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There has been a fundamental shift in the source of value within our economy.
In previous models, the source was labor. In the current knowledge economies it is all about attention and the ability to act. This new model is why Web2 companies value personal data so highly – with knowledge comes understanding, then prediction, then action. By understanding the consumer, companies can advertise and drive customers to action.
And make no mistake, customers are in a state of constant targeted marketing when they use Web2.
Social media, apps and even browsers are constantly collecting data to influence decisions. Every web search, every social media post, every email is mined to collect data points. Because so much of our lives have moved to the digital world, there are now endless possibilities for data collection. Algorithms can map likes, dislikes, values and more to create complete virtual profiles, which are then sold to third-party data brokers. These companies often operate in a regulatory gray area and make it difficult to opt out.
Data, identity and the ‘why’ of consumer behaviour
The implications of this are enormous. This virtual identity, or profile, is not composed of the old standard data points. It goes beyond who you are as a consumer – it defines who you are as a person. It not only defines what you do, it is able to quantify why do you do what you do.
And in turn? Much of the so-called free will can be bought by the highest bidder. Advertisers can immediately pay for the desired behavioral effect because they can now measure the results. Tim O’Reilly was right about solving the Wanamaker problem: the old saying that half your marketing is wasted; you just don’t know which half. But we haven’t covered the natural consequence yet: the better the marketing gets, the less autonomy we seem to have.
It paints a very dystopian picture. In a previous article, I discussed how the owner of your data owns your decisions, and here’s why. In a digital world, your data is youit’s your domain online. Web2 actively limits our choices by strategically limiting our options; Cambridge Analytics was not the first and will not be the last company to take advantage of these newly discovered data capabilities.
It’s a complex issue that all goes back to Web2’s incentive structure. We have built a digital world around “you as a product”. All the free, cheap and useful applications that we have come to depend on are the perfect example of this. These apps have permeated every aspect of our lives, from work to socialization — and the companies behind them know it. They have no incentive to change existing systems.
More identity verification
Solving these and other problems is the driving force behind Web3. In a Web3 owned by a user, you own your data. You can control who sees it and what is done with it, but more importantly, there is potential for you to gain better control over the algorithms and better ensure that your private data is truly privateaccessible only to you, be it emails, DMs or saved files.
It starts with decentralized identities, or self-sovereign identities (SSIs). In current web models, our digital identities are owned by our third-party devices and/or apps. This makes it difficult to manage our data as it is used and mined by so many different sources. With decentralized identities, our digital identity lives in our wallets, a single source, and users control who sees what.
For example, if we sign up for something on the Internet, we need to create an account. This applies to everything, whether you sign up for a mailing list or make a purchase. Each time you sign up for a new account, you must provide personal information to confirm identity. In the US, the average email address is: linked to 130 accounts. There is no way to keep track of your data when it has been distributed in this way. Decentralized identities allow you to control the outflow of information. By using decentralized identities in wallets, users can ensure that the only relevant information is shared and used only for authentication purposes.
Among these decentralized identities (and they can be any name and don’t need to be associated with the physical… you unless necessary) we can build a world of decentralized content and data that forms the base layer of Web3. Whether it’s a messaging app, a project management tool, the next Instagram, or the next Yelp, the content can be owned by the users and the algorithms are more likely to work for users than advertisers. You can start with a free “human” domain at https://hmn.domains and start building your digital kingdom.
Ultimately, apps and advertisers will have to work for you.
Leonard Kish is co-founder of Cortex App.
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