as humanity is expanding into the digital space, it is essential we secure all extensions of ourselves via blockchain technologies so as to preserve our individual rights to our creations, giving our--let’s call them--avatars forms that interact with other agents on our behalf.

This imagines a world where our smartphones, self-driving cars and Alexa-like devices collect data and store it without automatically sharing our lives with their corporate parents and partners. The control, our agency, is back in our hands. Users are able to choose the degree to which they are willing to share or sell their own data (including social, financial, meta data, etc.). This world would require a marketplace for exchange which bridges the physical local and remote digital communities. Further, data must be protected against third-party interference whether by governments, corporate interests, or rogue AI developed by either of the above (seriously, Terminator could happen). This means a fully blockchained community bank of sorts. 

Blockchain developers are seeing the consumer need for capturing the value of their own metadata. Web 2.0 gave everyday computer users access to their own publishing platforms (Youtube, Ubspot, Tiktok, etc.), a tool that had, until then, only been available to major media companies.

Now users are seeing additional value hiding within their everyday transactions within those platforms as well as their popular shopping venues. This value takes the form of metadata. Simple, everyday, info that is generated from transactions such as shopping, content commentary, and even calling up Google Maps GPS for directions. So far, only the major platform providers have had the tools and access to monetize this valuable data that, by all rights, should belong to the users who generate it.

In Yoram Barzel’s Economic Analysis of Property Rights, the great economist argued that property ought to belong to the owner who can do the greatest good with it. In economic terms, this means the owner who understands and is able to utilize the full extent of said property’s value. Until now, consumers have not understood the value of their digital footprints, their avatars. And so, major organizations like Facebook, Google, and Amazon have been exploiting (perhaps rightfully so) that data which should have belonged to us.

Now we understand the value of our data. So what do we need in order to capture this content, safeguard it, and have exclusive rights to monetize it for themselves? Well, a bank of course.

WHY SHOULD ONLY BANKS STORE MONEY?

To this end, I’ve seen ideas emerging about community networks of trade (that is, community banks) called Local Exchange Trading Systems (LETS). LETS facilitate the exchanges of goods and services within communities utilizing an internal currency as a method to measure value. LETS has so far only been utilized in small physical communities. However, the governance of these systems is based on some of the same governance rules as those of token ecosystems such as SingularityNet, a marketplace and exchange for AI development, or the Theta Network, a peer-to-peer decentralized video platform that allows viewers to "pay" bandwidth in exchange for creators' content and where both parties, viewer and creator, are rewarded in the exchange.

The popular governing rules of these systems are as follows: 

Voluntary participation in the community.

Transfer fees limited to the costs of system administration (e.g., gas fees).

Internal benefits for members in the validation of exchanges and transparency of the system. 

These token systems also have the ability to participate in a more global marketplace by tethering their tokens to a specific currency, be it government fiat or decentralized crypto, and allowing an external exchange with global currencies. 

It seems that, after some initial attempts, the LETS model had been abandoned, awaiting technological innovation and an application that would allow for widespread community adoption. But LETS did not have blockchain, now it does. Nor, at the time of initial LETS iterations, did consumers understand the true value of the data we were generating with our everyday transactions. Now we do.

HERE’S AN EXAMPLE

Think of a Venn diagram of community bank, Venmo, token ecosystem and fundraising platform (e.g., Patreon or Go Fund Me). For example, I’m building a community center in a rural setting. Using the LETS, I can pay the builder, who can use the tokens to pay for his supplies and equipment. I raise funds for this project via my legal work (I’m a lawyer) within the local community in the form of tokens and also through my work outside of this community in the form of BitCoin. I also use software to manage this project, creating a digital version of my real-world center which includes the data I input and the metadata I create in its usage. 

Some of this data and metadata is valuable for the internal network as a ledger for validation of funds, and it may also be valuable to the application system beyond the purposes of providing direct services. Perhaps selling a discrete unit of this metadata owned by me as the creator of this project in the XYZ Project Management application will allow me to raise further funds in the token currency of XYZ world. All of these local community and application tokens should then be convertible to a more standard unit of currency, such as BitCoin or Ethereum. 

I believe that the next generation of online technologies will allow users to capture, store, and transact their metadata. If Amazon wants to know the shopping habits of consumers in the 20 - 30 age demographic, why shouldn’t Amazon pay them for it? And blockchain ledgers, with their trustless, inalienable validation methods stand as the perfect tech for safeguarding our digital avatars.

WHY BLOCKCHAIN?

But why do we need blockchain or cryptocurrency to enable the above model? Simple. While the aggregate shopping habits of the 20 - 30 age demographic, for example, is worth millions of dollars to a company like Amazon, each individual consumer’s contribution to that data is likely worth a fraction of a penny. Assuming we could safeguard this data per consumer, how would we get Amazon to pay each consumer the value of their data? Certainly Amazon is not going to spend $3 - $15 in bank wire fees to buy $0.005 worth of data from an individual consumer! 

Blockchain powered platforms have not only the ability to do away with such transaction fees, but to automatically enable the sharding of tiny financial transactions and their aggregation into individual consumer wallets. And yes, while one particular data point may only be worth $0.005 to a given consumer, we, as consumers, generate an enormous set of data points across various industries, each having their own Amazon-like entity, that would pay good money for those points. The rewards will accumulate.

ONWARD WITH INNOVATION

I’ll look forward to watching and highlighting these technologies as they are born in 2020 and beyond--especially now in this pandemic age when responsible citizens, who want to share their health data to help the public good, need a trustless method to prevent that data from being exploited toward nefarious ends.

Until next issue, 

Yours,

T

Previously published at https://www.timbukher.com/taurus-ascending/taurus-ascending-3-monetizing-your-avatar-novel-banking-on-the-blockchain