Emerging Data Frameworks

A simple introduction to data unions and co-ops

illustration of blocks and code conjoining into a giant shape

What is a data union?

You know where you went todaywhat you read on your phone what kind of music you like

But you don't have the tools to measure those data points precisely and monetize them like Big Tech companies do.

Your data isn't that valuable (sorry). But if you pool your data with enough people, you have something that's worthwhile. That's the basic idea behind data unions and data cooperatives.

Just like a credit union or a food coop, it's possible for the people generating the value of the data economy to benefit directly and control what happens to their private information. A large community can sell their data directly to advertisers, researchers, and data companies.

Diagram of profit sharing with a data union

Then the profits can be split among members in regular micropayments. Imagine getting paid to browse the web or drive to work. Someone is already making money off that data, so shouldn't you be getting paid?

One challenge to this potential future is that traditional banks make it expensive to pay thousands of people very small amounts. But with blockchain systems, the same network of users that is generating data can also host a distributed ledger that can make micropayments a reality.

Ugh, did you say blockchain??

Traditional banks act as a trusted third party when people are paying each other. Blockchain is a ledger of such transactions that isn't held in a bank, but distributed among many individuals who all maintain an up-to-date record of transactions with cryptocurrencies like Bitcoin, Ethereum, or newer currencies like Basic Attention Tokens or DATA tokens that are attempts to realize the possibilities of data unions.

Isn't cryptocurrency awful for the environment?

Yes — building a new block in the chain of ledger instances requires a ton of computing power, and the longer the chain gets the more computing is necessary to build another block. But there are plans for more energy-efficient systems, and it's worth considering that the four biggest banks — Chase, Wells Fargo, Citi, and Bank of America — have invested $2.6 trillion in fossil fuel since the Paris Agreement.

Could we just make data into free public goods?

That's a Data Commons. Some data should be available to anyone — like Wikipedia, OpenStreet Maps, or certain government information. This is another element of a more moral future for data economics.