Sirwin
Sirwin
ocean protocol

Data DeFi


 Introduction

The rate at which data is increasing nowadays is fascinating. IDC, the global market intelligence firm, estimates that data will increase from 33 to 175 zettabytes in 2025. That is 175 followed by 21 zeroes!

Despite the sheer size of data, it is not utilized much effectively across multiple companies, industries, and economies. One, perhaps the chief, problem is data silos. Data silo is when data collected by one unit or department is not available to the rest of that organization. The same is true at higher levels – the data gathered by companies are typically not accessible to other companies.

But data economy is going to change this. Data economy is the global digital ecosystem where participants – both producers and consumers – collect, organize and share data to get insights. Data in this economy tends to be eclectic, meaning with the wide variety of sources. Search engines, social media platforms, online data vendors, companies using devices connected to Internet-of-Things, you name it.

Participating in data economy offers many benefits. By exchanging its data with other actors companies may develop a new business line. For example, medical device producers have a wealth of information on their users’ health, such as heart rate or insulin level. However, they don’t and cannot have a say on users’ well-being. Instead, they can collaborate with health care organizations by providing them with the patients’ tracking data in an ethical and secure way. All participants of the case will benefit from this data exchange; a medical device manufacturer will have created a new revenue stream.

 

 

Protocols

Streamr

According to the forecasts, nearly 30% of global data will be generated in real time, 95 of which will be obtained due to IoT devices. If this proves to be true, then we can say that Streamr is building the future now. Streamr is a decentralized platform where users can exchange and monetize their real-time data streams, including those generated by IoT devices. At its core lies the Streamr Network which transfers streams of real-time data from producers to consumers.

All the data in the Streamr network come in the form of streams. A stream is any sequence of data points which can be data of any kind and can be generated from any source. Sources include but are not limited to sensors in a smart house, commercial data vendors or database systems. To illustrate what a stream may look like, let’s look at the example below.

Timestamp

Temperature

RPM (rotations per minute)

2019-08-01 11:30:01.012

312.56

3550

2019-08-01 11:30:02.239

312.49

3549

2019-08-01 11:30:04.105

312.42

3543

 

Streams are gathered and packaged into Data Unions. Real-time data from different users can be put into one Data Union with consent. Data Unions are what is available for sale on the Streamr marketplace. This is how users can monetize their real-time data. DATA tokens are distributed to all producers of data streams when a buyer purchases (or “subscribes” in Streamr jargon) a Data Union. Not all Data Unions are created equal. They can differ by their membership models, use cases, revenue structure or by other features.

I believe that Streamr platform in general, and Data Unions in particular, will play a huge role in data economy. It is a permissionless, decentralized, peer-to-peer product that also allows retail data producers to monetize their real-time data.

 

Ocean Protocol

One of the leading players in the field of data DeFi is Ocean Protocol. Data DeFi can be defined as the sector of decentralized finance where data and data services are treated as a new, emerging asset class. Ocean Protocol, which is at front of the space, is a decentralized data sharing protocol which allows the producers of data directly set their products to consumers.

The protocol allows data providers to securely monetize their data without giving full ownership. Data consumers, for example policy makers, or AI or machine learning engineers, will benefit from the protocol by getting access to the private data sets which otherwise would be hard or impossible to obtain.

One of the most important concepts in Ocean Protocol is datatokens. They give access to a particular data set or a data service. All datasets or data services on the protocols have their own datatokens. In order to get access to the data set you should send 1.0 data tokens to the data producer. You can even transfer your access to someone else by sending your 1.0 datatokens to him. It should be noted that you don’t buy the data itself, you only buy access to that data.

Compute-to-Data (CtD) is a clever technological solution which allows businesses or individuals sharing their data while keeping privacy. Let’s say you have the data set that you would like to “rent” but you don’t due to security concerns. A data scientist wants to use your data. CtD is a tool that resolves the problem. Any Data Consumer can run his models on your data while the data will never leave its premises (which can be your hardware, a Google Sheets file or anything else). Think of CtD as a protective layer between a Data Owner and a Data Consumer.

ocean protocol

The way it works is when an algorithm is run on the data, only results, not the data set itself, will be sent to the Data Consumer. This will allow Data Owner to monetize his data preserving privacy. You can sell your data directly to the Consumer or on the marketplace. Data Consumers will get more data to train their models upon. Another advantage for data consumers is that they won’t need computation infrastructure since all computations will run on Data Owners’ hardware.

Not only data but also algorithms are regarded as an asset on Ocean Protocol. A researcher can monetize his algorithm. Like other data assets, algorithms also can be sold themselves or only access to them. An algorithm developer may decide to sell only access to the algorithm which means that algorithm is public. If only the computation service is sold, not the algorithm itself, then it’s private.

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fmiren
fmiren

commodity trader interested in crypto & writing about it


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