Hi guys, I'm back! And as usual, we're gonna discuss a new cryptocurrency project in this article. The interesting project that I'm gonna review today is Swipe. This is another business that tries to move on into the crypto sphere after a successful business year, including in Indonesia. They already have more than 420k user base (in Indonesia) using their apps, which is pretty good.
Without further ado, I hope you enjoy this article!
The World of Data Monetization
In a nutshell, Swipe is a decentralized, trustless, blockchain-enabled data monetization apps and platform for both users and mobile app developers. Before you can understand why this project is important, then you should know first about what is data monetization and why it is important. Because of that, the first thing that we're gonna talk about is the data monetization market.
First thing first, what is data monetization? There are several definitions of data monetization on the internet, but in its simplest sense, we can say that data monetization is a process of using data to produce benefits or profits. Because of this, collecting data from data sources is also important as the process of utilizing the data itself. Data monetization has become a major part of a business, playing a major role especially in product development and gaining revenue through data selling/trading. Below you'll find the details.
One survey showing the importance of data monetization in business. Source Brunswick
Importance of data monetization/collection
Data is very important across many fields, including in business. With reliable data, there are many things that a business could do. One of the most important things is to produce or develop a product that is suitable for a consumer. Business can also use the data to improve customer experience, improving marketing strategy, generate profits through cash flow and to secure data[1] such as in account verification via voice or face recognition.
Data monetization can be categorized into two types, direct and indirect monetization[2]. Direct monetization is when you use your data directly to gain profits such as by selling your data to other companies, selling your analysis or barter your data with other companies. On the other hand, indirect monetization is when you use your data to gain indirect profit in the long run, such as by fixing your software bug, enhance customer UI, and so on.
Because data is so important, many businesses try to get as many data as possible in order to compete successfully in the market, as failing to recognize even little details from the user can cause a destructive impact for their business activities. Some of them choose to buy data from other companies, while other companies try to collect user data by themselves.
For consumers, the impact looks very little, in terms of direct feedback. Most of the time they'll be 'rewarded' with new products, enhanced user interface and so on. However, it is very little to none direct feedbacks for user contribution.
How companies collect the data
According to Liam Hanham, director of data science at Elicit, there are basically three ways a companies/business collect user data[3]. The first is directly asking the customers, the second is indirectly tracking customers and the last one is adding other sources of customer data into their own. In practice, these three practices could be combined as one strategy.
For example, an app might ask your requirement that they'll collect data at a specific time from your phone, and they'll ask you some basic data about yourself, profile and so on. After that, they'll send anonymous data from your daily activities to a server, and then the data will be compared to other data sources that they got from other companies or sources. With the advance of IoT, these basic strategies become very popular now.
IoT will be the major drive for data collection. Source Atomic Object
A more technical approach of how companies collect data has been described by many sources on the internet. For example, in this article[4], some CEO or leader from many companies shares how business can or should collect their data. You can see that there are a lot of ways, including but not limited to website tracking, social media tracking, demographic information, and so on. To put it in short, almost every activity that you do on your IoT can be used by companies to generate important data for their business. Not only that, even your loyalty cards and gaming activities are no exceptions[5].
The Problems in the Current Data Monetization Activites
The Cambridge & Facebook[6] cases of data selling or customer data abuse might be the best and recent examples about how data monetization poses an incredible thread to user privacy. In responses, GDPR law is now out and every company has to adhere to that standard. However, the problem is yet to be solved completely.
Leaving the customer on the sideline
In the current data monetization process, especially on the data collection process, most of the time (if not always) users don't get any direct feedback or appreciation. There is no monetary incentive or event features that they can enjoy exclusively when they contribute on the process which should be there because they're allowing companies to 'use' them to generate more profits by creating products and so on. Slowly but surely, users might never contribute to the process at all, and choose to not use any apps in which their data can be send unconsciously.
Selling/using customer data without consent
I don't think this should be explained anymore because the case is clear. Read the news about Facebook & Cambridge and you'll understand how companies might be able to use or sell your data without you even knowing in the first place. Even if there is an agreement between you and the apps/sites you visit, there is no guarantee that your data will really be safe. There is no platform where you can see what kind of data that they collect, how many, and so on. In short, the risk is still great as ever.
Nice infographic about the problems in the industry.
Privacy risk
This risk is still related to the previous one. To put it in short, other than there is a risk that your data got sold to other parties without your consent, you'll also face privacy risk. Maybe you don't want others to know which sites that you visit, what text you send to your lover and so on. There is also no guarantee that the business will protect your privacy at all. Even if you choose to send your data as an anonymous user, still, on the long run other person or companies can comprise that by using something such as IP address and so on. You can read more about how data collection should balance between privacy here[7]. But as always, the risk is still here. What more shocking is that almost 92% of sites use analytics function to collect your data[8].
Cost for preparing the platform
All of the previous risk I describe above are related to the users or customers. However, there are other problems in data monetization business that affect new developer or small-medium business (and probably more). One of them is the cost to prepare for their own data collection is big. They have to prepare the storage, computing power, network, human resources, and the others. It is almost impossible for a new business to have a working data monetization platform to support their development.
Because of this, there is a possibility that they use data from other resources. This can lead to a data monopoly if there are only some key players in the field of data resources, which can drastically limit the growth of the business in the data monetization field.
Data validity
Another problem companies face is about the validity of the data that they collected. Sure, you have the platform and necessary resources to collect the data and process it. But, how valid your data is? How many data are fake and bad, how to differentiate it? How to identify which sources should be removed from the next one? And so on. Validity is very important to know because if the data isn't valid, then your product or enhancement could result badly and dislike by the customer.
Customer trust
A company needs customer trust to run their business. It is impossible for users to use your apps and install it on their phone when they don't trust you[9]. The same thing applies for mobile app developers. You have to gain trust from your users, and if you don't have the right platform to monetize their data, then they'll leave you in the long run. This is where the dilemma comes in. On one hand, you need data monetization, while on the other hand, the customer can't trust you enough.
Solutions?
So how to fix all of the problems above? How to make sure mobile app developers can get the data that they need, while at the same time make users got direct feedback and control their own data? How to make it all transparent, cost-effective and efficient?
Swipe is there to answers all of those questions above. By using blockchain and cryptocurrencies, Swipe will protect users and developers at the same time from the problems in the current data monetization business to make sure they get what they deserve.
So how does the platform works? We'll talk about that in detail in the next article (hopefully soon). At the moment, you can continue to read about Swipe here:
Swipe Official Website: https://swipecrypto.com/
Swipe Bitcointalk ANN Thread: https://bitcointalk.org/index.php?topic=2069004.msg20658035#msg20658035
Swipe Bitcointalk Bounty Thread: https://bitcointalk.org/index.php?topic=4583211.0
Resources
[1] https://www.businessnewsdaily.com/10625-businesses-collecting-data.html
[2] https://tdwi.org/articles/2017/09/07/biz-all-data-monetization-new-way-of-thinking.aspx
[3] https://www.businessnewsdaily.com/10625-businesses-collecting-data.html
[4]
https://thenextweb.com/entrepreneur/2015/05/20/9-ways-of-gathering-meaningful-data-about-your-customers/
[5] https://www.villanovau.com/resources/bi/6-ways-companies-can-collect-your-data/
[6]
https://www.cbsnews.com/news/facebook-your-personal-info-for-sale/
[7] https://www.digitalocean.com/community/tutorials/user-data-collection-balancing-business-needs-and-user-privacy
[8] https://clearcode.cc/blog/online-privacy-user-data/
[9] https://channels.theinnovationenterprise.com/articles/what-are-the-risks-of-data-monetization
Disclaimer
This article is not a financial recommendation. The author, Swipe and other parties mentioned in this article is a separate entity. The author writes this article based on his own understanding of Swipe. Readers should read the original document of Swipe by themselves. The author shouldn't be responsible for any actions taken by the readers, including but not limited to: joining the Swipe bounty program, participate in the Swipe token sale, and etc.