There is a very famous, overused, generally misunderstood quote from March 2009 attributed to Meglena Kuneva, European consumer protection commissioner: “Personal data is the new oil of the Internet and the new currency of the digital world.” Facebook was only five years old when Kuneva made this observation. And while Google had been around for over a decade, Twitter was only three. Early days though they might have been, it was clear, at least to Ms. Kuneva, that those who could mine and refine data (and make them actionable) would become exceptionally powerful politically and economically. She was right. But times have changed.
Our Data Are Not Ours
Today, as we think about the ever-increasing volume and velocity of data, we are acutely aware that our data are controlled by a handful of exceptionally powerful entities, such as Apple, Microsoft, Alphabet (Google), Amazon, and Meta Platforms (Facebook), to name a few. These organizations have amassed astronomically large amounts of data about each and every one of us. And our profiles are constantly being enriched with data we willingly (but usually unknowingly) make available by just living our daily lives.
What’s the Problem?
On the surface, there doesn’t seem to be a problem with companies such as Apple, Microsoft, Alphabet (Google), Amazon, and Meta Platforms (Facebook) having access to our data. They are publicly traded corporations that are subject to the rule of law, and for the most part, they use our data to incentivize us to purchase their goods and services. In the case of the advertiser-supported organizations, they say they are simply trying to put the right message in front of the right person in the right place at the right time.
Except… because they are de facto data monopolies, these companies now control who can market to whom. This has become a very big problem. Apple has imposed Apple Tracking Transparency (ATT) on the marketing world, and Google keeps threatening to end third-party cookie access in its Chrome browser. Ask Facebook how they feel about ATT. More importantly, ask a small business owner how effective their Facebook advertising has been since it was implemented.
Big tech’s cavalier attitude toward our data has inspired all kinds of government regulations such as GDPR, CCPA, and the NY Shield Act, and there will certainly be more to come. These rules and regulations have focused the public on data protection and privacy (which is a very good thing), but these very same rules impose even more restrictions on advertisers and marketers.
Satoshi Nakamoto’s Solution
Around the same time that Ms. Kuneva was busy thinking about data and oil metaphors, Satoshi Nakamoto identified and solved a very specific problem:
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What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party. Transactions that are computationally impractical to reverse would protect sellers from fraud, and routine escrow mechanisms could easily be implemented to protect buyers.
The 2008 white paper Bitcoin: A Peer-to-Peer Electronic Cash System introduced us to bitcoin, the world of decentralized finance, and laid the technological foundation for Web3. It also laid the groundwork for the disruption of our centralized data overlords.
SSI (Self-Sovereign Identifiers) vs. FIDO (Fast IDentity Online)
The concept of passwordless, cryptographically protected digital identification has been around for a very long time. Today there are two competing technologies offering differing visions for our potential future digital identities: FIDO2, a specification from the FIDO Alliance, and SSI, a catchall phrase for a group of decentralized identity schemas.
FIDO’s mission is to eliminate the password and make multi-factor authentication (MFA) easy, fast, and ubiquitous. The standard is singularly focused on security. Google brags, “On the employee side, there has not been a successful phishing attack against Google’s 85,000+ employees since requiring use of FIDO security keys.”
But FIDO2 is a centralized system, and while it does a wonderful job with security, it does not offer individuals complete control of their own data.
On the other hand, SSI is a set of open digital identity standards that gives individuals control over the information they use to prove who they are. It can be used to exchange data between issuers, holders, and verifiers without the involvement of any central authority.
You can think of your SSI as a non-transferable, non-fungible token (NFT) or smart contract that allows you to choose what data you wish to reveal and have them verified by anyone you authorize to view them on a public blockchain.
That’s a Lot of Jargon, So Let’s Break It Down
Web3 has the potential to “flip the script” for marketers. Instead of collecting email addresses and hoping to tag users with some form of digital ID, a potential customer could enter your funnel by allowing you to know their identity via their SSI. This would allow you (the marketer) to follow their digital wallet and have access to the data the individual wanted you to have about them. With this subtle shift, it now becomes possible for you to create a system where both you (the marketer) and the user (potential customer) can both share in the value you create.
This takes the concept of building a community around your brand or leveraging your existing community to some exciting new places. You would have the ability (and the opportunity) to store and exchange value, and you also would have a method of account. A Web3 ecosystem will offer new ways to interact with your community and it will stand alone or easily be connected to your existing Web2 tools.
Thinking about Web3’s Future from a Marketer’s Perspective
This journey begins with some great new storytelling tools and ends with the very non-technical assembling of communities of passion, practice, or interest around your brand. You’ll need to learn how to use blockchain, smart contracts, and NFTs to create value and utility for your communities, partners, customers, or target audience. But you’ve already mastered the most difficult part of this process – you understand how to identify and communicate the core principles of your brand. Now, take what you already know and answer the following question: How can I deploy this new group of technologies to create an environment where both users and creators share in the value they create?
Author’s note: This is not a sponsored post. I am the author of this article and it expresses my own opinions. I am not, nor is my company, receiving compensation for it. I am not a financial advisor. Nothing contained herein should be considered financial advice. If you are considering any type of investment you should conduct your own research and, if necessary, seek the advice of a licensed financial advisor.