In part 1 of my Covalent Protocol technical deep-dive series, I discussed the integration of a Trusted Execution Environment (TEE). In part 2, I elaborated on the Covalent Virtual Machine and in this part, I will talk about Covalent’s ecosystem and data marketplace. However, before I do so let me briefly introduce the Covalent Protocol project.
As far as internet goes, we have done a great job in optimizing the way that data is transferred to the correct location. We have developed useful transport layer (e.g. TCP/IP) and application layer (e.g. HTTP/FTP) protocols; however, when it comes to what happens after the data has reached its destination our current internet is seriously lacking.
In 2017 a total of 22 zettabyte (ZB) of data was created on the internet (1 ZB = 1,000,000,000,000 gigabytes); yet only a fraction of around 1%, is actually being utilized. This data shows that our current internet is an imperfect solution when it comes to data utilization. Two main reasons for this are: data owners are reluctant to trust entities with handling their sensitive data and secondly, data owners are not getting incentivized for sharing their data; hence a value network is lacking.
Covalent is trying to tackle these issues and improve upon the internet infrastructure by creating a decentralized Web 3.0, that: makes smarter use of data, that remembers, knows when to keep a secret, and learns from its users. To accomplish this, Covalent will implement the following three main features: a Trusted Execution Environment (TEE), the Covalent Virtual Machine (CovaVM), and a Data Marketplace.
In part 1 of this technical deep-dive series I explained Covalent’s trusted execution environment in part 2, I discussed the CovaVM and in this article I will elaborate on the COVA ecosystem and the data marketplace.
Within the Covalent ecosystem the COVA token will be the driving force in creating a self-sustaining, decentralized network with minimal intervention from the Covalent Foundation. the COVA token will be used to compensate data owners for each micro usage of their data and to reward the compute and routing nodes for providing their computational power.
New COVA tokens will be generated through mining. The existing tokens will circulate through the ecosystem and will be used for deposits and payments. The purpose of Covalent’s ecosystem is to ensure that the four major actors within the ecosystem will behave properly. These four major actors are:
Miners, who provide the computational power and the environment in which the Covalent Protocol can operate. The miners are rewarded for producing blocks, verifying computations and hosting the hardware enclaves (aka trusted execution environment).
Users, who make deposits and payments in order to purchase the use of data and the ability to run statistical analyses.
Developers, can contribute to the ecosystem by developing new smart policies and dapps within the Covalent network. To encourage involvement, developers will be rewarded for adding technical functionality to the network and for onboarding new users.
New users, will be acquired through various marketing campaigns and rewarded for becoming a part of the community (e.g. airdrops or sign-up bonusses).
To facilitate the selling and buying of data, Covalent will also develop its own data marketplace where data owners and data seekers can come together and create a market through supply and demand. Within Covalent’s data marketplace one can take on any of the following three roles:
Data owner: Data owners can be regarded as the sellers, who list their private data on the marketplace on a pay-per-use basis. Hence, the data owner will be rewarded every time his/her data is being used, whilst still keeping full ownership of the data. Data owners never get to see the trainer’s models.
Model trainers: Model trainers can be regarded as the buyers, who need data to train their statistical models (e.g. through machine learning principles). Model trainers can buy the use of datasets, but never get to own any of the data. Model trainers, will never see the datasets in plain text, but are only allowed to extract the requested parameters to train their statistical models
SGX host miners: The miners are the ones who expedite the transaction and ensures that the privacy and proof of computation requirements are satisfied. The SGX host miners will never see the datasets nor the trainer models.
To illustrate how the COVA ecosystem and data marketplace would work, let’s have a look at the following use case. Let’s assume that you want to help advance obesity research and decide to share your medical records for research purposes. However, you do not want to relinquish ownership of your data and you do not want to run the risk of your privacy being compromised. Currently there is no viable solution to guarantee this. How do you know that the research institution will be handling your data properly and respecting your privacy?
Well, with the Covalent protocol this would be possible. By using smart policies, data owners can specify which part of their data they want to share and under which conditions. For instance, a researcher wants to know the average age of people who have diabetes type 2. You can specify that you only want to share your diabetes type and your age. Within the Covalent network a dataset of all the needed information from other diabetes patients can be constructed. The researcher can than compute the average age on the Covalent network without ever owning the data, or seeing the dataset in plain text. The researcher compensates each participant in the dataset in COVA tokens and a small percentage goes to the SGX miners, for facilitating the transactions and providing the computation power. So in the end, the data owners never lose ownership of their data and are fairly compensated for each use. Also, the researcher is happy as he got to use valuable data for a fair price in order to build his models and advance his research.
I hope this article provided a clear understanding regarding Covalent’s ecosystem and data marketplace. If you have any questions about Covalent you can always send me a message.
Sources for more information on Covalent:
Website: http://covalent.ai/index.html
Whitepaper: https://docsend.com/view/dvvb75n
Telegram: https://t.me/covalentofficial
Twitter: https://twitter.com/covatoken
Blog: https://medium.com/@covatoken
Github: https://github.com/covalent-hq
Full disclosure: This article is not intended as investment advice. It is just my personal opinion about the Covalent project. You should always do your own research #DYOR. I am part of “the article group” which rewards me for writing this article and encourages me to express my own opinions.
Subscribe to my channels Medium, Twitter and Steemit if you enjoy my articles and would like to be informed about blockchain, cryptocurrency projects and news. You can also read my articles on LinkedIn.
CryptoShowdown
