Digital Dependency: The Need for a Personal Data Exchange Infrastructure


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The HAT published a new whitepaper on why personal data needs to change on the internet - click here for the full post if you’d like to download it as a .pdf

Here’s an excerpt:

We live in an increasingly digitally connected society, with digital dependency in daily life only set to rise. Yet, where connectivity brings convenience it also brings challenges – especially in the area of personal data.

Every user signing on to new every Internet service creates a unique user account every time, surrendering some form of their personal data in the process. As a result, a few hundred equivalent accounts are created by each of us in our lifetimes, often to then just become out of date or inaccessible.

This is both a nightmare to the individual and a cyber security risk to society. Click here to download the full White Paper on Digital Dependency from the Hub of All Things.

The societal and economic challenges of personal data accounts to Internet services

It is likely that in the long term, the market will emerge a personal data consolidator to address the consumer pain of having multiple online accounts, and the likely candidates for that are the incumbent players, Facebook, Amazon, Google and Apple.

This would represent a centralisation model for personal data accounts, as opposed to the fragmentation model formerly described. Both are suboptimal for various reasons.

Suboptimal to the digital economy

Fragmentation runs the risk of illegal markets for personal data. Regulation enforcement would be difficult since entry costs are low, and the value of non-anonymised data and the cost of anonymising data together create a big incentive for a black market to emerge to fuel the expanding advertising economy on the Internet.

Legitimate services building on more personal data need to invest heavily to build the multiple codesets that allow them access to corporate-owned personal data. This presents a deterrent to new services, and incentivises services to build on the platforms of the incumbents. Fragmentation in this way results in centralisation.

Centralisation means greater monopolistic power is bestowed upon the firm that acts as the personal data custodian.

Undesirable to society

Centralised corporate data ownership would result in the loss of privacy and confidentiality, which could cause withdrawal from the Internet economy among some users, and privacy being a luxury good as only those who can afford it would opt out of paying for service with their data.

The cyber security risk of having so many points of vulnerability in a fragmented Internet would become too costly to manage and police.

In a fragmented market, the digital assets of individuals become dispersed across the internet. As our digital society ages, a lack of consolidation and ownership rights over digital assets will make it difficult to pass on or manage our Internet selves through our families…

Download the full HAT whitepaper from the Hub of All Things