Re: A Critical Look at Decentralized Personal Data Architectures
Below is our response to this position paper regarding decentralized personal data architectures and why they have seen little adoption to date. We fully agree that previous systems haven’t been able to crack the code of mass adoption leading to obscure platforms used by small groups of privacy advocates. Given the current landscape and enterprise mishaps including Equifax, Facebook, eetc., we believe the world is changing and consumers are starting to agree that change needs to happen.
The goal of DAX isn’t to build a decentralized personal data exchange for the sake of protecting personal data. The goal is to build a thriving marketplace that rewards participants by better aligning interests through significant monetary incentives that also allow users to control their data.
We fully agree with this quote from the authors:
“Offer advantages other than privacy to users. Privacy is always a secondary feature — while it might tip the balance between two competing products, users rarely pick a product based on privacy alone.”
The authors reference three types of decentralized systems that we believe encompass the flexible marketplace approach we’re building: Vendor Relationship Management (VRM) + Personal Data Stores (PDS) + Infomediaries.
Consider the economic feasibility of your design. In particular, are there entities with the economic incentive to play the various roles that are called for?
In some ways, we would consider early attempts like AllAdvantage a success. They were ahead of their time because they serviced an underdeveloped market that heavily relied on “impressions” to fuel user incentives. Even so, they were able to capture 10 million members in their first 18 months of operation. The fall of AllAdvantage was the result of a fast decline in the digital advertising space related to the .com bubble. However, they proved that users will join systems built around incentives -- much like Bitcoin miners. Today there are several billion dollar companies (Acxiom, Experian, Epsilon, etc.) and many data-based markets outside of “impressions” that are ripe for disruption.
“For an infomediary to succeed, consumers and businesses must transact through the intermediary rather than directly with each other. But either side of this market might see participants iteratively defecting, resulting in unraveling of the market.” We fully agree with this quote by the authors.
Below is a table that outlines the various roles that are called for to build a successful data marketplace today:
Pay heed to conceptual fidelity. Are you shooting at the right target? Do people have the values you think they do? Do they really want the features/benefits you claim they want?
We’re building DAX as a flexible marketplace that allows 3rd parties to develop apps that meet the values/features/benefits of consumers and brands. Our goal is to be the trust layer between brands and consumers. Imagine if AllAdvantage, Persona, Privada, and Lumeria built their features on a platform that aligned with their target users. Not everyone loves beanie babies or PEZ dispensers but Amazon and Ebay have thrived on the long-tail of consumerism.
Design with standardization in mind. Target limited feature sets.
- Our consumer UX allows individuals to Manage, Earn, and Redeem DAX. We will launch with 1 option to earn and 1 option to redeem inside our marketplace.
Today, standardization for advertising revolves around customer identity for targeting -- aka, e-mail address, phone number, etc.. For our brand partners e-mail is the most valuable channel for their marketing efforts including look-a-like targeting, retargeting, and triggered campaigns. These consumer data assets are what our system will use for standardization.
Work with regulators.
GDPR is the result of the "free internet" as we know it today. Consumers have realized that if the product is free -- they're the product -- and they're not happy about it. In this article, we break down what this means for marketers and how AddShoppers will be updated to make this regulation effortless for our clients.
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